GILD: Investor Debate Focused on Threat of GSK in HIV and on Management Departures

- GSK's 2-drug regimens are seen as potential threats to Gilead's HIV portfolio given the cost and safety benefits. However, sell-side experts and key opinion leaders remain unconvinced.

- Investors are also concerned about the recent slew of management departures, which could put the stock in near-term limbo and delay turnaround progress

- Other discussions include HIV strength, HCV stabilization, Yescarta's longer-term upside, and potential outcomes from upcoming readouts for filgotinib and NASH trials

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Alkermes: Catalyst-Rich Months Ahead for the Pipeline

- Alkermes has three key catalysts ahead for the company that will significantly alter the perceived value of the company

- For ALKS5461, most investors do not see an approval on first pass, which might present an attractive risk/reward profile ahead of the announcement

- For ALKS4230, phase 1 dose escalation data should provide visibility into the potential of the drug (with many investors viewing it as high)

- For ALKS3831, there is a more balanced debate about what weight gain data might be shown in its phase 3 readout in 4Q18

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Eli Lilly: Diabetes and Upcoming REWIND Data Key Topics of Debate

- Diabetes growth should be driven by Trulicity and Jardiance, although both face upcoming competition from Novo Nordisk's oral semaglutide. Trulicity also faces competition from Ozempic that has shown superior clinical efficacy.

- REWIND readout expected in 4Q18 could alter Trulicity's expected growth trajectory significantly (positively or negatively) and has been a heavy topic of debate among investors. Investors increasingly doubt the likelihood of a CV benefit given trial design concerns.

- Other developments include upcoming pain franchise catalysts and the divestiture of the Animal Health business, which could generate funds for additional M&A.

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Match: Will Facebook's Dating Feature Crush Match, or Does it Present a Buying Opportunity?

- Analysts are overwhelmingly bullish on Match with the recent pullback from Facebook's upcoming dating feature. Analysts see a large market with room for multiple players to succeed, and numerous other reasons for optimism.

- Match has a number of growth drivers that should provide upside to the stock. The company remains in the early innings of monetizing its significant user base, and will also grow internationally.

- Several risks exist, including the risk that Facebook's curated approach succeeds and dents Match's growth trajectory. There is also headline risk once Facebook announces more detailed plans in the dating space.

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Reata: Street Bullish on Chronic Kidney Disease Implications and Rejection of Hyperfiltration Argument

- Reata's bardoxolone molecule holds the potential to impact numerous kidney diseases due to its fundamental mechanism of action in reducing inflammation and enhancing energy production in the cell.

- Reata's trial results studying bardoxolone's impact on Alport Syndrome were a strong counter to the bear thesis on hyperfiltration and safety, which had lingered for some time.

- Upside for the stock lies in the potential for bardoxolone to impact several other rare kidney diseases. Bardoxolone has now been validated by numerous trials.

- Risk lies in the early stage of several studies, small sample sizes, and high investor expectations.

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Allergan: Inflammation is the Reason Investors Did Not React Well to Abicipar Results

- Allergan announced positive topline results for abicipar, its treatment for wet age-related macular degeneration. However, the stock did not react well to the announcement

- Investors were hoping for a lower inflammation signal but saw a higher-than-expected incident rate. Focus now shifts to the company's phase 2 MAPLE study which looks at a reformulation of the drug.

- Beyond the inflammation signal, abicipar could come up against further competition from a 12-week dose from Eylea and upcoming biosimilars for Lucentis. The revenue opportunity remains potentially significant though if Allergan can reduce inflammation.

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Biogen: A Deep Dive into the Promising Results of BAN2401 and Other Alzheimer Treatments

- Biogen recently announced positive results from BAN2401's phase 2 trial that showed the potential to be the first disease-modifying drug on the market.

- Our current understanding of the underlying mechanisms of Alzheimer's Disease (AD) suggests that the removal of amyloid beta accumulation could slow the progress of AD. BAN2401 fits within this category.

- Investors and AD experts are debating the interpretation of the results. Study design and magnitude of the effect is in question, but overall results provide further validation of amyloid hypothesis. If successfully approved, the drug could generate $5+ billion in revenue.

- To better assess the odds of success, investors should look for more detailed BAN2401 results at the AAIC and monitor other drug developments for further validation, including aducanumab and crenezumab. Biogen also has another AD drug, elenbecestat that will be presented at the AAIC conference.

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Allergan: Crucial Period Ahead for Company as Activist Pressure Mounts

- Allergan is under pressure from activist shareholders and other investors to formulate a clear strategic plan and make more drastic changes to the company

- Botox Aesthetics, Botox Migraine, and Restasis will all face upcoming competition which could hamper sales growth

- Critical catalysts are approaching that could materially change whether the company makes more drastic changes or not. Expect important readouts from ubrogepant, abicipar, and rapastinel over the next six to nine months

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Pfizer: Can Pfizer Grow to Targets with LOE Headwinds Ahead?

- The primary debate is whether Pfizer can grow sales at mid-single digit growth rates into the next decade despite a growing number of loss of exclusivity headwinds.

- Notable revenue headwinds include upcoming Lyrica competition, Enbrel declines outside of the US, and sterile injectables (SIP) supply issues.

