20150731-高盛-Weekly_Healthcare_Pulse_24页_460kb

Weekly Healthcare Pulse Summary

Core Content

This report provides an overview of the healthcare sector's performance and market dynamics during the second quarter of 2015, with a focus on earnings, M&A activity, and investor sentiment. It also outlines key themes and upcoming earnings for the week of August 3–7, 2015, and highlights notable stock movements and market trends across subsectors.

Main Sector Performance

• Healthcare Sector: 70% of S&P HC companies reported 2Q results, outperforming the S&P 500 in both positive EPS surprises (74% vs. 51%) and positive revenue surprises (46% vs. 26%).
• Price Action: Despite strong earnings surprises, the median HC stock underperformed the day after results.
• Market Sentiment: A shift in sentiment from July's selloff due to M&A uncertainty, generic pricing fears, and short-term pressure. The August outlook appears more constructive with cleaner positioning, performance recovery, and friendlier seasonals.

Key Subsector Highlights

Major Pharma/Generics

• Allergan (AGN): Announced the sale of its generics business to TEVA for $40.5bn, which is expected to unlock value and put AGN in a net cash position.
• Pfizer (PFE): Showed urgency for potential M&A, with AGN, BMY, VRTX, and Shire as possible targets.
• Investor Sentiment: Cautious on dental SIROs due to weak tech equipment spending, though positive on BDX and BKD.

Biotechnology

• AMGN, ALXN, GILD: Helped reduce nervousness in the sector after BILB's disappointing results.
• AMGN: Focused on Repatha (PCSK9) for high cholesterol, with a PDUFA date in August.
• GILD: Concerns remain over the tail end of its hepC franchise, but internal pipeline and M&A potential could drive multiples.

Specialty and SMID Pharma

• PCRX: Led the subsector with a strong 2Q performance, reversing an early selloff and being viewed as an attractive M&A candidate.
• Investor Focus: On potential M&A targets, especially in the generic sector.
• Stocks Lagging: MNK, IPXL, and IRWD showed weaker performance, possibly due to upcoming earnings and market uncertainty.

European Pharma

• GSK, AZN, Bayer, Sanofi: All beat EPS and revenue expectations, showing strong performance.
• Investor Sentiment: Positive on pipeline progress and R&D momentum, though some stocks like Taisho (4581.T) underperformed due to weak results.

MedTech

• Fundamental Improvement: 2Q results showed broad-based growth in organic revenue, driven by utilization and hospital capex.
• Investor Sentiment: Improved, with BAX gaining positive momentum due to solid results, CEO search, and capital allocation plans.
• M&A Outlook: Generalists are more interested in acquirers than targets, with PFE and AGN being viewed as potential acquirers.

Life Science Tools/Diagnostics/Labs

• Tools: Outperformed due to biopharma spending and Point-of-Care technologies.
• Lab Reimbursement: Uncertain, with PAMA data collection possibly delayed until 2018.
• Notable Performers: HOLX and LH showed strong performance due to product cycle momentum and volume improvements.

Managed Care

• ANTM and CI: Showed solid results but faced investor uncertainty due to political/regulatory concerns.
• MOH: Gained strong investor reception (+10%) with a clear M&A strategy to remain independent.
• Upcoming Earnings: AET, HNT, WCG are set to report next week, with growth and cost management as key themes.

Providers

• Volume Growth: Continued into 2Q, driven by acquisitions and new facilities.
• Pricing Trends: Improved, with occupancy concerns still affecting BKD.
• Investor Sentiment: Positive on long-term growth potential and operational momentum.

Supply Chain/Drug Chains/HCIT

• MCK: Sold off due to moderating generic inflation, but remains Buy-rated due to synergies with Celesio.
• Drug Chains: Outperformed, with CVS showing purchasing synergies and Red Oak milestones.
• HCIT: CERN outperformed after winning the DoD EMR contract, with next week's focus on contract details and revenue trends.

Upcoming Earnings

• August 3–7, 2015:
  • BDX: Expected to report with positive utilization, research spending, and hospital capex.
  • REGN and BMRN: Close large-cap earnings, with REGN focusing on new product launches and BMRN on M&A.
  • ALNY, AGIO, ARIA, CLVS, OPHT: Smid-cap earnings expected, with ALNY and CLVS highlighted for pipeline progress.
  • THC, CYH, SCAI, DVA, AMSG, TMH, HCA: Facilities and managed care earnings to be closely watched.

Notable Market Trends

• M&A Activity: High interest in transformative deals, especially in AGN, PFE, and TEVA.
• Investor Sentiment: Improved in medtech and managed care, with AGN and PFE seen as potential acquirers.
• Dividend Growth and FCF Yield: Investors are showing interest in discounted YTD laggards with high FCF yields and dividend growth potential.
• Options Markets: Highlighting increased likelihood of M&A in ABBV, MOH, and ZTS.

Investment Grade and High Yield

• High Yield Healthcare: MNK's sale of its imaging business is viewed as a net credit positive, with TEVA's $40.5bn acquisition of AGN's generics business expected to impact debt issuance.
• Investment Grade Healthcare: Celgene and Pfizer may issue bonds to fund acquisitions, with healthy concessions expected in the process.
• Bond Market Outlook: Potential for record issuance in the second half of 2015, especially for large-cap companies.

Summary Table

Conclusion

The healthcare sector showed strong earnings performance in 2Q, with positive surprises in EPS and revenue. However, price action was mixed, and M&A uncertainty remained a key concern. The August outlook is more constructive, with improved sentiment, cleaner positioning, and positive seasonal trends. Investors are focusing on M&A potential, pipeline progress, and dividend growth as key themes. The upcoming earnings calendar is expected to provide further clarity and momentum in the sector.