巴克莱-美股-生物制药业-美国生物制药业2018年Q4盈利预览-2019.1.18-89页.pdf

Equity Research 18 January 2019 CORE Barclays Capital Inc.and/or one of its affiliates 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.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 83.U.S.Biopharmaceuticals 4Q18 Earnings Preview Sentiment turning positive in US Biopharma as M&A provides source of optimism:After a dismal December,the sector appears poised for continued upward momentum after a rebound in biotech to start the year(NBI:+13.4%,DRG:0.0%,S&P:+5.1%),driven largely by recently announced large scale deals(CELG and LOXO).With increased deal speculation across the space(both large and SMid cap),we see an opportunity for increased M&A in 2019,with the ongoing pace of innovation/clinical progress to remain a key fundamental driver.Given modest 2019E Biopharma growth expectations(+6%revenue,+7%EPS),we see strong upside potential from a P&L perspectivealthough negative FX impact and drug pricing could remain overhangs over the course of the year.Looking to the quarter,we think the group is relatively well positioned going into 4Q earnings,and while we expect companies to caveat 2019 with the usual cautions(seasonality,donut hole),guidance should meet consensus expectations at a minimum.Overall we maintain our positive view on the sector,with new product cycles likely to outweigh increased competition and political risks to drug pricing.Join us for a call today at 10:30am ET with slides to discuss 4Q18 and 2019.Dial-in:800.706.8249(US);706.634.5881(OUS);Passcode:7092134.Positive positioning for Lilly and Gilead:We expect a strong quarter from Lilly as volumes have continued to increase for key products over 4Q18.Growth in the GLP-1 class and accelerating share gains for Trulicity are driving our$6.4B revenue forecast($100M above consensus).Gilead is set up for a solid quarter with continued volume growth across the HIV portfolio driven by the Biktarvy launch and increased adoption of Truvada as PrEP.Given Gileads expectation for resumed growth in 2019 after the 2018 trough(we agree),continued execution in HIV,a stabilizing HCV market,and growth from Yescarta uptake could provide a base from which pivotal readouts for filgotinib in RA and selonsertib in NASH could provide a sightline to reaccelerating growth.Bristol Myers 2019 revenue guidance could provide key insights:We expect extensive discussion of strategic rationale for the Celgene acquisition and think that special attention will be paid to implications on the I/O franchise as a result of the deal.2019 revenue guidance should be telling to Bristols expectations for Opdivo in 2019,as some fear that a negative Opdivo outlook served as an impetus for the deal.In our view,strong 2019 guidance could allay those fears.AbbVie and Amgen facing biosimilar headwinds in 4Q18:We expect a headwind from new biosimilar competition to several of our companies,with AbbVies EU Humira sales facing erosion from recent biosimilar entrants(mid-October 2018 launches)and Amgens Neulasta continuing to cede share to Mylans biosimilar(Fulphila;launched Jun-2019),with further pressure to come from Udenyca(launched Jan-2019).PT changes:We are raising our price targets for LLY to$130(from$120);MRK to$80(from$78);and BIIB to$340(from$320).We are lowering our price targets for BMY to$53(from$58);CELG to$102(from$107);and GILD to$90(from$95).INDUSTRY UPDATE U.S.Biopharmaceuticals POSITIVE Unchanged For a full list of our ratings,price target and earnings changes in this report,please see table on page 2.U.S.Biopharmaceuticals Geoff Meacham,Ph.D.+1 212 526 2795 BCI,US Olivia Brayer+1 212-526-5914 BCI,US Greg Harrison,CFA+1 212 526 1544 BCI,US Jason Zemansky,PhD+1 212 526 6608 BCI,US Scott Puckhaber,MD+1 212 526 5157 BCI,US Kristen Stewart,CFA+1 212 526 6965 BCI,US Barclays|U.S.Biopharmaceuticals 18 January 2019 2 Summary of our Ratings,Price Targets and Earnings Changes in this Report(all changes are shown in bold)Company Rating Price Price Target EPS FY1(E)EPS FY2(E)Old New 17-Jan-19 Old New%Chg Old New%Chg Old New%Chg U.S.Biopharmaceuticals Pos Pos AbbVie Inc.(ABBV)EW EW 87.20 90.00 90.00-7.90 7.93 0 8.90 8.60-3 Alexion Pharmaceuticals(ALXN)OW OW 114.62 175.00 175.00-7.65 7.63 0 8.60 8.80 2 Amgen Inc.(AMGN)EW EW 201.92 195.00 195.00-14.18 14.24 0 14.68 14.35-2 Biogen(BIIB)EW EW 338.34 320.00 340.00 6 25.45 25.91 2 28.40 27.78-2 Bristol-Myers Squibb(BMY)EW EW 49.60 58.00 53.00-9 3.86 3.88 1 3.95 4.10 4 Celgene Corp.(CELG)OW OW 86.59 107.00 102.00-5 8.90 8.84-1 9.70 10.62 9 Eli Lilly&Co.(LLY)OW OW 119.16 120.00 130.00 8 5.60 5.60-6.05 6.05-Gilead Sciences(GILD)OW OW 68.65 95.00 90.00-5 6.80 6.95 2 6.95 7.05 1 Incyte Corp.(INCY)OW OW 78.67 85.00 85.00-1.20 1.15-4 1.85 2.05 11 Johnson&Johnson(JNJ)EW EW 129.09 137.00 137.00-8.16 8.18 0 8.60 8.50-1 Merck&Co.