J.P. 摩根-美股-制药行业-美国制药业展望：继续看好大型股-2019.9-106页.pdf

1See 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.North America Equity ResearchSeptember 2019PharmaceuticalsChris Schott,CFA AC(1-212)622-J.P.Morgan Securities LLCUS Pharma OutlookStaying Bullish on the Large Caps Christopher Neyor(1-212)622-J.P.Morgan Securities LLCEkaterina Knyazkova(1-212)622-9576EJ.P.Morgan Securities LLCXiling Chen(1-212)622-0364XJ.P.Morgan Securities LLC2Overall PositioningMajor PharmaWe see an ongoing new product cycle,including both recent and upcoming approvals,translating intoan upward bias to our near-and long-term estimatesPricing concerns remain a key focus point of discussion on the group but we see commercial pricingdynamics already well reflected in our/Street estimates and government reform remaining manageableAdmittedly,the 2020 Presidential Election season rhetoric remains a wild cardOur recommendations are skewed towards names with the greatest potential for EPS upside(LLY,MRK)or those trading at a steep discount to peers(BMY)Favorite ideas:LLY,BMY,MRKSpec PharmaWe are marginally less bearish on the group relative to 2018 with earnings having likely bottomed formost names.However,with leverage still elevated,relatively few growth drivers,and recently re-surfaced opioid and price fixing suits,we still do not see a compelling reason to broadly own thegroup.Favorite ideas:CHRS,MYL.Least favorite names:TEVA,ENDP,MNK,AMRXAnimal HealthMost attractive fundamentals(and highest valuations)in our coverage,but we continue to see thepotential for top-and bottom-line beats for both ZTS and ELAN.Particularly interesting names on anybroader market pullback.Favorite ideas:ZTS,ELAN3Major Pharmaceuticals:Staying Bullish on the Sectors New Product Cycle4US Major Pharma:PositioningWe are constructive on US Major Pharma with solid core product and new launch trendssupporting healthy volume-driven topline growthOngoing product cycle,including both recent and upcoming approvals,represent potentialupside drivers to our near-and long-term estimatesPricing concerns remain a key topic of conversation but we see commercial pricing dynamicswell reflected in JPM/Street estimates while near-term government reforms appearmanageableMajor Pharma continues to trade at as relatively steep discount to the S&P but we see healthyfundamentals supporting solid growth and sector outlook(4%sales/7%EPS 5yr CAGR)We remain biased towards companies early in new product launch cycles,which we see asoffering both attractive top-line and margin expansion opportunitiesLLY(OW):Highly diversified,top-tier growth for core products/pipeline(Trulicity,Taltz,Jardiance,etc.)BMY(OW):Inexpensive valuation with solid core product growth and long-term pipeline optionalityMRK(OW):Strong Keytruda ramp after KN-189 approval and ongoing capital deployment key for 2019JNJ(N):Pharma business well-positioned,but litigation challenges keep us on sidelinesPFE(N):Upjohn spin creates cleaner core biz but valuation still not attractive5Pharma Continue To Trade At A Discount To The S&P 500Source:Bloomberg.Major Pharma index includes ABBV,AGN,BMY,LLY,MRK,PFE.Priced as of 09/06/2019.5x10 x15x20 xSep-05Feb-06Jul-06Dec-06May-07Oct-07Mar-08Aug-08Jan-09Jun-09Nov-09Apr-10Sep-10Feb-11Jul-11Dec-11May-12Oct-12Mar-13Aug-13Jan-14Jun-14Nov-14Apr-15Sep-15Feb-16Jul-16Dec-16May-17Oct-17Mar-18Aug-18Jan-19Jun-19Major PharmaS&Pmarket correction in Feb 2018Clintons tweet on high drug pricesTrump tweet on drug pricesThe last time the group traded at a similar discount to the market was ahead of a major patent cycle in 2009-2011valuation gap re-appeared followingrecent sell-off due to policy reform