Healthcare Roundup – CVS raised as Jefferies sees meaningful earning surprises; SoftBank takes stake in Pacific Biosciences

医疗保健精选——杰富瑞上调CVS药店的目标股价,软银入股生物科技公司Pacific Biosciences
Published on: January 9, 2021
Author: Amy Liu

CVS raised as Jefferies sees meaningful earning surprises ahead of vaccine-driven boost

Jefferies analyst Brian Tanquilut has upgraded CVS Health (CVS +1.4%) shares to ‘Buy’ from ‘Hold’ ahead of COVID-19 vaccine-driven boost that will boost near-term earnings. Raise priced target from $66 to $90.

The analyst believes CVS’ role in the government’s COVID vaccination efforts could yield ~$1B in incremental gross profits over the one year, translating to meaningful EPS surprises and stock upside.

The government’s retail pharmacy-centric mass vaccination strategy should provide a solid tailwind for the pharmacy space, and CVS, with its ~25% market share, is best- positioned to benefit.

In addition, anticipated strong FCF should allow CVS to get its leverage ratio back down to target levels (~3x) this year, opening the door for share buybacks to resume in late 2021.

The company started administration of COVID-19 shots to the residents of long-term care facilities, in December.

Also Eli Lilly recruited CVS to administer its COVID-19 treatment bamlanivimab to patients in nursing homes and long-term care facilities.

Q3 earnings for the came in above expectations.

Both Wall Street and SA Authors ratings for the stock stands at ‘Bullish’ while Quant rating is ‘Neutral’.

SoftBank takes stake in Pacific Biosciences – Bloomberg

SoftBank (OTCPK:SFTBY) has reportedly amassed a stake of roughly 6% in Pacific Biosciences of California (NASDAQ:PACB), Bloomberg reports.

The interest, currently worth over $350M, underscores the fast-expanding portfolio of public equity investments by the Japanese conglomerate’s asset management business SB Northstar.

In November, the company announced a public offering of $87M priced at $14.25/share.

Last year, the company was blocked by U.S. antitrust enforcers from merging with Illumina in a $1.1B deal.

PACB shares rose as much as 12% on the news before trading was halted.

FDA lists Applied DNA Sciences’s COVID-19 test capable to detect highly transmissible new variant of coronavirus

Applied DNA Sciences rockets (APDN +67.1%) after the FDA identifies company’s Linea COVID-19 assay kit as one of only two tests marketed under the FDA’s Emergency Use Authorization (EUA) that are potentially able to identify certain SARS-CoV-2 mutations, including a mutation found in the U.K. variant of SARS-CoV-2 (B.1.1.7) variant.

Based on analysis conducted by the Company and FDA, one of the two S-gene targets (S1 and S2) of the Assay Kit has significantly reduced sensitivity in the presence of certain S-gene mutations, including a mutation found in the B.1.1.7 variant.

Linea COVID-19 assay kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, in May last year.

Supreme Cannabis expands international medical cannabis shipments

Supreme Cannabis (OTCQX:SPRWF +1.0%) announces first shipment of medical cannabis to Australia in a private label transaction, medical cannabis will be sold in 10-gram containers and will be distributed to patients across the country.

According to FreshLeaf Analytics’ Australian Medicinal Cannabis Market Patient and Pricing Analysis for Q3 2020, the Australian medical cannabis market is expected to triple with regards to active patients and product sales measured by revenue.

Additionally, Supreme Cannabis also completed its fourth shipment of calendar 2020 to Israel through its partnership with Breath of Life International Ltd.

“We are impressed by the significant growth of the Australian medical cannabis market and we look forward to opportunities to expand our Australian partnership and help more Australian patients in 2021,” commented said Beena Goldenberg, President and CEO.

Eli Lilly collaborates with Blacksmith Medicines in a deal worth $300M

Blacksmith Medicines, Inc. announces that it has entered into a research collaboration with Eli Lilly and Company (NYSE:LLY) with an estimated total potential deal size up to ~$300M.

Under the terms of the agreement, Blacksmith and Lilly will collaborate on up to 5 human metalloenzyme targets, with Lilly having the right to continue research, development, and commercialization. Blacksmith will advance the small molecule inhibitors from ‘fragment to ‘hit’ stage.’

Blacksmith will receive an upfront payment and an investment from Lilly in exchange for a convertible note, and ~$60M per target in milestone payments for a total potential deal size up to ~$300M.

Using its drug discovery engine, metalloenzyme platform, Blacksmith Medicines focuses on developing medicines to target metal-dependent enzymes found in human physiology.

With over 30% of known enzymes being metalloenzymes, covering all major enzyme classes, the Blacksmith notes a large unmet need for new chemical matter and innovative approaches in the space.

Biotechnology COVID-19 Life Science Medical Device Pharmaceutical