JPM Health Meeting 2023 has lauched since Jan.9, it will last 4 days this year, with almost all big biopharmeutical companies attending. In the first day, managers from $Johnson & Johnson(JNJ)$, $Pfizer(PFE)$, $Novartis AG(NVS)$, $Eli Lilly and(LLY)$, $Moderna, Inc.(MRNA)$ etc has shared with investors.
See some abstracts (in Chinese)
JPM's medical conference is held once a year, and pharmaceutical companies will discuss some situations of the company and their views on the development of the industry, investors can also find some industry investment information.
At the conference, companies usually talk about their strengths and latest research. For example, Pfizer and Moderna vaccines against COVID-19 in 2022,$Illumina(ILMN)$ Chemistry X breakthrough chemical technology, $Gilead Sciences(GILD)$Long-acting HIV prevention drugs and so on.
Is healthcare sector a good investment in 2023?
Health care is also one of the promising industries in 2023, because it is expected to outperform this year after falling behind the benchmark for three consecutive years$S&P 500(.SPX)$Index. In the recovery cycle, the recovery speed of the health care industry exceeds the broader market recovery, which is often the precedent of a long-term, multi-year bull market.
However, in 2023, there will be obvious differentiation within the pharmaceutical sector.
Big pharmaceutical companies,$Pfizer(PFE)$$Eli Lilly and(LLY)$$Johnson & Johnson(JNJ)$$AbbVie(ABBV)$And so on, there is a certain degree of callback,$Amgen(AMGN)$$Biogen(BIIB)$$Gilead Sciences(GILD)$To a certain extent.
Companies associated with health care plans, such as insurance companies$UnitedHealth(UNH)$Pharmacy$CVS Health(CVS)$Medical service company$Elevance Health(ELV)$And so on, there is obvious retracement, and the risk aversion of funds is weakened;
Companies related to medical devices, such as$Medtronic PLC(MDT)$,$Stryker(SYK)$And so on, they perform better. While other sectors, such as biotechnology and medical services, are generally bullish.
The differentiation of funds within the medical sector is also due to the different hedging attributes it represents. Medical services, medical insurance, large pharmaceutical companies and pharmacies have more defensive attributes; Biotechnology and medical devices are generally loved by investors with high risk appetite. The overall risk appetite is starting to pick up because the Fed may have a policy view after the market is priced into a possible recession this year.
From the valuation point of view, the current average price-earnings ratio of pharmaceutical and biotechnology companies is 113 times, but it is mainly affected by some small medical enterprises. It is expected that the average price-earnings ratio in 2023 will be about 28 times, and most large pharmaceutical companies are lower than this level. The average EV/EBITDA in the past 12 months was 22.6 times.
As for return, in the last year $Novo-Nordisk A/S(NVO)$,$Eli Lilly and(LLY)$,$Merck(MRK)$,$AstraZeneca PLC(AZN)$The price return exceeds 30%.
In addition, at the financial level, hedge funds have started to "significantly increase their holdings" of healthcare stocks through managed healthcare stocks. Their allocation of large biotech stocks and selected pharmaceutical stocks also shows a recent increase.
Let's see the cash flow of Health care ETF, the net inflow of ETF is also greater than the net outflow recently, and XBI got 258 million USD over the month.
For 2023, we also could pay attention to some key topic of pharmeutical companies.
- Obesity, $Novo-Nordisk A/S(NVO)$And$Eli Lilly and(LLY)$Will lead the weight loss treatment market, and Lilly's experimental weight loss treatment tirzpatide will gain a good market share, while$Amgen(AMGN)$Weight loss therapy AMG 133 has also been released.
- Alzheimer:$Biogen(BIIB)$lecanemab;, a new therapy for Alzheimer's disease;
- COVID-19 and Influenza: Concern$Pfizer(PFE)$Paxlovid and$Merck(MRK)$Increment in the private drug market;
- Biogeneric drug market: a heavy concern is$AbbVie(ABBV)$Humira will lose its exclusive patent in the United States next year;
- Medical technology market: The income and profit rate forecasts of most medical technology enterprises have been adjusted to a reasonable level,$Intuitive Surgical(ISRG)$$Abbott Laboratories(ABT)$$Becton Dickinson(BDX)$Etc
- Healthcare: As one of the safe haven sectors, it is also the industry that normalized the amount of medical procedures after COVID. Such as$CVS Health(CVS)$$UnitedHealth(UNH)$
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