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Biotech may see possible 15% ‘melt-up’: Leerink

June 24, 2017

Leerink analyst Geoffrey Porges sees a possible 15% melt up in Biotech names following Q2 and positive estimates as well as multiple expansion

He prefers the following high growth names under his large cap coverage that have Outperform ratings:

  • Regeneron (NASDAQ: REGN)
  • Celgene (NASDAQ: CELG)
  • Vertex Pharma (NASDAQ: VRTX)
  • Alexion Pharma (NASDAQ: ALXN)

He sees less upside in value names that he has Market Perform ratings on, such as:

  • AbbVie (NYSE: ABBV)
  • Amgen (NASDAQ: AMGN)\
  • Gilead Sciences (NASDAQ: GILD)
  • Biogen (NASDAQ: BIIB)

He comments “The current rally reflects the lifting of perceived fears of pricing regulations, and a favorable tone from the FDA, but does not yet reflect more positive operating results, not to mention industry consolidation which we still expect. Our thesis centered on achievable revenue and earnings numbers for Q2 and likely increases to guidance, positive regulatory activity, strong launches, and receding concerns about political risks to drug pricing. A month ago, large and mid cap biotech was still trading at discounted levels to tech and medtech, and valuations have definitely recovered in recent days but still remain below their longterm relative and absolute ranges.”


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