reports
- Dominic Rose
- Naresh Chouhan
EU Pharma 2025 Outlook - The Correction Was Due, Tread Carefully
In the aftermath of the H224 Healthcare correction, we look forward to 2025 with a more focused stock specific approach We show sector fundamentals have remained robust despite the correction. We see 4 key themes for the Pharma sector in 2025; 1) 2025 is a very strong year for important pipeline readouts, 2) The volume impact of Medicare Part D reform will dominate the narrative in H125 & continue to be a tailwind into 2026, 3) Margin expansion should be robust at a sector level, 4) Biotech M&A...
- Martin Hall
Hardman & Co Insight: Survival of the UK life sciences sector
For two years running, the Hardman & Co Healthcare index has declined, underperforming both the FTSE 100 and the FTSE All-Share indices. This is quite unusual for healthcare stocks. Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises. However, the small- and mid-cap life sciences sector has alway...
ETX E-THERAPEUTICS
AGY ALLERGY THERAPEUTICS PLC
AVO ADVANCED ONCOTHERAPY
YGEN YOURGENE HEALTH
ALNOV NOVACYT SAS
C4XD C4X DISCOVERY HOLDINGS
REDX REDX PHARMA
GDR GENEDRIVE
GSK GLAXOSMITHKLINE PLC
AZN ASTRAZENECA PLC
CTEC CONVATEC GROUP PLC
RENE RENEURON GROUP
0008964D INDIVIOR INC
IMCR IMMUNOCORE HOLDINGS ADS
ONT OXFORD NANOPORE TECHNOLOGIES PLC
SLN SILENCE THERAPEUTICS PLC
TRX TISSUE REGENIX GROUP PLC
GSK: 11 directors
Eleven Directors at GSK bought/gave away 382,360 shares at between 0.000USD and 16.145USD. The significance rating of the trade was 51/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over t...
- Dominic Rose
- Naresh Chouhan
Thematic Research - Quantifying The Impact From Part D Reform
In 2025, Big Pharma will be exposed to further US drug pricing reform as a result of the IRA act. This is the final big change to play out and we calculate there is the potential for a mid-single digit EBIT impact for some companies, but there is material heterogeneity in terms of the magnitude of the impact. There is also the potential for upside for Novo & LLY. However, given the significant complexity in the reimburse-ment changes & in computing the current sales in Medicare Part D, we are re...
- Dominic Rose
- Naresh Chouhan
GSK - Downgrade to HOLD (TP £17.50 [£19], 7pgs)
We downgrade GSK to HOLD given the higher risk following the outcome of yesterday’s Delaware trial & the higher payout that GSK could now face. We now assume GSK pays £4bn ($100k/case) and we add a 5% uncertainty discount. Given it will be c.12mths before an appeal decision & a lack of near-term catalysts, we now see limited reasons to own the stock. The Blenrep uptake & Arexvy sales will not become visible until early Q4 and the Depe’ full P3 data is unlikely to drive ST upgrades. Our forecasts...
- Dominic Rose
- Naresh Chouhan
GSK - It’s Not Sexy But It Is a BUY (TP £19 [£14.50], 14 pgs)
Following new analysis on current growth drivers & upcoming pipeline readouts, we upgrade our 2028 revenues by £2.5bn & believe GSK can deliver 11% CAGR EPS growth 2024-27 leaving us 7% above consensus 2027 EPS. Whilst we believe 2029-31 is an unfillable hole & justifies a low multiple on Pharma, this is more than in the price and near-term momentum will likely drive the shares higher. The Zantac overhang clearing, some pipeline catalysts & the potential for fresh management coupled with near-te...
- Dominic Rose
- Naresh Chouhan
EU Pharma - 2024 Year Ahead (28 pgs)
For EU Pharma, 2024 is likely to be characterised by EPS revisions, a handful of new launches & sluggish EPS growth for a number of names. The relative lack of pipeline catalysts makes forecasting sales and EPS much more important than for 2023. We identify 4 key issues to watch for: 1) Medicaid AMP cap removal, 2) Higher tax costs, 3) Higher debt costs & 4) a handful of very specific company issues that could make a material difference to performance (Novo: Wegovy supply, GSK: litigation, SAN: ...
