Category Archive for "Healthcare"

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Flu Effects on 4Q14 Earnings

The 2014 – ’15 flu season is slightly worse than 2013 – ’14 overall; we estimate flu-related hospital spending will be up roughly 30% Notably, most of the additional hospitalizations are occurring among the elderly (65+), in fact hospitalization rates

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R&D:Sales Ratios Will Fall, Meaning AZN & LLY are Cheap, Research Tools & Services are Expensive

Returns to R&D spending are below costs of capital and deteriorating further; despite this the average large pharmaceutical company has increased R&D:sales ratios over the last decade. This implies that managements have faced little if any pressure to return cash

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SSR Health New Product Approval Portfolios & Supporting Data Update

Drug, biotech, and research-based spec pharma stocks tend to outperform their peers in the year or so before and after regulatory actions (‘PDUFA’ dates) on major new products, with a large portion of total risks being concentrated in the days

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The Bull Case for SNY’s Diabetes Franchise

2017 consensus for SNY’s US basal insulins fell from $9.9B to $7.5B after the company warned 2015 sales growth would be flat, citing price competition. We believe estimates have fallen too far, and imply an unstable pricing environment with significant

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Relative Price & Value of pre-Phase III Pipelines for the 23 Largest Drug & Biotech Companies – Updated View

We use patent data to estimate the amount and quality of innovation in companies’ pre-phase III (aka ‘hidden’ pipelines); we then determine whether companies’ share prices accurately reflect what’s in these hidden pipelines.  Since inception (November 2012), companies that screen

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Hold-Out States Will Expand Medicaid – Just Ask History

The original Medicaid program was passed in ’65, going into effect in ’66 – and only 26 states joined the program in that first year. By 1970 all but Alaska and Arizona had joined; Alaska held out until ’72, Arizona

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SCOTUS Round II: Does King Really Matter?

The Supreme Court of the United States (SCOTUS) will hear arguments in King v. Burwell, in February or March of 2015, with a ruling likely in June of 2015. A decision to uphold King would mean persons buying health insurance

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What Healthcare Stocks’ Share Prices Imply about Future Growth, and How this Squares (or not) with Fundamentals

Hospitals are benefiting from rising patient flows and reduced costs for uncompensated care; however as insured patients move to cheaper forms of coverage they owe larger percentages of hospital bills, which they often don’t pay. Thus Hospitals’ net pricing is

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SSR Health New Product Approval Portfolios & Supporting Data Update

Drug, biotech, and research-based spec pharma stocks tend to outperform their peers in the year or so before and after regulatory actions (‘PDUFA’ dates) on major new products, with a large portion of total risks being concentrated in the days

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WAG/RAD: Pressure on generic dispensing margins likely to be much more permanent than guidance implies

WAG & RAD both recently lowered guidance; both blame falling generic dispensing margins. In each case the companies point to pressures on both sides of the margin equation – rising generic acquisition costs, paired with lower-than-expected reimbursement Unravelling the relative

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