Large Cap Biopharma Winners and Losers -Looking for Product Growth
We will sift through these metrics and new product news over the coming months to find value in these names. Most should be considered “Market Performers” with some added safety if they offer dividends. Watch Regeneron (REGN) for upgrades by analysts. Technicals should matter a lot since it could portend news ahead.
We will have to wait another quarter or maybe ASCO news to revive large cap biotech stocks. All of the earning reports are in and only a handful of companies rallied on growth prospects. Two of our four top stocks large cap picks Abbvie (ABBV) and Bristol-Myers Squibb (BMY) are up since we recommended them because of their growth potential in “Immuno-Oncology”. Roche ADR (RHHBY) a recent pick is not included here because of it being a Swiss Company with limited financial updates. Investors are looking for new products and revenue growth given the higher valuations compared to larger drug companies like Lilly, Merck and Pfizer. The product pipelines show promise with many of these companies but have not yet dramatically boosted the top line.
- IBB remains a good proxy for large caps and is off its lows in 2016 but shows little momentum.
- Regeneron Pharmaceuticals (REGN) has a broad and deep pipeline with 25% top line growth estimates for 2016 but is still a one product Company with Eyelea(R). Very significant collaboration revenue. A high PEG of 3.3 so watch product milestones and regulatory filings.
- Gilead Sciences (GILD) shows great value but declining revenue growth due to price cuts in their HCV portfolio. Looking for a technical bottom. Very strong balance sheet.
- Celgene (CELG) seems to be everybody’s growth favorite with 18% top line forecasts but technicals are very weak lately.
- Amgen (AMGN) and Biogen (BIIB) have good value but growth has slowed considerably.
- M&A should pick up with some of these players doing accretive smaller deals now that inversions are out.
| Company | Ticker | Price | Market | 2016 | P/S | PEG | Q/Q | Q/Q | Stock Perf | Price 1/18 | % Week | Price 5/5 | %YTD | |
| 1/7/2016 | Cap $B | Rev$B | REV | EPS | %12 mos | 2016 | JPM | 2016 | ||||||
| 5/5/2016 | Gr% | Gr% | ||||||||||||
| Abbvie | ABBV | 57.21 | 101.2 | 23.78 | 4.26 | 1.08 | 18.2 | 31.1 | -3 | 57.32 | 0 | 62.34 | 5.22 | |
| Alexion | ALXN | 174.37 | 32.79 | 2.7 | 12.12 | 10 | 16.8 | -9.4 | -17.3 | 158.68 | -9 | 142.58 | -25.25 | |
| Amgen | AMGN | 152.98 | 117.3 | 21.7 | 5.42 | 2.1 | 3.8 | 40.9 | -3.8 | 151.35 | -1 | 154.25 | -4.98 | |
| Biogen | BIIB | 284.01 | 59.25 | 10.94 | 5.42 | 1.72 | 6.7 | 26.8 | -31.5 | 273.33 | -3.76 | 264.62 | -13.62 | |
| Bristol Myers | BMY | 65.27 | 119.1 | 16.56 | 7.19 | 3.39 | 8.7 | 0.5 | 10 | 62.78 | -3.8 | 71.15 | -3.43 | |
| Celgene | CELG | 111.89 | 83 | 9.26 | 8.97 | 2.37 | 20.7 | 15 | -8 | 103.06 | -7.89 | 101.71 | -15 | |
| Gilead Sci | GILD | 96.25 | 127.9 | 32.64 | 3.92 | 5.75 | 2.6 | -8.6 | -18.2 | 91.84 | -4.58 | 85.86 | -15.15 | |
| Regeneron | REGN | 501.96 | 41.2 | 4.1 | 10 | 3.32 | 36.9 | 69.9 | -19.8 | 462.95 | -7.76 | 377.73 | -30.4 | |
| IBB | 304 | 6.1 | -22.3 | 284.18 | -5.93 | 259.19 | -23.39 | |||||||
| XBI | 61.82 | 1.55 | -30.6 | 50.47 | -28.11 | |||||||||
| FBIOX | -33.2 | 163.64 | -30.5 | |||||||||||