- Dominic Rose
- Naresh Chouhan
GSK - 30% EBIT Decline 2027-29
Our analysis of the impact of IRA on the 6 EU Pharma names shows GSK is most exposed this decade & we cut to HOLD. Shingrix & Trelegy US price cuts may account for a 7% EBIT hit in 2028. This happens at the same time as the ViiV patent losses leading to ~1/3 of group EBIT being lost 2027-29. We argue that GSK should aggressively cut costs today to boost M&A firepower to try to plug the hole. In the absence of this, we see limited ability to minimise the end of decade earnings losses. We also see...
- Dominic Rose
- Naresh Chouhan
EU Pharma - IRA Impact Analysed (Thematic Research, 16pgs)
The IRA is a complex piece of legislation that will materially cut some US drug prices. With the IRA newsflow set to amp up, our analysis of the impact on EU Pharma shows that the IRA has a negligible effect on value. We calculate that the IRA negotiations will reduce sector sales by 1.5% by 2030, driving a 4% EBIT impact, but just a ~1% NPV impact. The only concern we have is if pricing in the commercial channel is also affected. We show that in this scenario, where price in commercial is the s...
- Dominic Rose
- Naresh Chouhan
Novartis - Readying Itself for GSK Bid? (BUY, TP CHF97 [90], 15 pgs)
We discuss whether Novartis is readying its war chest for a large merger. Novartis has shed ~$100bn of assets since 2014 & by the end of 2023 will be almost net cash. Recent rumours of a respiratory divestment has led us to explore what a GSK acquisition would look like for Novartis. Re-entering Vaccines & entering Virology with world-leading franchises would help diversify away from the crowded and increasingly risky oncology space. The deal could be >40% accretive & all cash with pro forma net...
- Olfa Taamallah
- Yan Derocles
IPN IPSEN SA
RR. ROLLS-ROYCE HOLDINGS PLC
ROG ROCHE HOLDING LTD
MTX MTU AERO ENGINES AG
HO THALES SA
NOVN NOVARTIS AG
KORI KORIAN SA
FGA FIGEAC AERO SA
BLC BASTIDE LE CONFORT MEDICAL SA
A14V70 FLOW TRADERS NV
FAGR FAGRON SA
VIRP VIRBAC SA
VETO VETOQUINOL SA
OLG OLYMPIQUE LYONNAIS GROUPE
LNA LNA SANTE SA
GBT GUERBET SA
NOVO B NOVO NORDISK A/S CLASS B
SAN SANOFI
SAF SAFRAN S.A.
AIR AIRBUS SE
ORP ORPEA SA
LAT LATECOERE SA
BA. BAE SYSTEMS PLC
BBED BETER BED HOLDING N.V.
LDO LEONARDO SPA
GSK GLAXOSMITHKLINE PLC
AZN ASTRAZENECA PLC
ECONT ECONOCOM GROUP SE CLASS D
BIM BIOMERIEUX SA
HAG HENSOLDT AG
FAST FASTNED
AERO MONTANA AEROSPACE AG
FUR FUGRO NV
SYAB SYNLAB AG
AM DASSAULT AVIATION
EAPI EUROAPI
- Dominic Rose
- Naresh Chouhan
EU Pharma - IRA Could be EBIT Tailwind in 2023 (7 pgs)
Given the forecasted 10% CPI-U US inflation this year, we show that the new Inflation Reduction Act could provide a low-single digit EBIT tailwind in 2023 for EU Pharma as the industry is able to take higher price rises than we have seen in recent years. This comes at a time when wage inflation could add some modest pressure to Pharma cost bases [here] in 2023, so is a welcome partial offset. Our analysis shows that Roche could have the greatest tailwind whilst GSK the least. For access to the f...
- Team Pharma
ODDO : A beneficial forex trend for Sanofi, GSK and Novo Nordisk
>Q3 marked by profit taking and the Zantac scandal - The pharma sector was impacted in Q3 by profit taking following the excellent H1 performance (+8% vs STOXX600 -17%), as well as by the Zantac scandal (Sanofi and GSK) and to a lesser extent the Nexium affair (AstraZeneca) which put the legal risks intrinsic to the sector back in the spotlight. The performance for STOXX600 Healthcare stands at -7.6% over the quarter vs -4.8% for the STOXX600. The median performance i...
