J.P. 摩根-美股-生物科技行业-2020年美国生物科技展望：以2020年的愿景迎接新的一年-2019.12-102页.pdf

1North America Equity ResearchDecember 2019J.P.Morgan US Biotechnology Research2020 US Biotech Outlook:Roaring into the New Year with 2020 VisionConference Call DetailsWe are hosting a conference call on Wednesday,December 18 11:00am ET/16:00 UKPlease contact us or your JPM salesperson for detailsAnupam Rama AC212-622-US Large Cap BiotechnologyCory Kasimov AC212-622-US SMID Biotechnology Jessica Fye AC212-622-4165JEric Joseph AC212-622-Yuko Oku212-622-Tessa T Romero212-622-Gavin Scott212-622-Matthew Holt,Ph.D.212-622-Daniel Wolle212-622-Matthew Bannon212-622-Turner Kufe,M.D.212-622-See the end pages of this presentation for analyst certification and important disclosures,including non-US analyst disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.J.P.Morgan Securities LLC22020 US Biotech Outlook:Key TakeawaysSource:J.P.Morgan ResearchSolid Fundamentals,Stabilizing Sentiment Favor Rotation to Biotech.the Question is When and How MuchValuation gap for large caps vs other HC subsectors/broader market may finally be too big to ignore.While there were early signs of rotation late in 2019,the group remains significantly under-ownedLarge cap valuations continue to trade at a steep discount to pharma(11x 2020 EPS for the remaining big 3 biotech vs.14x for major pharma),healthcare overall(21x),and the broader market(18x for the S&P500)Commercial/near commercial/platform/larger cap SMIDs could also benefit from sector rotation.and fundamentals remain strong.The innovation engine is still running at a very high levelClinical data/innovation continues to be the#1 ranked sector tailwind for 2020 in our buyside survey(tied with increasing M&A)The FDA remains constructive,with 40+new drugs or biologics approved YTD(vs.59/46/22 in 2018/2017/2016)A number of high-profile/innovative biotech IPOs captured investors attention in 2019(e.g.,Stoke,Springworks,BioNTech,etc.)Importantly,many of the new offerings of last 12-24 months have created substantive value,underscoring the impact of innovation.which,coupled with easing headwinds,has encouraged movement from the sidelinesHealthcare policy discussion remains at the forefront,but political/pricing headline(and fundamental)fears appear to be recedingAs the challenge of implementing anything close to“Medicare for All”becomes better appreciated,along with the overall lack of alignment on specific reform policies,we believe the valuation disconnect vs the broader market could lessenWith the expectation of divided government in 2021(e.g.,if a Dem wins the White House,we would still expect a Republican majority Senate),we see“gridlock”as ongoing impediment to large scale legislation,despite general bipartisan rhetoric in support of healthcare reformAlthough 52%of buyside survey respondents expected drug pricing to be a similar or bigger overhang in 2020 vs.2019,this is significantly down form the 82%of respondents in our 2019 survey(for 2019 vs.2018)What,if anything,can carry 4Q19s sentiment momentum into 2020?One perpetual swing factor remains M&A.Uptick in M&A activity helped to lift biotech sentiment exiting 2019,after what had largely been an underperforming year vs.the broader marketWhile our buyside survey suggests heightened M&A is still anticipated,a year of increased deal activity could act as a rising tide across the group.and demonstrating meaningful medical advances with clinical data“wins”will always factor into enthusiasm for biotechThis is particularly important for broader investor engagement in SMIDs32020 US Biotech Outlook:Top Picks Summary Cory Kasimov Vertex(VRTX)As weve been signaling going back to last summer,we think VRTX is very well positioned for 2020(even with the run into year end).This is the cleanest story in biotech,and the next 12 months potentially offers something for everyone.On the one hand,the earlier than expected approval of the triple regimen could trigger a substantial growth spurt that attracts a broader investor audience.Further,important non-CF pipeline updates(AAT in particular)have the potential to keep specialists engaged and,if positive,lead to another re-rating of shares.BioMarin(BMRN)After being range bound for several years,BMRN could finally be poised to break out in 2020.On the heels of recent positive Phase 3 data for vosoritide in achondroplasia,shares could benefit in 2020 from budding anticipation for the approval of two new potential blockbuster products(valrox and vosoritide),improving financial performance(growing sales with stabilizing expenses),more valrox data(though admittedly some might debate whether this is a good or bad thing),and increased strategic value.Anupam Rama MyoKardia(MYOK)The key catalyst to monitor in 2020 for MyoKardiawill be the phase 3 EXPLORER-HCM readout of mavacamtenin obstructive hypertrophic cardiomyopathy(oHCM).These data are expected in 2Q20 and have the