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Health Care Roundup: Market Talk

22 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.

0021 GMT - ImpediMed's shares are up 27% so far this month as investors warm to the growth outlook for its Sozo bioimpedance spectroscopy-based device, which allows monitoring of heart-failure patients at home. Morgans points to technical charts showing the relative strength index indicator has entered bull-market range, increasing its confidence that the stock is at a turning point. "A break above resistance of A$0.85 is highly likely with initial upside price target of A$1.00," Morgans says. A mild pull back could happen in the short term and if it does then A$0.70 would provide a good buying opportunity, the broker adds. ImpediMed is at A$0.79 early in Asia on Friday. (david.winning@wsj.com; @dwinningWSJ)

2354 GMT - Today could be the day that Australia's S&P/ASX 200 breaks below the support levels of recent months, although CMC Markets says it's still not an obvious call. Chief market analyst Ric Spooner says markets have lately turned a blind eye to tensions on the Korean peninsula. He also says bad news for mining investors on metals prices may be partly offset by Rio Tinto's new share buyback program, and a weaker AUD should also help miners and other major stocks including CSL. Most interesting to Spooner, the banks, while not compellingly cheap, have returned to levels that could prove attractive enough at a time of shallow range-trading. (robb.stewart@wsj.com; @RobbMStewart)

2220 GMT - A Pennsylvania county just outside of Philadelphia becomes the latest government entity to sue makers of opioid painkillers, alleging they helped cause widespread addiction by misleading the public about the drugs' benefits and addictive risks. Delaware County's lawsuit, filed in Delaware County Court of Common Pleas, targets Purdue Pharma, Johnson & Johnson and units of Teva and Endo--the same defendants that more than a half-dozen states, and a number of cities and counties, have recently sued over similar allegations. The lawsuit also lists as defendants three physicians, alleging they were "instrumental" in the alleged effort to mislead the public. One law firm representing the county, Simmons Hanly Conroy, has already filed similar lawsuits for a number of New York counties. (jeanne.whalen@wsj.com)

2215 GMT - ADRs in Ascendis Pharma rocket 43% to $39.75 after hours on the news that a drug being developed by competitor Versartis failed to show superiority to Pfizer's Genotropin growth hormone in clinical trials. Copenhagen-based biopharmaceutical company Ascendis develops its own version of the growth hormone called TransCon. Versartis falls 84% to $3.55 after the bell. (imani.moise@wsj.com; @moisenoise)

1619 GMT - Shares of drugmaker Intercept Pharmaceuticals are down 9% after the FDA issues a safety alert warning of an increased risk of serious liver injury and death in certain patients taking the company's liver-disease drug Ocaliva. FDA says some patients who already have moderate to severe liver-function impairment are getting excessive doses of the drug. FDA cautions doctors to start such patients on lower doses. The FDA alert comes a week after ICPT sent a letter to doctors alerting them to the safety risk, but Leerink notes that the FDA's alert could signal the agency will impose restrictions on use of the drug that are more severe than investors previously thought. (peter.loftus@wsj.com; @Loftus)

1525 GMT - The merger of Luxottica and Essilor has a 80% probability of success, RBC Capital Markets estimates as it downgrades the Italian eyewear maker to underperform from sector perform. The deal has "sound strategic rationale," analysts say, but, since it appears to be the result of lower growth outlook for the eyewear market and a more competitive business environment, it seems defensive. The revised target price of EUR47 per share, down from EUR55, reflects a shift from a stand-alone to a deal-based valuation. Shares of Luxottica trade 1.2% down at EUR47.01. (pietro.lombardi@dowjones.com; @pietrolombard10)

1311 GMT - The long-flagged notes issued by Nidda, the new indirect parent of Stada Arzneimittel after its private equity buyout, are set to price Friday, with the seven-year note's size boosted by EUR250 million to EUR735 million. An equal amount is taken off the euro loan done as part of Stada's buyout. The eight-year note second-lien note remains at EUR340 million. The notes' terms have attracted some criticism, with Covenant Review, an independent credit research firm, listing several concerns, including weak restricted payments covenants. (tasos.vossos@wsj.com, @tasosvos)

1000 GMT - Panmure Gordon lowers the target price of Venture Life to 87 pence from 128p after it reported 1H earnings. The investment bank said that while the company's revenue is broadly in line with expectations, profitability is not. Full-year Ebitda was forecast in the region of GBP2.1 million, Panmure said, but now management is guiding for GBP1.2 million. With its UltraDEX product taking longer than expected to deliver, the investment bank said it expects margin expansion for 2017 and 2018 to stay flat at 37%, rather than reaching somewhere in the lower 40% range as previously modeled. Shares trade down 8p, or 12%, at 57.50p. (carlo.martuscelli@dowjones.com)

0950 GMT - Jefferies has raised its price target for Roche to CHF290, from CHF275, citing high expectations from a string of new or soon-to-be-launched drugs. The bank believes these drugs - Tecentriq, a cancer immunotherapy, Ocrevus for multiple sclerosis, Gazyva for certain blood cancers, ACE910 for hemophilia and Perjeta for breast cancer - will generate annual revenue of CHF21.3 billion by 2021. That will more than offset the revenue lost as lower-cost competitors to Roche's current bestsellers Herceptin, Rituxan, Avastin and Lucentis over the next few years. Jefferies expects Roche's revenue and earnings per share to increase an average of 5.5% and 7.7% each year to 2021. Roche shares trade up 0.7% at CHF248.80.(denise.roland@wsj.com ; @deniseroland)

0920 GMT - Sanofi and Alnylam's positive topline results for the Phase III trial of Patisiran is good, though not transformative news for Sanofi, according to analysts at Bryan Garnier. In a joint release, the two companies said that Patisiran reached all its primary and secondary endpoints and that they will file for approval in the U.S. in late 2017 and in Europe in early 2018. If approved, Sanofi will commercialize Patisiran in Europe. Bryan Garnier's fair value for Sanofi remains unchanged as it believes the positive news is offset by adverse moves in currencies and the share price of Regeneron, in which Sanofi holds a significant stake. Shares trade up 2% at EUR83.92. (sonia.amaralrohter@dowjones.com)

0919 GMT - Hannover Re is probably being conservative in its outlook update, says UBS. "Consensus won't move too much given Hannover Re's typically conservative nature," the bank says after the reinsurer issued a profit warning related to recent natural disasters. The bank estimates EUR380 million in net losses post retrocession, a practice among reinsurers in which one insures the activities of another. No clear picture of potential industry losses has yet emerged from company updates, the bank says, citing the mixed messages given so far. UBS reiterates its buy recommendation and EUR109 target price for Hannover Re. Shares trade at EUR100.3, down 0.1%. (marc.bisbalarias@dowjones.com; @bamarc)

0824 GMT - Indian generic drug maker Dr. Reddy's Laboratories jumps 5% to a near 2-month high, after the company gets an established inspection report from the US Food and Drug Administration for one of its manufacturing plants in south India, a stamp of approval. The US drug regulator did the audit of the same plant in May. The stock also got a further boost as Morgan Stanley upgrades it to an overweight from equalweight. Valuation also appears attractive as the stock is down about 20% this year. The investment bank expects sharp earnings recovery in fiscal 2019 and 2020, driven by key product launches in the US over the next 4-8 quarters. (debiprasad.nayak@wsj.com)

(END) Dow Jones Newswires

September 22, 2017 04:20 ET (08:20 GMT)

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