We track Emerging Markets growth rates for our covered companies. It has accelerated consistently since mid-2016; in Q3 2018 it was 11.6% y/y. From Q1 2012 to Q3 2018, y/y growth has been: 6.4% (10.3% (9.1% (9.5% (6.4% (10.3% (9.1% (9.5% (7.4% (6.1% (3.9% (9.5% (6.4% (8.3% (10.9% (8.0% (7.5% (4.7% (3.6% (3.2% (4.4% (1.8% (3.6% (3.3% (5.8% (6.1% (7.4% (7.5% (9.1% (9.5% (11.6% (Exhibit 1).
Search Coverage List, Models & Reports
Search Results1-10 out of 10
This report covers the bull/bear case, current controversies, relative growth prospects and more for our 10 US & EU global pharmaceutical companies.
The Medicare coverage gap, aka “donut hole”, has been a component of the Medicare Part D program since it was established in 2003. The presumed intent of the donut hole was to increase patients’ financial responsibility during some part of their care, with the hope that they would help contribute to making rational drug choice decisions. However, the enactment of the Patient Protection and Affordable Care Act (the “ACA”) in 2010 has sought to undo this – it encompassed legislation to lower beneficiaries’ financial exposure, with the goal of eliminating it completely by 2020.
Roche held an investor conference all this afternoon to highlight data presented at this year’s American Society of Hematology (ASH) annual meeting.
We recently wrote a brief investor update on the investment case for BMY (BMY: Summarizing the Investment Case). In it, we said that it is time to move on from the idea that Opdivo+Yervoy in lung cancer is going to work. This is because the totality of the evidence thus far (from both BMY and AZN) has been that anti-CTLA4 therapies just don’t seem to do much in this particular tumor type. A bearish view on CTLA4 is not a thesis change for us, but for many of the former “bulls” on the stock it has been, and it is one of the reasons BMY shares have struggled.
On November 19th, we published a report (Global Pharmaceuticals - Removal of "Protected Drug Class" Status Coming?) claiming that the Administration may seek to change language related to the six “protected drug classes” in the near-term. Proposed changes have just been released (along with other proposals aimed at helping to manage healthcare spending; not addressed in this report). These proposals are not finalized, meaning it is not clear what ultimately survives the comment period that comes next; implementation would likely begin in 2020.
Presently, six classes of drugs are protected from aggressive formulary management in Medicare Part D plans. This “protected drug class” policy came into effect in 2003 when Medicare Part D was first established.
We had recently downgraded ROG from a long-standing Outperform, and we re-emerge in the same position. Admittedly, what is striking about ROG versus peer companies is its current late-stage pipeline – a testament to being a best-in-class R&D company, the thrust of our prior favorable rating. Unfortunately, the ROG story is a tug-owar, between a compelling pipeline and a worrisome set of patent expiries. Our belief is that, despite the pipeline, investor attention will likely be overwhelmed by the prospects of Roche’s three biggest drugs (representing ~CHF20B) being at the front end of generic entry, at a time when it is not clear just how fast these types of products will erode. Bulls will argue that ROG’s valuation already reflects these concerns, and that the future value of its pipeline is being under-estimated. This is possible, but our current model has earnings estimates that begin to trail consensus to a fair degree in 2020+,making ROG a difficult name to be constructive on.
We’re re-establishing coverage on Global Pharmaceuticals. This includes five US- and five EU-based large cap, multinational drug companies that we’ve known for a long time.