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UBS Remains Bullish on Biotech; Achillion Pharma (ACHN) PT Raised to $15 (AMGN) (CELG) (GILD) (MDVN)

September 2, 2014 10:15 AM EDT
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Price: $0.79 --0%

Rating Summary:
    11 Buy, 7 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 4 | New: 36
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UBS analyst Matthew Roden remains bullish on biotech and he thinks upside to numbers, pipeline, and M&A will drive shares higher.

Achillion Pharma's (NASDAQ: ACHN) price target was raised to $15 (from $11). Amgen's (NASDAQ: AMGN) price target was raised to $155 from $129. Celgene's (NASDAQ: CELG) price target was raised to $112 (from $105). Gilead Sciences' (NASDAQ: GILD) price target was raised to $125 (from $115). Medivation's (NASDAQ: MDVN) price target was raised to $105 (from $90).

Other stock mentioned in the report include Akebia Therapeutics (NASDAQ: AKBA), Concert Pharma (NASDAQ: CNCE), PUMA BIOTECHNOLOGY, Inc. (NYSE: PBYI), Regeneron (NASDAQ: REGN), and Vertex Pharma (NASDAQ: VRTX)

" [1] We continue to think numbers are beatable in large cap this year. None of our models look stretched, and in our view there appears to be plenty of room to beat (particularly for GILD), which we think can continue to drive numbers higher. [2] We also think multiple expansion can be driven by pipeline catalysts this fall, including CELG’s GED-301, initial data for GILD’s simtuzumab in cancer (where expectations are non-existent, in our view), and 7-day data for ACHN’s nuc in HCV. [3] We are more bullish on M&A given the inflection of cash flows in large cap, coupled with the need for large cap to address toughening growth comps by 2016-17, and because mid-caps have done a good job in value creation through de-risking of valuable assets. We expect PBYI to be top of the list for bolt-on growth," said Roden.

"Amid low expectations, we think both CELG and GILD could see $5-10 upside if pipeline readouts described above are convincing. We see compelling risk-reward in VRTX shares considering upside/downside scenarios, and we surmise it is under owned in large cap growth portfolios. We think PBYI is still undervalued, has several catalysts, and is a top takeout candidate. We see asymmetric upside potential in ACHN if its nuc is safe and potent in 7-day treatment data, which would drive ACHN's strategic value higher," he added.



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