Zillow: Digitizing the Home Buying Experience

- Zillow, Redfin, and Opendoor are all looking to improve the archaic buying experience in real estate through iBuying and offering adjacent products

- Zillow’s primary strength lies in its ownership of the customer relationship, which will translate into lower customer acquisition cost on both the buying and the selling of homes

- The unit economics remain unproven but Zillow has outlined a path to 2-3% adj. EBITDA margins. If successful, Zillow could more than double its adj. EBITDA

- Zillow’s most significant risk in the near-term is the large amount of change underway at both its new and core businesses. These changes, and the resulting guidance revisions that could come, keep me on the sideline for now

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AbbVie: Can Skyrizi and Upadacitinib Offset Humira Competition?

- For International Humira, the debate centers on whether there is further downside to AbbVie’s 2019 guidance of a 30% ex FX decline. This follows several downward revisions by management over the last year.

- For US Humira, the drug will face competition from several novel mechanisms of action, including JAK, IL-17, and IL-23 inhibitors in rheumatoid arthritis and psoriasis. These drugs could also present downside risk to Humira estimates.

- Skyrizi and upadacitinib are the most often-cited drugs within the pipeline. While they could offset some of the gap, AbbVie is looking at a $10B+ revenue gap from Humira, and Skyrizi/upadacitinib do not look exciting enough to cover the shortfall.

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Tesla: 1Q Issues Reduce Demand Visibility, but Long-Term Demand Still Appears Healthy

- Tesla saw 1Q deliveries fall short of expectations, leading to demand concerns. The key question is whether this is a temporary blip or an ongoing structural issue

- Based on the data we know today, I view the issues as temporary in nature and see strong longer-term demand driven by high customer satisfaction and strong market share within their existing products

- Model S/X weakness is concerning, but explained by the decision to stop selling entry-level models. An upcoming refresh mitigates this risk, but Tesla must demonstrate superior value to other models

- Tesla Network buzz ahead of the Autonomy Investor Day is overly bullish in my view, but Tesla could still financially benefit from a capable semi-autonomous driving system

- The path to a higher stock is driven by showing profitable demand that can fund the next growth initiatives - the China Gigafactory and Model Y. I believe this is likely to occur over the course of 2019

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Gilead: What Will Provide the Growth Needed for Multiple Expansion?

- In order to outperform, Gilead will need to generate higher revenue growth going forward

- HIV franchise sales will depend on Gilead’s ability to transition TDF-based patients onto newer TAF-based drugs after 2021. TAF-based drugs are safer, but generic TDF could look favorable to payers.

- Filgotinib is a key component of the pipeline and will have two important readouts this quarter. Expectations are high and Gilead will need to show strong safety results.

- Ultimately, Gilead has a path to growth, but the visibility is poor. Gilead must show a clearer vision to growth in order for the stock to rerate.

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Allergan: Botox Durability is the Key Value Driver

- Allergan’s recent failure with Rapastinel adds to the company’s woes. However, there is a portion of the investor community that remain believers in Allergan’s underlying value

- These investors see value in the Medical Aesthetics business, which will face competition soon from Evolus’s Jeuveau and Revance’s RT002. Bulls still believe the segment will grow in the mid single digits.

- Unlocking this value, either through drastic company actions (as activists are pushing for) or through consistent execution over the next several quarters, should drive the stock higher.

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Pfizer: Street Bullish as Growth Set to Reaccelerate Beyond 2019

- Lyrica sales are expected to erode significantly over the next two years as generics enter the market.

- Pfizer’s pipeline has strengthened significantly over the last several months and has a number of opportunities that could offset these losses and drive mid-single digit growth in the coming years

- Specifically, Ibrance, Xeljanz, Xtandi, Tanezumab, and Tafamidis represent significant opportunities that could drive growth for Pfizer

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TEVA: Is 2019 the Trough, or Will 2020 Continue to See Pressure?

- After showing several years of resilience, competition is finally starting to eat away at Teva’s Copaxone and ProAir revenue

- Investors and management expect Ajovy and Austedo to make up much of the loss in revenue in 2019 and 2020

- Beyond those two components, the generic environment, management’s ongoing cost cutting efforts, and the pipeline could determine whether 2019 will ultimately be the trough year or if declines will continue.

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Biogen: BAN2401 Not A Home Run Anymore, But Still Holds Some Promise

- Since releasing initial BAN2401 results in July, excitement among investors has waned as detailed analysis has shown confounding results. However, many investors still see promise in the drug.

- When viewed within the context of Biogen’s entire Alzheimer’s portfolio, Biogen remains well positioned to get an Alzheimer’s drug to market with aducanumab, BAN2401, and elenbecestat

- Amyloid beta hypothesis still has legs as drugs that target subtypes beyond monomers have shown some degree of clinical efficacy

- Possible futility analyses for aducanumab/crenezumab and FDA statement on ADCOMS as a legitimate endpoint are catalysts to watch, while aducanumab P3 readout in 2020 remains the key conclusive event.

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Mylan: Issues Persist but Expectations are Low and Several Catalysts Are Coming

- While investors have long criticized Mylan’s new product yield, a generic Advair and Restasis could finally be coming to market before the end of the year.