headlines 6Major Pharma 2018-2019 YTD in ReviewSource:Bloomberg,Company reports,J.P.Morgan.Priced as of 09/06/2019-20%-15%-10%-5%0%5%10%15%20%25%30%1/11/151/292/122/263/123/264/94/235/75/216/46/187/27/167/308/138/279/109/2410/810/2211/511/1912/312/1712/311/141/282/112/253/113/254/84/225/65/206/36/177/17/157/298/128/26S&P 500Major PharmaMRK/BMYAACR NSCLC Data for KN-189 and CM-2274Q17 Earnings and 2018 GuidanceEarly Febrary Market Selloff1Q18 EarningsJuly through September Major Pharma RallyTrumps American Patients First(APF)Drug Plan MRK/BMY ESMO 2018 I/O DataPFE Tafamidis DataYear end 2018 Market Sell-off1H19 Market RallyMedicare for all fearsBMY/CELG Deal AnnouncementRebate Safe Harbour Rule removalUpjohn/MYL deal announcementMarket Sell off amid renewed trade war fearMarket rally on hope of trade deal and rate cut7Key Themes for 2019/20201.Strong new product cycle should translate into further upside to estimates2.Pricing remains a key controversy,but we see more bark than bite3.PD-1 represents the industrys most significant(and controversial)growth driver we think owning MRK and BMY makes sense4.We see a number of meaningful new launches and a still robust pipeline for the sector5.Mid-2020s patent cycle coming into focus for several names8Theme 1:Strong New Product Cycle Should Translate into Further Upside to Estimates9We see pharma positioned for 3-4%top-line growth and high-single-digit EPS growth over thenext 5+yearsWe anticipate little to no net price increases for the group over timeNew product launches are capable of supporting healthy longer-term growth and more thanoffsetting lingering patent expirations,in our viewIn addition,we see upside potential to our out-year estimates based on further pipeline traction,aswe view our estimates as generally conservative for these assetsNew Product Cycle Driving Growth in 2019+US Major Pharma EPS Growth 2013-2024ESource for both figures:Company reports,J.P.Morgan estimates.US Major Pharma EPS and Sales CAGR16%15%11%7%6%9%7%3%5%4%4%4%0%2%4%6%8%10%12%14%16%18%20%LLYBMYMRKPFEJNJWgtd Avg19-24 EPS19-24 Sales2%3%6%11%11%19%5%12%11%10%6%6%0%2%4%6%8%10%12%14%16%18%20%20132014201520162017 2018E2019E2020E2021E2022E2023E2024E10Clear Visibility of Growth Beyond 2019 LOEs2019 represents the last year of major LOE headwinds for the Major Pharma group untilthe mid-2020s4.5%generic headwind in 2019 likely limits top-line growth to 2%Beyond 2019,we see at least 5-7 years of visibility on mid-single-digit top-line salesgrowth,which should translate into high-single-digit EPS growthUS Major Pharma Average LOE 2019E-2026EUS Major Pharma LOE Erosion 2018E-2026E(%of sales)Source for both figures:Company reports,J.P.Morgan estimates.2.5%4.6%2.8%1.5%2.3%3.3%3.8%3.5%4.1%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E2.1%2.5%3.1%3.2%4.9%3.6%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%JNJMRKPFELLYBMYIndustryAvg11The Majority of Recent Launches Have Performed Well Source:Bloomberg,J.P.Morgan estimates.In general,recent launches have ramped well,with 2019/2020 consensus estimates steadily movinghigher for major products and we see this trend continuing in 201912/31/201712/31/20186/30/2019change12/31/201712/31/20186/30/2019changeLLYTrulicity3,0923,9524,0779853,4554,5144,7141,259Taltz1,3881,3561,453651,7611,7801,890129Basaglar9601,060987271,1281,2111,14820Jardiance1,088920938(150)1,3411,1621,210(131)BMYEliquis6,6507,8417,7391,0897,3108,9018,8991,589Opdivo6,5987,0737,2206227,9758,1487,461(514)Yervoy1,5541,4751,619651,7731,6801,731(42)MRKKeytruda7,10310,43210,7523,6498,24112,95413,3155,074Gardasil2,4343,4353,6471,2132,4983,7313,9681,470PFEIbrance5,4444,8384,754(690)6,1655,4345,278(887)Xeljanz1,8912,1852,2293382,1072,4972,604497Tafamidis0401291290213256256JNJStelara5,3575,8896,2949375,9495,7087,1321,183Darzalex2,8352,6372,685(150)3,6413,3793,451(190)Tremfya1,090899891(199)1,6501,5641,199(451)2019 