Analysts with SunTrust Robinson Humphrey recently published a research report that looked at a number of large-cap pharma companies.
Analysts with SunTrust Robinson Humphrey recently published a research report that looked at a number of large-cap pharmaceutical companies. As noted, they’re a little pricey, but they “offer a defensive posture, dividends and solid growth potential.” Let’s have a look.
This Chicago-based company was just cited as one of the most popular biopharma stocks for billionaire hedge fund managers. Its best-known and best-selling drug is Humira for rheumatoid arthritis, Crohn’s disease, plaque psoriasis and ulcerative colitis. Its 2016 sales were $16.1 billion, which make up 63 percent of AbbVie’s revenues.
Although there are concerns about Humira’s biosimilar competition, the company made an interesting deal with Amgen protecting it from their biosimilar, Amjevita, until 2023 in the U.S. There may be other competition, however, especially in Europe.
SunTrust wrote, “AbbVie launched Mavyret, the new pan-genotypic Hepatitis C (HCV) regimen, in the U.S. in early August. Mavyret is priced competitively with Zepatier and Harvoni on a net basis, with parity access in important commercial insurance plans like Express Scripts. Thanks to early competitive access in some commercial plans as well as government channels, Mavyret has already captured more than 5 percent share of the market by volume among the top HCV assets.”
2. Eli Lilly
The Indianapolis-based company recently inked a collaboration deal with Tubingen, Germany-based CureVac AG in a deal that could total $1.8 billion. It will focus on developing and commercializing up to five possible cancer vaccines using CureVac’s proprietary RNActive technology.
That’s just the tip of the iceberg for Lilly, which has a strong portfolio that includes Zyprexa for schizophrenia and bipolar disorders, Gemzar for pancreatic cancer, and Erbitux for cancer.
SunTrust wrote, “We maintained 2017 estimated total revenue and earnings per share unchanged; we expect gross margins in the second half of 2017 to be significantly weaker than the first half as Lilly contends with loss of exclusivity on Strattera and Effient and a gross margin headwind from currently (tailwind to revenue) from a weaker dollar.”
3. Merck
Headquartered in Kenilworth, NJ, Merck, 24/7 Wall Street notes, “remains a leading health care stock for conservative investors. Merck & Co. Inc. offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.”
SunTrust gave the company a $73 price target, with a consensus target of $69.60. Shares closed Wednesday at $63.51.
4. Shire
Based in Ireland, Shire acquired Baxalta in mid-2016 for $32 billion. 24/7 Wall Street writes, “Many analysts were perplexed by the somewhat mixed market reaction to the Baxalta bid. Baxalta was spun off from Baxter last year. The Baxalta acquisition could produce $13 billion in revenues for Shire’s rare disease portfolio by 2020, according to Bloomberg Intelligence analysis. Sales at the combined entity are projected to reach $20 billion.”
SunTrust was more interested in several ongoing patent lawsuits. SunTrust set a price target for $260, with a consensus of $226.08. Shares closed Wednesday at $146.29.
SunTrust also looked at various catalysts including “the ongoing Xiidra (dry eye) ramp targeting 18 million diagnosed patients in the United States. In addition to the global launches of Natpara, Gattex, Firazyr, Cinryze, Kalbitor and Xiidra through the larger footprint of operating affiliates, another big catalyst is Onivyde and Natpar approval in European Union for pancreatic cancer and hypoparathyroidism, respectively.”