potential to be transformational for the company.We continue believe EXPLORER has a high probability of success based on prior phase 2/long-term extension PIONEER data and trial design.We believe mavacamtenhas blockbuster potential in oHCM alone.Apellis(APLS)As an early 2020 catalyst,results from the phase 3 PEGASUS study of APL-2 in paroxysmal nocturnal hemoglobinuria(PNH)could topline the week before the 2020 J.P.Morgan Healthcare Conference.In our view,PEGASUS has a high probability of showing a clinically meaningful increases in hemoglobin relative to Solirisin baseline anemic patients(a potential$400-500 peak opportunity).Importantly,PEGASUS success could expand interest in the broader set addressable indications,including cold agglutinin disease(CAD),complement 3 glomerulopathy(C3G),and geographic atrophy(GA).Source:J.P.Morgan Research42020 US Biotech Outlook:Top Picks Summary,Continued Jessica Fye Ascendis(ASND)Looking to 2020,we see a string of potential catalysts,each of which we expect to be de-risking for the pipeline and have positive impact on the stock.Building on the recent positive phase III vosoritidedata supporting proof of concept for TransConCNP we will watching for 1)PTH phase II data in 1Q,2)phase III details for somatrogonwhich should reinforce the differentiation of TransConGH,3)the 6-month PTH phase II data(potential topline in 3Q),and 4)initial data for TransConCNP perhaps late in 2020/2021.Taken together,we see a compelling case for continued steady value creation from a now de-risked platform and believe the Ascendis story is still in the early innings with multiple untapped levers in the model.Bigger picture,we believe the heiGHt results support Ascendissability to meaningfully improve upon the profile of parent molecules and see positive read-across not only to the other orphan endocrine products(PTH and CNP)but also to the emerging oncology pipeline for which we expect the first IND next year.Eric Joseph Karyopharm(KPTI)Core focus remains on top-line data from the phase 3 BOSTON study(selinexor plus Velcade/dex)anticipated early 2020(a$1.2B+blockbuster sales opportunity for selinexor).We maintain high level confidence in BOSTONs probability of success based on i)SVd PFS performance in phase 1b STOMP study(17.8mos),ii)consistent historical performance of the control Vd regimen(7 to 9.5 mos),and iii)FDA commentary in conjunction with the accelerated approval of Xpovio(selinexor)in July.In addition,on the heels of impressive early launch metrics(putting to rest real-world tolerability concerns,in our view),we see upside potential to an already healthy mid-term growth outlook for Xpovio(FY20/21 JPMe:$71M/$143M),given the label expansion opportunity in r/r DLBCL(sNDAsubmission in 4Q19).While we view myeloma and B-cell malignancy as the primary value drivers for Xpovio(peak combined US forecasts of$1.5B),we note that additional phase 3 readouts in solid tumor settings beginning in 2020 have the potential to expand commercial breadth longer-term.Finally,with commercial-stage small molecule oncology maintaining a dominant core within biotech M&A,we anticipate a rising strategic premium to KPTI shares provided BOSTON success.Source:J.P.Morgan Research5Top Themes That Could Drive Biotech Sentiment in 2020Source:J.P.Morgan ResearchAcross the group we see the following as the key sector-driving events in 2020 US Presidential electionRegulatory path&outcome for BIIBs aducanumab in Alzheimers diseaseWhat GILD does with its balance sheet and any other M&A that may materialize in the spacePerformance of high profile new product launches(Trikafta,Zolgensma,Reblozyl,Onpattro/Tegsedi/Vyndaqel,etc.)Sareptas phase 2 microdystrophin dataAdditional cell and gene therapy datasets and regulatory approvals(valrox,BCMA,Allo CAR-T,etc.)KRAS clinical updates(AMGN,MRTX)Outcomes on material IP ligation(e.g.,Tecfidera IPR,Soliris IPR,Biktarvy,etc.)and as always in Biotech,its often advisable to expect the unexpected6A Quick Look Back at 2019:Views from Multiple J.P.Morgan TeamsPerformance RecapMultiples AnalysisFund FlowsSnapshot of Binary Events7A Quick Look Back at 2019There were quite a few positive developments for biotech in 2019Innovation productivity continued with approvals of a number of highly anticipated drugs and new drug classes(e.g.,Givlaari,Trikafta,Zolgensma,Vyondys 53,etc.)Many approvals further demonstrated efforts on the part of the FDA to work with sponsors on innovative therapiesIn the SMID cap space,there were a number of clinical data wins further underscoring innovation(Acadia,Ascendis,Constellation,ChemoCentryx,Deciphera,Myovant,etc.)highlighting the fact that investors were paid to take risk around key events M&A materialized,both at the large and SMid cap level,including a 4Q deal streakCapital markets activity remained high,supporting continued funding of emerging biotechs through IPOs and secondary offeringsAlthough