Consensus2020 Consensus12Estimates Revisions Have Stabilized In 2019 After Significant Upward Revisions In 2018Sales Estimate Revisions in 2017-2019EPS Estimates Revisions in 2017-2019Source:Bloomberg,J.P.Morgan estimates.In 2018,we saw upward revisions to forward sales and,to a greater extent,earningsThis follows 2017,when we saw no major shifts in near-or longer-term estimatesWe expect this upward revision trend to continue on the back of healthy core productperformances,strong new launch trends,and robust R&D pipelines0.4%0.3%0.6%(0.5%)2.3%1.5%1.5%3.5%(2.0%)(1.0%)0.0%1.0%2.0%3.0%4.0%2018E2019E2020E2021E201720182019 YTD(0.2%)(0.2%)0.2%(1.9%)9.8%7.6%6.8%9.0%(4.0%)(2.0%)0.0%2.0%4.0%6.0%8.0%10.0%12.0%2018E2019E2020E2021E201720182019 YTD13Theme 2:Pricing Remains A Key Controversy,But We See More Bark Than Bite14How Are We Thinking About Pricing?While pricing represented a key controversy over the past several years.The price of drugs in the US has long been a controversial topic,and investor concerns intensified starting in 2015/2016 due to drug price controversies,increased public scrutiny,and increased government focus on price reform.This overhang lifted to some degree in 2018 with greater clarity on the Trump Blueprint and the industry self policing on price increases but has returned in 2019 as a range of policy measures have been considered.we continue to see limited potential for meaningful drug price reform.We have seen very little that suggests significant price reform is likely in the near term with a split Congress and limited ability for the administration to implement significant reform Biopharma is self-policing on drug prices increases,helping reduce headline risks.We see the industry self-policing on price given continued headline risk and as a result are modeling limited pricing growth in the near-to-intermediate term.We do not see a major shift in commercial pricing in 2019/2020.There were few major formulary changes in 2018 relative to 2017,and we expect a similar dynamic in 2019/2020.We believe the consolidation of the payer channel to some degree has slowed the further rollout of exclusion formularies etcOn the government front,most plausible Medicare/Medicaid reforms appear manageable.There are a range of price initiatives that have been discussed,but most appear manageable for the space.Increased patient out-of-pocket expense remains a challenge for the sector.The growth of high deductible plans has led to greater patient awareness of drug costs and perceived price increases.as will 2020 Presidential Election rhetoric.It remains to be seen how much of a headwind this could represent for the group.15Of US Medicarespend:The US payer system is fragmented with 40%of US revenues paid for by US govt,40-45%by private insurers and 10-15%from out-of-pocket costs This analysis is based on Major Pharma geographic mix and industry-wide payer mix.Individual US Major Pharma or Biotech companies may be more/less exposed to Medicare/Medicaid populations.48%US52%ex-USPayers Remain A Fragmented MarketOf theUS drugindustry:Source:Company reports,CMS National Health Expenditure Accounts,Kaiser Family Foundation,J.P.Morgan estimates.Assuming Major Pharma has a similar US reimbursement mix as the broader industry:50%of revenues are from US Sales15%of revenues are exposed to US Medicare3.5%of revenues are exposed to US Medicare Part BMedicare31%Medicaid10%Private