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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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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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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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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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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