In a regulatory filing, Franklin Resources disclosed a 5.1% stake in Dynavax, which represents just over 3.15M shares. The filing does not allow for activism.
Friday, January 25, 2019
Report that CVS excluded Amgen’s Aimovig ‘greatly exaggerated,’ says Piper
Piper Jaffray analyst Christopher Raymond kept an Overweight rating and $220 price target on Amgen (AMGN) following a Reuters report from earlier on Friday which stated that CVS (CVS) has excluded Amgen’s Aimovig from its formulary. The analyst called the report “Friday afternoon clickbait” and noted that while CVS currently provides preferred status to Teva’s (TEVA) Ajovy and Eli Lilly’s (LLY) Emgality, this was made public in late 2018. In a check with management, Raymond found out the decision only encompasses about one-third of CVS network, that CVS is actively working to improve this access, and that 70% of commercial migraine patients have contracted access to Aimovig. Raymond concluded that this was “not something to worry about” in his view, and did not change his Q4, FY19, or FY20 estimates on Aimovig. In Friday trading, shares of Amgen were down just over 1% to $198.77.
Rejected Medical Marijuana Super Bowl Ad: ‘Cannabis Has Given Me My Life Back’
CBS Corporation CBS 0.41% has rejected a pro-cannabis legalization TV ad that Acreage Holdings ACRZF, a cannabis company that counts former House Speaker John Boehner and former Massachusetts Gov. Bill Weld among its advisors, intended to run during the Super Bowl.
CBS told Acreage’s the company “will not be accepting any ads for medical marijuana at this time,” according to an Acreage spokesperson.
A CBS spokesperson said marijuana-related ads do not meet the broadcaster’s standards, according to USA Today.
Check out the ad in the video below, which Acreage wanted to run during Super Bowl LIII on Feb. 3:
The PSA begins with a young man, Austin, who is suffering a seizure. “Austin would have dozens to hundreds of seizures every single day. None of the prescriptions would work,” says his mother, Amy Bourlon-Hilterban of Florence, Colorado. “One pill almost killed our son.”
The spot then moves on to Greg Kazmierczak, who says he used opioids for 15 years to treat his pain after a surgery, and to Ryan Miller, a military veteran who says he dealt with extreme pain after a leg amputation.
Bourlon-Hilterban says “medical cannabis saved Austin’s life,” followed by a few other testimonials about the medical potential of cannabis. “It’s not just unfair. It’s cruel,” she says, before the PSA concludes with a message for viewers to call their elected representatives to advocate for change.
Medical marijuana is legalized in 30 U.S. states.
Piper Sees Upside In Canopy Growth On Geographic, Product Expansion
Canopy Growth Corp CGC 9.7% kicked off 2019 with a 53-percent run. It hasn’t even begun to strike its high, according to one analyst team.
The Rating
Piper Jaffray analysts Michael Lavery and Jeffrey Kratky maintained an Overweight rating on Canopy Growth and raised their price target from $40 to $60.
The Thesis
Despite cutting ramp forecasts to more conservative rates, Piper Jaffray considers Canopy Growth well positioned in global cannabis — a market expanding into a $250 billion to $500 billion opportunity.
“We believe the long-term growth can be significant — both from transitioning illicit trade to legal sales, medical sales, and from transitioning sales in health and wellness categories to CBD-infused products,” Lavery and Kratky wrote in a note.
They expect Canopy Growth to rake in $15 billion to $50 billion near term, particularly given recent expansion both in geographic and consumer reach. Last week, the company penetratedthe blossoming U.S. market with a New York license. Management plans to invest $100 million to $150 million in a production and processing facility there.
“Canopy has hemp-specific IP, cash reserves, and technical expertise that should position it well in the US hemp and CBD market,” the analysts wrote. “Though we do not yet have more specifics on its plans, we believe this tangible step into the US is a clear positive and makes us more bullish on its outlook for sustainable growth.”
The firm also partnered with Greenhouse Juice Company to add cannabidiol-infused beverages to its portfolio. At the very least, the arrangement expands visibility in Canada.
Analysts Unfazed By Intuitive Surgical’s Higher Opex Guidance
Intuitive Surgical, Inc. ISRG 3.93% reported Thursday after the market close with higher fourth-quarter non-GAAP earnings per share — which fell short of expectations — and revenue that was slightly ahead of estimates.
The Analysts
- Morgan Stanley analyst David Lewis reiterated an Overweight rating and $620 price target for the shares of Intuitive Surgical.
- Piper Jaffray analyst JP McKim maintained an Overweight rating and $625 price target.
- RBC Capital Markets analyst Brandon Henry has a Sector Perform rating and $560 price target.