- Team Pharma
ODDO : Une évolution des changes bénéfique pour Sanofi, GSK et Novo No...
>T3 marqué par une prise de profits et le scandale Zantac - Le secteur Pharma a été impacté au T3 par une prise de profits suite à l’excellente performance du S1 (+8% vs STOXX600 -17%) et également par le scandale Zantac (Sanofi et GSK) et dans une moindre mesure l’affaire Nexium (AstraZeneca) qui ont remis sur le devant de la scène les risques intrinsèques au secteur liés aux litiges. La performance du STOXX600 Healthcare ressort à -7.6% sur le trimestre vs -4.8% po...
- Team Pharma
ODDO : Pharma set to remain a defensive sector with an attractive grow...
Since the beginning of the year, the sector has played its defensive role in an uncertain geopolitical and macroeconomic context (Stoxx 600 Healthcare -14.4% vs -18.0% for Stoxx 600). We think that the recent profit taking which lowered 2023e P/E from 14.4x to 13.3x between 1 July and 23 September represents an opportunity. Moreover, in the run-up to 2023, set to be rich in clinical data, we prefer stocks that have not seen their short-term growth compromised, like AstraZeneca (T...
- Team Pharma
ODDO : La Pharma restera un secteur défensif avec un profil de croissa...
Depuis le début de l’année, le secteur a joué son rôle défensif dans un contexte géopolitique et macroéconomique incertain (Stoxx 600 Healthcare -14,4% vs -18,0% pour le Stoxx 600). Nous considérons que les prises de profits récentes qui ont conduit le PE 23 à baisser de 14,4x à 13,3x entre le 1er juillet et le 23 septembre représentent une opportunité. Aussi en amont d’une année 2023 chargée en clinique, sont à privilégier les valeurs dont la croissance CT n’est pas mise à mal, ...
- Team Pharma
ODDO : Pharma set to remain a defensive sector with an attractive grow...
Since the beginning of the year, the sector has played its defensive role in an uncertain geopolitical and macroeconomic context (Stoxx 600 Healthcare -14.4% vs -18.0% for Stoxx 600). We think that the recent profit taking which lowered 2023e P/E from 14.4x to 13.3x between 1 July and 23 September represents an opportunity. Moreover, in the run-up to 2023, set to be rich in clinical data, we prefer stocks that have not seen their short-term growth compromised, like AstraZeneca (T...
- Team Pharma
ODDO : La Pharma restera un secteur défensif avec un profil de croissa...
Depuis le début de l’année, le secteur a joué son rôle défensif dans un contexte géopolitique et macroéconomique incertain (Stoxx 600 Healthcare -14,4% vs -18,0% pour le Stoxx 600). Nous considérons que les prises de profits récentes qui ont conduit le PE 23 à baisser de 14,4x à 13,3x entre le 1er juillet et le 23 septembre représentent une opportunité. Aussi en amont d’une année 2023 chargée en clinique, sont à privilégier les valeurs dont la croissance CT n’est pas mise à mal, ...
- Dominic Rose
- Naresh Chouhan
EU Pharma - Best Placed for 2023 (21 pgs)
EU Pharma has one of the best outlooks into 2023 based on our detailed analysis of cost structures, leading us to believe that there is a greater potential for upgrades than downgrades. Our breakdown of cost base by company allows us to assess inflationary pressures into 2023. We estimate there is a 2-5% incremental hit to our existing 2023 EBIT forecasts when accounting for higher-than-trend wage inflation and energy costs. However, we show the industry has more pricing power than most assume &...
- Dominic Rose
- Naresh Chouhan
Sanofi - Zantac Settlement Deep-Dive (BUY, TP EUR132 [135], 14 pgs)
To assess the risk for Sanofi (and GSK) we analyse various elements of the potential settlements that the industry may make on Zantac and show a timeline of events and ownership. There are considerable barriers that have been implemented for plaintiffs, including tumour type (we estimate only 12% of cancer diagnoses are included), proof of Zantac use for 12 months, statute of limitations and severity of injury, amongst others. We show the scientific evidence is unclear as to whether Zantac cause...
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