there still is much to be desired for the large caps,sentiment improved somewhat as the year went onValuations remain compelling and the large caps still trade at a relatively steep discount to the market(11x 2020 EPS for big 3 biotech vs.18x for the S&P)but concerns around potential healthcare reform weighed on the sector and kept generalists at bay for the majority of the yearWhile much of the year,especially in 1H,felt weighed down by the threat of healthcare reform and negative headlines from the upcoming Democratic primary season in 2020,once more details became clear,these concerns started to lift,particularly in 4QThe spring risk off trade did not help eitherwhich combined with other headwinds contributed to more apathetic sentimentLarge caps in general still left something to be desired;large cap leadership is necessary to maintain generalist engagement with the groupGeneralist interest in SMIDs was not surprisingly limited,although 4Q M&A started to trigger increased attentionSource:J.P.Morgan ResearchThough biotech ended nearly in-line with the broader markets,2019 was a turbulent year with large shifts in sentiment driving performance8A Quick Look Back at 2019Source:J.P.Morgan Research;Bloomberg.Data as of 12/10/2019.Late-year rally just about brings a beleaguered Biotech group back in-line with the broader market(YTD 2019)2019 YTD Performance:NBI+24.0%vs.S&P 500+25.0%Legacy Large CapsEmerging Large Caps24.0%-6.7%-1.6%14.2%32.9%50.5%101.2%NBIBMRNREGNALXNVRTXINCYSGEN24.0%20.1%-1.2%7.2%NBIAMGNBIIBGILD9A Quick Look Back at 2019Though the last 4 years have been underwhelming,biotech has significantly outperformed the broader market in aggregate since 2013 2013-2019 YTD Performance:NBI+164%vs.S&P 500+120%Biotech has only significantly underperformed the broader markets once(2016)over the past 7 years Source:J.P.Morgan Research;Bloomberg.Data as of 12/11/2019.Year NBI S&P 500 (%)201365.6%29.6%36.0%201434.1%11.4%22.7%201511.4%-0.7%12.1%2016-21.7%9.5%-31.2%201721.1%19.4%1.6%2018-9.3%-6.2%-3.1%201924.0%25.0%-0.9%0%20%40%60%80%100%120%140%160%180%200%ChangeNBIS&P 50010A Quick Look Back at 2019Healthcare significantly underperformed the broader markets in the first 3 quarters of the year;while some relief was seen in 4Q19,healthcare still lags the S&P for the yearThis was largely driven by the anticipation of healthcare reform(2019 being the year before the US presidential election)but was eased somewhat by the growing appreciation of a lack of consensus in policy proposals as well as clear legislative challengesHealthcare was among the poorest performers relative to the S&P in 2019,in anticipation of increased political/pricing headlinesSource:J.P.Morgan Research;Bloomberg.Data as of 12/10/2019.-15%-10%-5%0%5%10%15%20%Cons DiscretIndustrialsMaterialsEnergyTelecomServCons StaplesInfo TechFinancialsUtlitiesHealth careTotal Return(%)Relative to the S&P 5001Q182Q183Q184Q181Q192Q193Q194Q19YTDreturns vs S&P(%)-3%1%-7%-22%4%-3%16%1%-7%-10%11A Quick Look Back at 2019EPS growth for large cap biotech was healthy in 2019,driven mostly by share repoEarnings leverage continued to be key for biotech in 2019,which drove acceleration on the bottom line;this was boosted by aggressive share repurchases.However,large cap biotech(AMGN,BIIB&GILD)revenue growth was mostly flatInvestors were clearly uninspired by bottom-line performance in the absence of top-line growth,as biotech multiples were more or less flat vs.2018,still remaining at a discount to pharma,managed care,&med-techLarge cap Biotech performance was underwhelming relative to other sub-sectors,only outpacing Pharma Source:J.P.Morgan Research;Bloomberg.Data as of 12/10/2019.*Note that biotech companies include AMGN,BIIB,GILD(excludes CELG)12A Quick Look Back at 2019Source:J.P.Morgan Research;Bloomberg.Data as of 12/10/2019;Large Cap Biotech:AMGN,BIIB,GILD.Large Cap Pharma:BMY,MRK,PFE,LLY,ABBV Biotech P/E multiples have continued on a downward trend over the past 5 years,trading at a sizeable discount to Pharma and the S&PLegacy Large Caps vs.Major Pharma vs.S&P 500(last 5 years)Legacy Large Caps vs.Biotech Peers(last 5 years)13A Quick Look Back at 2019Source:J.P.Morgan Research;Bloomberg.Data as of 12/10/2019;Large Cap Biotech:AMGN,BIIB,GILD.Large Cap Pharma:BMY,MRK,PFE,LLY,ABBV Depressed multiples potentially indicate a growing disconnect between fundamentals&priceLegacy Large Cap BiotechMajor PharmaOwing to lower growth expectations than major pharma,BIIB and GILD P/E multiples are trading at a considerable discount to US major pharmaCompanyCurrent P/EPrem./Disc.vs.bio peersPrem./Disc.vs.pharma peers5-year EPS CAGRPEG RatioCompanyCurrent P/EPrem./Disc.vs.pharma peers5-year EPS CAGRPEG RatioAMGN14.8x32%10%6%2.3xABBV8.8x-35%6%1.5xBIIB9.2x-18%-32%-1%-16.5xBMY10.7x-21%13%0.8xGILD9.7x-14%-28%3%3.1xLLY18.3x35%10%1.9xMean11.2x3%-3.7xMRK15.9x18%8%2.0 xMedian9.7x3%2.3xPFE13.8x2%6%2.2xMean13.5x9%1.7xMe