- Label expansions will be crucial to drive above-consensus growth. Key drugs that are often-cited include Ibrance, Xtandi, and Xeljanz. Biosimilar growth and resolution of SIP issues represent another potential area for outperformance.

- Recent spat with Trump largely seen as a non-issue among investors.

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Medtronic: Diabetes Growth Key to Hitting Longer-Term Targets

- Management set long-term financial targets at their Investor Day in early June, and investors are primarily focused on the 4%+ organic growth rate target. Diabetes is the only segment that management is calling for above-corporate level organic growth rates, and is therefore a key part to the company achieving its targets

- Medtronic recently provided an update to its Diabetes growth plan at the American Diabetes Association conference. The company expects the CGM market to grow rapidly, and provided a plan to fill several gaps in its CGM device

- The 670G continues to be the gem within the company's Diabetes segment and will be the primary driver of growth. While competition is heating up in the race for an artificial pancreas, MDT plans to stay ahead and will begin 690G trials soon.

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Johnson and Johnson: Will Pipeline Drugs Offset Sales Erosion to Upcoming Generics?

JNJ is a massive company with many products stretching across its three segments: Pharmaceutical, Consumer, and Medical Devices. 

- The Pharmaceutical segment is the key to the bull and bear thesis, as it represents a majority of revenue and operating income. A number of drugs will face generic competition in 2019, and investors are watching to see if the pipeline is robust enough to fend off revenue erosion

- Consumer and Medical Devices have lagged Pharmaceuticals growth, but management outlined a robust plan to turn the businesses around over the next several years at a recent Investor Day on May 16. These segments may become a bigger part of the story should Pharmaceutical segment growth slow, and is essential for JNJ's multiple to recover

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Etsy: Management Finally Raises Fees; Multiple Levers Remain for Higher Growth

On June 14, Etsy announced a seller transaction fee increase from 3.5% to 5.0% (which is also now inclusive of shipping costs). This was long thought to be one of the major revenue levers that management had to pull, and they will be doing so from a position of strength as gross merchandise sales (GMS) growth has now accelerated over the last four consecutive quarters. The stock is now up over 25%, but investors remain bullish on the company's future. The key topics that investors are talking about are:

- The other major areas of opportunity for Etsy, including more marketing, better discoverability, improved conversion rates, and more seller tools

- Possible seller backlash and competitive threats

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Mylan: With Neulasta Biosimilar Approval, Focus Moves to Advair and Restasis

- Mylan's recently received approval of Fulphila, their Neulasta biosimilar. Analysts expect the drug to contribute to management's guidance and importantly, demonstrates the company's ability to bring complex generics and biosimilars to the market

- Investor focus now shifts to two upcoming, and sizable, opportunities: gAdvair on June 27, and gRestasis on July 31.

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Mylan: Guidance Concerns Grow as Drug Approvals are Delayed

Mylan has drifted down by about 14% since early March as institutional investor concerns have grown over that time. Concerns have specifically centered around risk to 2017 and 2018 guidance due to approval delays in the company's new product pipeline. Additionally, the company's core business (generics and Epipens) have had new developments that have raised concerns over their outlooks as well. 

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Select Comfort: New Mattresses Could Provide a Boost to Sales

Select Comfort has been a rollercoaster of a ride. The stock has had several huge swings, both up and down, that have probably had shareholders ready to throw up. The ups have been driven by a combination of a recovering consumer, a strong "specialty" mattress backdrop (specialty is essentially any non-innerspring mattress - memory foam, adjustable, etc), and Select Comfort's ongoing innovation. The downs have been driven by the competitive environment, execution issues, and volatility within the consumer environment. In the end, you get a stock that is up 25% over the last 5 years but is trying to find some stability in the midst of a major new product launch.

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Medtronic's Diabetes Segment Generating Excitement

Medtronic is a pure-play medical device company. The company is a mid-single digit revenue grower driven by product segment innovation, international growth, and acquisitions. Profitability is further boosted by integration of their acquisitions and growth within their high-margin segments. They also generate strong free cash flow and aim to return 50% of that to investors.

Within Medtronic, The Diabetes Group is the smallest, but fastest growing, segment and is arguably the most promising one among all of them. Much of the excitement comes from its upcoming 670G device, which can potentially upend diabetes treatment and boost growth rates for multiple years.

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Bed Bath & Beyond: Be Careful of the Free Cash Flow Defense

Bed Bath and Beyond reported 1Q earnings that were drastically below what were already low expectations heading into the quarter.  The company reported EPS of $0.53, which was well-below consensus of $0.66, and the stock declined 12% on Friday.

There have been some contrarians that have come out in defense of the company, arguing that Bed Bath & Beyond generates significant free cash flow and returns much of that in the form of share buybacks and dividends.

But here's why that argument is misguided. This sort of defense works for a company like Staples, where profitability is stable, and net income is flat. This is not the case for Bed Bath & Beyond, which has deteriorating fundamentals across the board. Free cash flow will eventually follow, meaning that share buybacks and repurchases are not sustainable.

To show this, I'll first walk through the deterioration in fundamentals. I'll then connect this to free cash flow and show how that hurts the free cash flow outlook going forward. Finally I'll address what I see as the bull case is for the stock.

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