The latest Market Talks covering the Health Care sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1121 ET - Organigram's roughly C$561 million offer for Canadian cannabis company Aurora Cannabis fends off a hostile bid from rival Curaleaf, marking a new turn in Aurora's buyout saga. At C$7.80 a share, the agreed cash-and-stock deal offers a 21% premium over Curaleaf's unsolicited C$6.45 bid and a 93% premium over Aurora's unaffected price in August. The transaction is backed by a GBP100 million commitment from British American Tobacco and a C$210 million credit facility. Organigram touts the combination as supporting critical scale across major Canadian and European markets. Meanwhile, Aurora said the deal provides an immediate valuation benefit while blocking a disruptive takeover battle that has played out since August. Aurora shares rise 20% to C$7.08. (adriano.marchese@wsj.com)
0937 ET - AstraZeneca is due to release results of several late-stage clinical trials over the next two years that could help address investor worries about its growth prospects in the 2030s, Bernstein analysts say in a research note. Consensus estimates on the U.K. drugmaker point to consensus revenue declines between 2033 and 2037, which Bernstein considers extreme. AstraZeneca is due to report first-time late-stage results for six new drugs in 2027 that collectively have potential to generate between $25 billion and $30 billion in annual peak sales, according to Bernstein. In 2028, the first late-stage results for four new drugs should follow, which could unlock more than $20 billion in potential annual peak sales, the analysts say. Shares fall 0.1%. (adria.calatayud@wsj.com)
0907 ET - Bayer raised its full-year guidance, but the increase seems to reflect the margin by which its third-quarter earnings beat expectations, analysts at Jefferies write in a note to clients. A strong performance in the German company's pharmaceutical division drove group-level adjusted Ebitda to exceed consensus estimates by 14%, or 200 million euros, the analysts say. This could be the result of one-off items, as the group's quarterly core EPS missed expectations, they add. Since Bayer raised its full-year adjusted Ebitda guidance by 200 million euros, it seems like it only took the size of its third-quarter beat forward into the full year, according to Jefferies. Shares rise 6.6%. (adria.calatayud@wsj.com)
0850 ET - Declining sales for Pfizer's Covid-19 products continue to weigh on the company's results. The drug and vaccine maker says sales of Paxlovid slid 63% in 3Q on lower Covid-19 infections across the U.S. and internationally, while Comirnaty sales fell 29%, driven in part by lower utilization in the U.S. due to narrower vaccine recommendations. The company has been working to offset that pressure by developing and acquiring new products.(kelly.cloonan@wsj.com)
0843 ET - Pfizer continues to get a boost from its blood thinner Eliquis. Sales of the product gained 25% in 3Q, driven by higher prices in the U.S., as well as higher demand globally, the company says. Pfizer is bracing to lose patent protection for Eliquis. (kelly.cloonan@wsj.com)
0833 ET - Pfizer says its bet on new products is paying off. In 3Q, revenues of its recently-launched and acquired products grew 32%. Those products include bladder-cancer treatments Padcev, which it acquired, and metastatic non-small cell lung cancer drug Lorbrena, which it developed. Pfizer has been working to develop new medicines and buy other treatments, including weight-loss drugs, as it contends with plummeting demand for its Covid products. (kelly.cloonan@wsj.com)
0511 ET - Investor expectations are high for Sonova, UBS analysts write, cutting their rating on the Swiss maker of hearing aids to neutral from buy. Sonova's fundamentals look good, helped by recovery in the U.S. market and a strong platform, priming the company to lift its earnings guidance, UBS says. "[But] we feel these upgrades are somewhat priced in, meaning we see limited upside for now," the bank says. UBS raises its target price on the stock to 293 Swiss francs from 273 francs. Shares trade 3% lower at 276.4 francs. (joshua.kirby@wsj.com; @joshualeokirbyv)
0332 ET - Philips' third-quarter margin result was a positive, as it helps allay concerns about full-year delivery, according to Natalia Webster at RBC Capital Markets. This will likely offset the Dutch health-technology company's less impressive diagnostics and treatment sales growth, though these factors will be front of mind for investors, she adds. Alongside this, investors and analysts will be focused on updates around the U.S. consent decree process, she adds. Shares rise 6.6%. (aimee.look@wsj.com)
0325 ET - Convatec's appointment of Jill McConnell as its new finance chief provides an orderly transition following the previously announced departure of Fiona Ryder, Bernstein's analysts write. McConnell has more than 25 years of finance leadership experience across healthcare and life sciences, especially in the U.S., according to the global medical products and technologies company. "Ms. McConnell's combination of public-company CFO experience, healthcare expertise and significant U.S. exposure appears well aligned with Convatec's current priorities and the next phase of its Accelerate strategy," the analysts say. Bernstein has an outperform rating on the stock and 280 pence target price. Shares are down 1.7% at 241.40 pence. (ian.walker@wsj.com)
0320 ET - Lonza Group's agreement to buy the U.S. contract-drug-manufacturing network from Germany's Merck marks a strategic expansion into the U.S. at a modest valuation, Stifel's Ed Hall says in a research note. The Swiss contract drug manufacturer said the deal was based on a valuation, including debt, in the low- to mid-triple-digit Swiss-franc range. Stifel interprets this as meaning between 300 million francs and 400 million francs, which would give the deal an attractive valuation for Lonza. "Merck paid approximately $780 million for [the acquisition of] Exelead alone in 2022, suggesting an attractive valuation reset for the broader network, although returns depend on utilization and incremental investment," the analyst says. Lonza shares fall 0.3%, while Merck's drop 1.3%. (adria.calatayud@wsj.com)
0303 ET - Bayer shares are likely to react positively to the German agricultural and pharmaceutical group's third-quarter results, analysts at J.P. Morgan say in a research note. The company lifted its underlying Ebitda guidance due to a better-than-expected performance in its pharma division, and its new outlook points to upgrades to consensus expectations, the analysts say. Moreover, both sales and underlying Ebitda for the third quarter exceeded consensus expectations. "Overall, we expect the results to be well received given the pharma-driven Ebitda beat and guidance raise, and expect the shares to outperform today by 2-3%," they add. (adria.calatayud@wsj.com)
0259 ET - Fresenius Medical Care's third-quarter earnings beat analysts' expectations, but the German dialysis specialist's U.S. treatment volumes continue to decline, analysts at J.P. Morgan write in a research note. The company narrowed its adjusted earnings guidance to the lower end of its previous range, but this still implies upgrades to consensus expectations of a 7% decline, the analysts say. "We see the shares up initially on the beat but likely to continue to drift from here," JPM says. With U.S. same-market treatment volume trends worsening to a 1.1% fall from a 0.9% decline the prior quarter and earnings likely to contract for the next three quarters, Fresenius Medical Care's shares look set to face renewed pressure, the analysts add. Shares closed at 40.50 euros on Monday.
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