(MRK)OW OW 75.60 78.00 80.00 3 4.36 4.36-4.70 4.75 1 Neurocrine Biosciences(NBIX)OW OW 88.60 95.00 95.00-0.25 0.25-1.30 1.80 38 Pfizer Inc.(PFE)EW EW 42.47 40.00 40.00-3.01 3.00 0 3.06 3.12 2 Regeneron Pharmaceuticals(REGN)UW UW 417.38 315.00 315.00-21.00 21.83 4 17.00 20.00 18 Seattle Genetics(SGEN)OW OW 71.22 90.00 90.00-0.95-0.97-2-0.55-0.51 7 United Therapeutics(UTHR)UW UW 114.19 100.00 100.00-13.90 14.18 2 9.60 8.00-17 Vertex Pharmaceuticals(VRTX)OW OW 190.52 200.00 200.00-4.10 3.90-5 5.05 4.54-10 Source:Barclays Research.Share prices and target prices are shown in the primary listing currency and EPS estimates are shown in the reporting currency.FY1(E):Current fiscal year estimates by Barclays Research.FY2(E):Next fiscal year estimates by Barclays Research.Stock Rating:OW:Overweight;EW:Equal Weight;UW:Underweight;RS:Rating Suspended Industry View:Pos:Positive;Neu:Neutral;Neg:Negative Valuation Methodology and Risks U.S.Biopharmaceuticals AbbVie Inc.(ABBV)Valuation Methodology:We value ABBV using a discounted cash flow analysis that assumes a WACC of 9.3%,implying an intrinsic value of$90 per share.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:If biosimilars make greater headway into the market and cannibalize further share Humira could potentially face additional downside risk.As Humira currently comprises over 60%of total sales,a decline in the drugs outlook could severely impact ABBVs earnings.In addition,the HCV portfolio could fail to capture share from existing competition.Also,Imbruvica could be limited in its label expansion and oncology growth may not meet expectations.Pipeline failures could also drive downside for AbbVie.Alexion Pharmaceuticals(ALXN)Valuation Methodology:Our price target of$175 is based on a sum-of-the parts NPV analysis.We forecast sales to 2027 for Soliris and 1210,2026 for Strensiq,and 2031 for Kanuma,and include a terminal value.We use a discount rate of 13%for our forecast period,which we think appropriately reflects the risk of the portfolio.For our terminal value we assume a less than 1%growth rate and a discount rate of 11%.We derive a value of$71/share for Soliris,$85/share for 1210,$16/share for Strensiq and$2/share for Kanuma.This results in a total NPV for ALXN shares of$175.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:Downside risks include:1)Commercial:Lower than expected sales of Soliris(especially with the launch of the gMG indication),Strensiq,or Kanuma;We also see potential for biosimilars to Soliris(and other complement competition)given the number of firms working on assets 2)Development risk:1210 development failure in aHUS would significantly impact shares,3)Regulatory risk:even if 1210 is successful FDA or EMA could require additional studies,delaying launch.Amgen Inc.(AMGN)Valuation Methodology:Our$195/share price target is based on a P/E multiple analysis and supported by our sum-of-the-parts NPV analysis.We view significant upside to the forward multiple as unlikely given the lack of compelling growth,priced in competition expectations in the near term for Kyprolis and Repatha,and biosimilar risk to established franchises.Our price target assumes that Amgen can trade at approximately 14x our 2019E EPS.Barclays|U.S.Biopharmaceuticals 18 January 2019 3 Valuation Methodology and Risks Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:1)Biosimilar risk:Any delays or failures related to companies developing biosimilars to Amgens legacy products(Neupogen,Neulasta,Aranesp,Epogen,Enbrel)would reduce the anticipated erosion of product sales,and benefit Amgen shares.However,the Street is generally anticipating modest erosion in the sales of these Amgen products over the balance of this decade.The entry of multiple biosimilar entrants may hasten this decline.2)Competitive risk:Amgen faces meaningful competition to its key growth products from other branded products,namely in multiple myeloma and hypercholesterolemia.Delays or failures in the development of these competing agents(e.g.,Takedas ixazomib,Bristols elotuzumab,or Regeneron/Sanofis Praluent),would improve the growth outlook for Amgen.On the other hand,successful phase 3 studies and launches of these products could pressure Amgen sales growth more than currently anticipated by the Street.3)Regulatory risk:Amgen currently has three products(Ivabridine,T-Vec,evolocumab)under review by FDA.Based on phase 3 data,we see risks to the approval of Ivabridine and T-Vec.If these products are approved,it could further boost Amgen shares.With regards to evolocumab,the drug is widely expected to be approved by its August 2015 PDUFA date.However,there remains uncertainty over the exact label and how this will be perceived by clinicians.A stricter label focused on narrow population could negatively impact Amgen shares.4)Financial risk:Amgen has provided guidance on margins through 2018(52-54%).This represents a meaningful over recent performance(37%in 2013,44%in 2014e).At the same time,the company has highlighted significant SG&A expense related to the projected launch of evolocumab,meaning that most of the margin improvement is likely back-weighted in the 2014-2018 period.Faster improvements to margins in 2015/16(with no detriment to the product launches)could see Amgen shares accrete additional value.Biogen(BIIB)Valuation Methodology:We value Biogen on a forward P/E basis assuming the shares trade at a modest discount of 1x turns relative to the average 1-year forward large-cap biopharma group P multiple of 13x,supporting our pt of$340share.