Insurance42%Out of pocket13%All other*4%Medicare Part D76%Medicare Part B24%16Commercial Pricing:We See No Major ChangesOn the commercial side,much of the low hanging fruit on formulary management has been achieved,and we see specialty drugs as a much more difficult target for limiting accessPayers remain largely focused on drug pricing,particularly where:1)outcomes can be easily and reliably measured,2)products are lower on the innovative curve,and 3)patients have non-life threatening conditions.Expecting more modest list price increases in 2019 and beyondWe see slowing list price growth and more disclosure on“net”realized price increases as reducing headline risk for the sector.Further,efforts such as authorized generics and patient assistance programs could help address out-of-pocket concerns.New and differentiated products offer the best protection from pricing pressuresPayers are generally willing to reimburse innovative products that are differentiated from competition.It is very difficult for payers to restrict access to these drugs.It is critical to demonstrate meaningful improvement in safety,efficacy,and/or ease-of-use.We are not expecting significant price resets in any major categories in 2019/2020Diabetes expected to see modest price erosion,similar to 2017/2018Watching psoriasis dynamics with a number of new entrantsExpecting CGRPs to be broadly covered although formularies may cover only 2 of the 3 approved agents17We Expect List Price Increases to Slow in 2019While the industry has sought to address rising list prices through self-regulation(only one,single-digit list price increase per year,etc.),gross prices for the top 20 products in the space continue to increaseAmong the top 20 US pharma drugs by IQVIA sales,we estimate 5.0%8%,8%gross price increases for 2019YTD,2018,and 2017 respectively.We do expect this dynamic to moderate in the coming years and see price increases deceleratingFurther,the industry appears increasingly focused on addressing patient out-of-pocket costs,which could help address negative perception of industry pricingSource:IQVIA,last updated as of August 2018DrugCompanyCategory/Class2015 (%)2016 (%)2017 (%)2018 (%)2019YTD (%)1HumiraAbbvie(ABBV)Auto-Immune18.6%18.6%8.4%9.7%6.2%2EliquisBristol Myer(BMY)Cardiovascular5.9%7.9%7.9%7.9%6.0%3EnbrelAmgen(AMGN)Auto-Immune27.9%9.9%8.4%9.7%6.2%4StelaraJ&J(JNJ)Auto-Immune10.0%4.9%7.9%7.9%6.9%5JanuviaMerck(MRK)Diabetes13.1%9.9%7.2%10.3%5.0%6XareltoJ&J(JNJ)Cardiovascular5.9%7.9%7.9%8.0%6.9%7TrulicityEli Lilly(LLY)Diabetes17.7%8.9%8.0%8.0%4.0%8KeytrudaMerck(MRK)OncologyN/A3.0%3.0%3.0%1.5%9LyricaPfizer(PFE)Pain/Inflammation19.8%14.4%14.6%14.3%3.6%10RemicadeJ&J(JNJ)Auto-Immune10.0%9.5%6.9%N/AN/A11OpdivoBristol Myer(BMY)OncologyN/A3.0%3.8%2.3%2.3%12RituxanRoche(ROG)Auto-Immune/Oncology6.1%7.4%8.2%8.2%N/A13Lantus SolostarSanofi(SNY)DiabetesN/AN/AN/A5.3%5.2%14GenvoyaGilead(GILD)HIVN/AN/A6.9%6.9%4.9%15BiktarvyGilead(GILD)HIVN/AN/AN/AN/A4.9%16TecfideraBiogen(BIIB)Multiple sclerosis11.3%9.6%10.6%8.0%6.0%17SymbicortAstraZeneca(AZN)Asthma8.0%6.0%6.0%6.0%6.0%18NeulastaAmgen(AMGN)Oncology10.0%10.0%9.9%7.3%N/A19VyvanseShire(SHP)Attention disorders14.5%9.0%9.0%9.0%3.0%20VictozaNovo(NOVOB)Diabetes17.7%8.0%7.9%7.9%5.9%Top 20 Average13.1%8.7%7.9%7.8%5.0%18We See Little to No Net Price Increases for the Sector in 2019Rebates have increased in the past 5-6 years as the gap between gross pricing increase(10%avg)and net pricing increase(3%avg)widenedThe increased level of rebating resulted from increased competition within therapeutic areas,increased payer focus on formulary management,as well as payer consolidation.With list price increase