Morgan Stanley: Extra Spending To Generate Solid Returns
Underlying trends for Intuitive Surgical remain strong, with the company notching its fifth consecutive quarter of procedure momentum acceleration and more than 30-percent growth in gross system placement, Morgan Stanley’s Lewis said in a Friday note.
If a $25-million contribution to the Intuitive Foundation were excluded, Intuitive’s operating margins and EPS would have exceeded expectations, the analyst said.
The robotic surgical equipment manufacturer’s 2019 operating expense growth expectations of 20-28 percent are about 5 percent higher than Morgan Stanley’s expectation at the midpoint, Lewis said.
“While we are modestly raising our gross placement numbers in 2019 and 2020 to 1,108 and 1,184, our EPS estimates were reduced 5 percent and 4 percent, driven largely by additional investments.”
Piper Jaffray: Buy The Dip
Buying the dip in the stock after Intuitive’s Q4 2017 print would have generated a 12-month return of 89 percent, McKim said. Buying the dip after the Q4 print in 2018 would have brought a 22-percent return, he said.
McKim named the following reasons for buying the weakness in Intuitive stock after the quarterly report:
- The company’s guidance is conservative on all fronts.
- It’s at the beginning of two key product launches: SP and Ion.
- Above-average growth in Japan and China is likely.
RBC: Increased Spending To Help Expand Market
Intuitive Surgical’s momentum continued into Q4, Henry said in a note. To account for the increased guidance for operating expenses, RBC lowered its EPS estimates.
The company’s higher spending is earmarked for growth-oriented initiatives, the analyst said.
This will help Intuitive expand its total addressable market and remain the premium player in the surgical robotics market, Henry said.
2003 to 2015 Saw Increase in Outpatient Benzodiazepine Use, Co-Prescribing
Outpatient benzodiazepine use increased from 2003 to 2015, according to a study published online Jan. 25 in JAMA Network Open.
Sumit D. Agarwal, M.D., and Bruce E. Landon, M.D., from Harvard Medical School in Boston, quantified patterns in outpatient benzodiazepine prescribing and compared them across specialties and indications using nationally representative National Ambulatory Medical Care Survey data. The yearly population-based sample of outpatient visits among adults was analyzed and ranged from 20,884 visits in 2003 to 24,273 visits in 2015.
The researchers identified 919 benzodiazepine visits in 2003 and 1,672 in 2015, nationally representing 27.6 and 62.6 million visits, respectively. There was an increase in benzodiazepine visits from 3.8 to 7.4 percent. There was no change in the benzodiazepine visit rate to psychiatrists (29.6 percent in 2003 and 30.2 percent in 2015); the rate increased among all other physicians, including primary care physicians (3.6 to 7.5 percent). There was a fourfold increase in the rate of coprescribing of benzodiazepines with opioids, from 0.5 percent in 2003 to 2.0 percent in 2015; the coprescribing rate with other sedating medications increased from 0.7 to 1.5 percent.
“As we have seen with the opioid epidemic and in light of increasing death rates related to benzodiazepine overdose, addressing prescribing patterns may help curb the growing use of benzodiazepines,” the authors write.
Risk for Conversion to Progressive MS Varies With Different Therapies
For relapsing-remitting multiple sclerosis (MS), the risk for conversion to secondary progressive MS is lower with initial treatment with fingolimod, alemtuzumab, or natalizumab versus glatiramer acetate or interferon beta, according to a study published online in the Jan. 15 issue of the Journal of the American Medical Association.
J. William L. Brown, M.B.B.S., from the University of Cambridge in the United Kingdom, and colleagues conducted a cohort study with prospective data from 68 neurology centers in 21 countries. They included 1,555 patients with relapsing-remitting MS commencing disease-modifying treatments or clinical monitoring between 1998 and 2012 with a minimum of four years of follow-up.
The researchers found that the risk for conversion to secondary progressive MS was lower for patients initially treated with glatiramer acetate or interferon beta (hazard ratio, 0.71) and for fingolimod-, natalizumab-, and alemtuzumab-treated patients (hazard ratios, 0.37, 0.61, and 0.52, respectively) compared with matched untreated patients. Compared with initial treatment with glatiramer acetate or interferon beta, the risk for conversion was lower with fingolimod, alemtuzumab, or natalizumab (hazard ratio, 0.66). When glatiramer acetate or interferon beta was started within five years of disease onset versus later, the probability of conversion was lower (hazard ratio, 0.77).
“These findings, considered along with the risks associated with these therapies, may help inform decisions regarding disease-modifying treatment selection for patients with relapsing-remitting MS,” the authors write.
Several authors disclosed financial ties to the pharmaceutical industry.
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