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:1)Commercial Risk:Biogen has successfully launched multiple MS drugs.However may face commercial pressure as the MS field becomes more saturated.2)Regulatory Risk:Biogen has a broad pipeline that could result in positive late stage data.However,positive data is no guarantee that the FDA or EMA will grant approval.Delays in timelines or an inability to gain approval could significantly impact Biogens future sales.3)Clinical Risk:Biogen is developing multiple drugs for a broad range of diseases.The majority of these drugs are in the early to mid stages of development and could fail to demonstrate any benefits.As such Biogen may be unable to sustain its revenue stream.4)Patent Risk:Biogen relies on patents to protect its investment in drug development.However,generic entrants into the MS market,such as generic Copaxone could limit pricing power.Separately,other companies could challenge Biogens patents,similar to Forward Pharma and Tecfidera.Patent risk could significantly reduce Biogens future sales.Bristol-Myers Squibb(BMY)Valuation Methodology:We value BMY using a blended average of a price/growth basis based on the average for the large cap global therapeutics group,which we view as appropriate given that BMYs primary focus as a specialty drug/biotechnology-oriented company,and our discounted cash flow analysis.By assigning equal weighting to the two methodologies,we derive our price target of$53 per share.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:As BMYs growth prospects increasingly depend on the delivery of its immuno-oncology pipeline,any setbacks or delays could pose risk to the stock.The field of immuno-oncology is getting increasingly competitive and Bristols leadership is being challenged by other major players(particularly Mercks Keytruda).Any competitive disadvantage in terms of clinical development or regulatory timelines could put pressure on the stock.Celgene Corp.(CELG)Valuation Methodology:Our price target of$102 is based on a P/E multiple and is supported by our sum-of-the parts NPV analysis,using a WACC of 10.5%.For the base business,we assign$53/sh to Revlimid,$13/sh to Pom/Thal/Vidaza,$15/sh to Otezla,and$6/sh to Abraxane.For the pipeline we assign$13/sh for JCAR017,$6/sh for luspatercept,$9/sh for ozanimod.Combined with equity/platform value of$6/sh and YE18 net cash of$(20),supports of PT of$102.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:1)Commercial risk:Increasing prevalence in MM and Revlimids strong competitive positioning provide significant tailwinds that could drive upside to our forecasts.2)Reimbursement Risk Many products in the biotech industry have high price points and some of Celgenes products,including Revlimid,are no different.As such,it is not surprising that in certain regions or for selected payor segments that there is pushback on these costs or that a decision is made to use less expensive treatments as an alternative.Increased adoption of such strategies could negatively impact Celgenes operating performance or share price.3)Clinical Risk:Celgene has a deep pipeline of drug candidates,both internal and partnered,that the company is developing across a range of diseases.Many of these drugs are in the early-to-mid stage of development and could fail to meet their targeted endpoints in trials,or fail to demonstrate a meaningful clinical benefit.Such outcomes could put impair of Celgenes ability to launch new drugs and could pressure share performance.4)Litigation and Patent Risk:Patents related to Celgenes key product,Revlimid,are the focus of ongoing litigation which could lead to the market entry of a generic Revlimid prior to the companys expectations.If a generic Revlimid enters the market prior to Street expectation,Revlimid sales could fall,and Celgene shares would be negatively impacted.More generally,Celgene relies on patents to protect its investments in drug development.Generic entrants against Celgenes branded products could harm future sales.5)Regulatory Risk:Celgene has a broad pipeline that could result in positive late stage data.However,positive data is