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Health Care Roundup: Market Talk

12 May 2018 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.

1826 GMT - Shares of drugmakers and pharmaceutical companies briefly tumbled, then bounced higher, as President Donald Trump delivered an address at the White House calling for lower drug prices. Within a 30-minute window, Express Scripts fell as much as 4.4% to $67.85 before erasing losses to trade up 1.5%. CVS Health was also recently up 1.8% after falling as much as 2.5%, while Walgreens Boots was up 0.1% after falling as much as 1.8%. (akane.otani@wsj.com; @akaneotani)

1418 GMT - Chicken suppliers say they're continuing to scale down use of antibiotics to keep their flocks healthy, in response to fears that widely using those drugs can help develop antibiotic-resistant bacteria -- but those efforts are constraining meat supplies. Pilgrim's Pride CEO Bill Lovette says the second-largest chicken supplier expects 50% of its poultry production will be raised without any antibiotics at all in the next few years, up from prior targets, but says that reducing antibiotics has meant higher mortality and lower growth rates. "It does apply a damper on supply growth," he says. (jacob.bunge@wsj.com; @jacobbunge)

1340 GMT - AstraZeneca's failed Fasenra COPD drug trial doesn't necessarily spell the end of the road for a possible treatment, says Shore Capital's Adam Barker. Investors will want to wait for a breakdown of the data by eosinophil count, as there's a possibility that while the trial failed overall, the drug trended towards a statistically meaningful effect in patients with a higher count of the white blood cells associated with COPD exacerbations. Mr. Barker says that in a GlaxoSmithKline study of a COPD treatment the trial produced mixed results but achieved a statistically significant reduction in exacerbation in high eosinophil count patients, enough to attempt an FDA submission. Astra awaits data for its other Fasenra COPD trial, Terranova. (carlo.martuscelli@dowjones.com)

1008 GMT - Merck KGaA's pipeline drug Tepotinib, currently being tested for lung and liver cancer, is the "one to watch," says Wimal Kapadia of Bernstein as 1Q results roll in next week. Especially noteworthy is the focus on the METex14 mutation population--about 13,000 patients--in the non-small cell lung-cancer group. With no specific METex14-specific approved therapies available yet, Merck's approach is "smart," says Mr. Kapadia. His METex14 market model assumes a 2021 launch with 2030 sales of EUR530 million. Novartis's Capmatinib and Pfizer's Xalkori should be the main competitors. Shares are down 1.1% at EUR82.44. (donatopaolo.mancini@dowjones.com; @donatopmancini)

0954 GMT - Berenberg says that Smith & Nephew's new CEO Namal Nawana has to improve commercial execution if the company is to restore revenue growth, after first-quarter sales and a reduced 2018 outlook "brought expectations back to earth." The brokerage says the new CEO will also have to decide whether to persevere with some of the underperforming business lines or look at rationalizing the portfolio. Berenberg regards the sale of an entire unit as unlikely, although it says that in its view certain units are not such an obvious fit with the rest of the business lines. Shares down 0.2% at 1305 pence. (dimitrios.kontos@dowjones.com)

0946 GMT - Barclays says it has more than doubled its previous estimates for the value of AstraZeneca's Lokelma, a drug for the treatment of hyperkalemia. Barclays now values its worth at 309 pence per share. The bank says that--once the long-awaited U.S. FDA approval is secured--the drug represents a blockbuster opportunity for the Anglo-Swedish pharmaceutical major. This, along with foreign-exchange tailwinds, drives a 3% increase to AstraZeneca's target price, which is raised to GBP65 from GBP63. The bank says AstraZeneca remains its top pick in EU pharma. (carlo.martuscelli@dowjones.com)

0850 GMT - Roche's negative colorectal cancer trial results for Tecentriq prevent it from accessing a market worth as much as $2 billion, JP Morgan Cazenove says, but that shouldn't change overall consensus. The setback was expected given bad phase 1 data that was already known, and the bank had estimated total sales of Tecentriq for about CHF4 billion in 2021, with only CHF365 million of that for CRC, calculated with a cautious 30% share of market opportunity and a 50% chance of success. JPM says consensus is largely underpinned by other trials and applications. Roche shares trade down 1.8% at CHF222.00. (donatopaolo.mancini@dowjones.com; @donatopmancini)

(END) Dow Jones Newswires

May 12, 2018 04:20 ET (08:20 GMT)

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