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Health Care Roundup: Market Talk

16 Sep 2017 8:20 am

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.

1800 GMT - California Senate passes a bill that would require drug companies to give customers 60-day advance notice of any plan to boost the price of a prescription drug costing more than $40 by 16% in a 2-year period. Bill would require companies to report information justifying price hikes to a state agency, and require health insurers to report the portion of customers' premiums that is spent on prescription drugs. Bill awaits further action by Gov Jerry Brown. Industry trade group PhRMA opposes the bill, as it has done in other states. Vermont, Maryland and Nevada have enacted laws aimed at various aspects of drug pricing. Wells Fargo says the state efforts "are a potentially underappreciated threat to the drug industry," and the California bill it could lead to copycat legislation. (peter.loftus@wsj.com; @Loftus)

1639 GMT - Belgian stocks close down 0.5% at 3967.52 in line with lower European equity indices. Of the three Belgian stocks suffering the biggest losses, financial services provider ING drops 1.3% followed by beverage giant AB InBev, which dips 1.2%. Meanwhile on the upside, pharmaceuticals company UCB rises 1.9% followed by hygiene product manufacturer Ontex, which bounces 0.9%. (julia.verlaine@wsj.com)

1551 GMT - Shares in US liver disease drug group Intercept Pharmaceuticals rise 8% after RBC Capital Markets starts covering the US liver-disease drug group with an outperform rating and a $244 price target. RBC says prospects for Intercept's flagship drug Ocaliva in cholestatic liver disease are under-appreciated and the drug's long-term potential in nonalcoholic steato-hepatitis, or NASH, could be substantial. "Even baking in some clinical, commercial, and competitive risks in NASH, ICPT shares appear meaningfully under-valued to us," RBC says. Intercept rises 6.8% to $93.05. (philip.waller@wsj.com)

1531 GMT - The first copycat version of Roche's breast-cancer drug Herceptin appears on the horizon in Europe. A committee of the European Medicines Agency recommends approval of Samsung Bioepis' Ontruzant biosimilar version of Herceptin, which Samsung hopes will capture some of the $2B in annual Herceptin sales in Europe. Merck will commercialize the Samsung biosimilar in Europe if it receives final European Commission marketing approval. Bernstein says Roche is prepared for the competition because it has shifted many patients to a different formulation of the branded drug that might be more convenient to patients than the biosimilar, and the company has paired Herceptin with a newer drug, Perjeta, which could help sustain Herceptin sales. (peter.loftus@wsj.com; @Loftus)

1309 GMT - Nidda BondCo, the new indirect parent of Stada Arzneimittel after its private equity buyout, adds some CCC paper in the European high yield market with two long-flagged bond tranches amounting to EUR825 million. This is split into EUR485 million of first lien and EUR340 million of second lien notes, both rated Caa1 by Moody's. The saga of the Bain Capital/Cinven buyout has dogged bond investors in Stada throughout the year. Another private equity firm, CVC Capital Partners, tried to buy the German pharmaceutical in 2016. (tasos.vossos@wsj.com, @tasosvos)

1254 GMT - European shares lose ground as the euro rises against the dollar and the European Central Bank makes modestly hawkish comments about eurozone monetary policy. The Stoxx Europe 600 falls 0.3%, or 1.2 points, to 380.59 as the euro rises 0.45% against the dollar to $1.1973. The euro followed the pound after normally dovish Bank of England policymaker Gertjan Vlieghe added to Thursday's unexpectedly hawkish comments from the Bank of England on a possible interest rate hike. The European Central Bank's Sabine Lautenschlaeger weighed in by saying the ECB needs to think about "how to bring our unconventional measures to an end." Retailers do well again after Thursday's upbeat interim results from Next PLC, with H&M Hennes & Mauritz AB up 2%. Spanish biotech group Grifols SA falls 3.5% after Kepler Cheuvreux cuts it to hold. (philip.waller@wsj.com)

1247 GMT - Galapagos NV is developing treatments with blockbuster potential but also high risks, RBC Capital Markets says as it initiates coverage on the Belgian drug company with a hold. RBC says sales of Galapagos's potential treatment for rheumatoid arthritis and Crohn's Disease, filgotinib, could hit $4.5 billion by 2026. Still, the Canadian brokerage notes that U.S. regulators have set relatively high safety standards for the drug and more development work may be needed if infectious, renal or other medical imbalances emerge. "Regulators could steer labeling towards the lower, possibly less efficacious/competitive 100mg dose," RBC adds. Shares in Galapagos fall 1.9% to EUR84.93. (philip.waller@wsj.com)

0904 GMT - Equinet expects a slight positive share-price reaction to the FDA's approval of Bayer AG's (BAYN.XE) cancer drug Copanlisib. The brokerage expects peak sales of EUR100 million for Copanlisib when it is used as a treatment for patients with refractory follicular lymphoma. Equinet anticipates mild relief in the market due to recent pipeline setbacks at Bayer. These setbacks include lung-cancer drug Anetumab ravtansine--developed by Bayer HealthCare, ImmunoGen and MorphoSys--not meeting its primary endpoint in a Phase II trial. Equinet rates Bayer a buy with a target price of EUR118. Shares trade 0.6% lower at EUR111.20. (marc.navarrogonzalez@dowjones.com)

0857 GMT - Generic-drug maker Dr. Reddy's (500124.BY) is the worst-performing Sensex stock after Indivior (INDV.LN) sues 6 competitors--including the Indian firm--for alleged patent infringement regarding copies of Suboxone oral film. Indivior earlier this month lost another US patent case regarding it against Dr. Reddy's. Suboxone is used to treat opioid dependence. Investors are also nervous as the US is the largest market for Indian generic-drug makers. Shares are down 1.6%, cutting the week's gain to 2.6%. (debiprasad.nayak@wsj.com)

0842 GMT - Berenberg downgrades Spire Healthcare Group PLC (SPI.LN) to a hold rating from buy and lowers its target price to 300 pence from 390 pence following the release of the company's first-half financial results on Thursday. The broker says that weakness in incoming revenue from the NHS in July and August--a trend that shows no sign of abating--means that it is lowering Spire's revenue expectations for 2017 to flat and it expects a 5% contraction of second-half earnings before interest, tax, depreciation and amortization. Uncertainty around the private-healthcare provider accounts for the downgrade, Berenberg says. Shares are trading down 3.7%, or 9.4 pence, at 242.8 pence. (carlo.martuscelli@dowjones.com)

(END) Dow Jones Newswires

September 16, 2017 04:20 ET (08:20 GMT)

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