- In terms of recently launched drugs, gCopaxone has had a slow start but could be starting to pick up. Fulphila continues to do well, and Yupelri was approved by the FDA earlier this month.

- 3Q outperformance was helped in part by strong margin expansion due to new product launches and continued integration efforts

- Mylan still has issues, including a difficult generic environment and the ongoing Morgantown remediation. However, expectations are low, and the risk/reward could be favorable

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Johnson and Johnson: Pharma Remains the Key Debate but Other Segments Showing Signs of a Recovery

- The story around Johnson and Johnson consists of three components: an eroding piece (Zytiga and Remicade), a growing piece (numerous new drug launches and line extensions), and a turnaround effort in its Consumer and Medical Devices segment

- Within the eroding piece, Remicade, Zytiga, Concerta, and Velcade face ongoing competition and loss of exclusivity that could impact sales. Invokana has also struggled.

- However, management is optimistic that an extensive pipeline of new drug launches and line extensions can offset the declines. Stelara, Tremfya, Erleada, and Esketamine are most often discussed by investors.

- Outside of the Pharmaceutical segment, management is focused on turning around the Consumer and Medical Devices segments. Results from 3Q showed that these efforts were beginning to see returns.

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Abbott Laboratories: MitraClip Sees Significant Success in Functional Mitral Regurgitation

- Expectations were low for COAPT due to disappoting results from MITRA-FR. However, some analysts still believed COAPT was different enough to see a more positive outcome

- These analysts were right. COAPT results were overwhelmingly positive; both primary endpoints were met, as hospitalization and mortality saw significant reductions

- Results should provide a boost to ABT stock on Monday and positive read through to other companies pursuing transcatheter mitral valve repair

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Regeneron: Eylea Competition Coming but Pipeline Could Maintain Growth

- Eylea represents a significant portion of revenue and will face upcoming competition, which could slow Regeneron sales growth over the coming years

- Eylea recently received approval for a 12 week dose, but with cautious language on the label, leaving the door open for competitors to potentially take share when they enter the market.

- Dupixent is a promising asset that could drive growth after Eylea, but will need to get past reimbursement issues and execute on indication expansions to stay ahead of competition.

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Abbott Laboratories: MITRA-FR Potentially Not As Negative As It Appears for Upcoming COAPT Results

- MITRA-FR results in late August missed primary endpoints and was incrementally negative for MitraClip’s prospects at expanding into the functional mitral valve regurgitation indication

- However, numerous experts and analysts continue to believe that Abbott’s pivotal COAPT trial could still see success on 9/23 as the trial design differs in several key aspects

- Elsewhere, the company continues to see strong organic revenue growth, and its CGM device, Libre, is outperforming expectations

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Amgen: Aimovig Launch Looks Strong, Monitor Biosimilar Developments

- Initial data points on prescription trends for Aimovig suggest a strong launch for the drug and for the anti-CGRP class.

- Amgen faces upcoming biosimilar competition for Neulasta, but also expects its own portfolio of biosimilars to continue to develop. This includes Amgen's Humira biosimilar, which will launch soon in the EU.

- Amgen recently filed an sNDA for a once-weekly Kyprolis dose in combination with dexamethasone. The drug continues to track towards a $1-2 billion drug by 2022.

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Celgene: Will Revlimid's Patent Protection Hold Up?

- Celgene trades at a discount because its key drug, Revlimid, faces potential generic competition prior to the expiration of its patents in 2023.

- Investors and analysts have studied the patents and see a potential path to generic entry between 2020 and 2023. The case/settlement will likely hinge on dosing patents.

- Separately, Otezla continues to perform well for Celgene and has a number of catalysts for the remainder of the year that could drive further upside.

- Other tidbits include continued advancement of CAR-T programs, fedratinib NDA submission in 2018, and ozanimod filing in 1Q19.

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AbbVie: How Big is the Biosimilar Threat to Humira?

- AbbVie's Humira represents a sizeable portion of revenue, and will see biosimilar competition soon in the EU and in the US

- In the EU, a more biosimilar-friendly environment (net of regional differences) and the launch of at least three biosimilars could lead to more significant declines than expected.

- In the US, competition is not expected until 2023, and biosimilars have not gained much traction to date. However, the environment is changing.

- The pipeline looks promising with numerous label expansions planned that could offset Humira sales declines. Some investors are skeptical over whether it will be enough.

- Ultimately, the lack of visibility on Humira's growth trajectory prevents most of the street from turning more positive. 4Q18 Humira performance will be closely watched.

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Tesla: What BP's Oil Spill Tells Us About Potential SEC Enforcement for Musk

-With Musk ending his attempt to take Tesla private, focus will shift to potential SEC enforcement, which I believe will consist of a fine but no removal of Elon Musk

-Enforcement could hinge on whether Musk had intent to mislead investors with his tweets, which is a high bar to prove

-This is further supported by BP's oil spill, which involved disclosures that misled investors and a subsequent $525 million fine over three years, but no executive removal

-Despite these considerations, we still cannot rule out that the SEC will pursue a harsher punishment given the unprecedented nature of the disclosures

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Gilead: 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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