Today's Must Read
AbbVie's (ABBV) Humira Blossoms in a Crowded Space
Biogen's (BIIB) Multiple Sclerosis Products Face Competition
Wednesday, November 29, 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Amazon (AMZN), AbbVie (ABBV) and Biogen (BIIB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Amazon’s shares have outperformed the broader market in the year-to-date period (the stock is up +59.2% vs. the +17.7% gain for the S&P 500 as a whole). Amazon is benefiting from strong growth in all its businesses and especially the retail business remains very hard to beat on price, choice and convenience.
The Zacks analyst likes Amazon’s solid loyalty system, Prime. Its FBA strategy and content additions continue to add selection to Prime memberships. AWS generates much higher margins than retail, thus significantly impacting Amazon’s profitability. Devices and IoT are also potential growth areas.
However, increased operating expenses to support expansion of its business into new markets and territories, localize the availability of products and grow its content will keep margins under pressure.
Shares of AbbVie have gained +52.4% year to date, outperforming the Zacks Large Cap Pharmaceuticals industry, which has gained +16.2% over the same period. AbbVie’s key drug Humira has been performing well. At the Q3 earnings call, AbbVie raised its long-term target for Humira sales based on strong demand trends for the drug, despite new competition.
Moreover, Imbruvica has multibillion dollar potential and AbbVie is exploring the possibility of label expansion into solid tumors and autoimmune diseases. Meanwhile, the past 2-3 months have been strong for the company as it presented promising data from several pivotal studies and gained regulatory approvals in the U.S., Europe, and Japan for its competitive HCV medicine Mavyret.
Additionally, it gained FDA approval for the sixth indication for Imbrivica and settled its Humira patent disputes with Amgen. Also, several pivotal data readouts and regulatory milestones are expected in 2018. However, HCV sales continue to be hurt by intensifying competition.
Biogen's shares have outperformed the Zacks Biomedicals/Genetics industry in the last six months (+28.6% vs. +2.3%). Biogen has a strong position in the MS market with a wide range of products including Avonex, Tysabri, Tecfidera & Plegridy. The Zacks analyst also likes Biogen’s efforts to diversify beyond MS to other areas like Alzheimer's, Parkinson's, stroke, among others.
Meanwhile, Spinraza has witnessed strong patient uptake in the U.S. and internationally. However, weakening MS trends is a concern. Tecfidera is witnessing slight decline in U.S. patient demand due to increasing competition from oral medicines and a slowdown in the overall MS market.
The recent Ocrevus launch by Roche is beginning to have a negative impact on MS franchise sales in the U.S., mainly Tysabri. At the call, the company said that seasonality and continued competitive pressure from Ocrevus’ launch will hurt the performance of its MS franchise in Q4.
Other noteworthy reports we are featuring today include McCormick (MKC), Helmerich & Payne (HP) and Hyatt (H).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>