Canaccord Genuity on Life Sciences/Specialty Pharma: What an Actavis Deal Could Mean to Watson (WPI) and the Sector
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Rating Summary:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity on Life Sciences/Specialty Pharma: A Look at What an Actavis Deal Could Mean to Watson (NYSE: WPI) and the Sector
Randall Stanicky, said, "We have seen a notable pick-up in call volume on the generic sector following GPhA that has continued given the widespread speculation around a possible acquisition of European-based Actavis by Watson. With press reports (Bloomberg) suggesting that a deal could come after this coming holiday weekend, we’ve taken a deeper dive into the implications and what a deal could look like. The bottom line is that we think a deal is likely and accretion material and would continue to be BUYERS of Watson here as our favorite generic name."
Possible implications for Watson Pharmaceuticals (NYSE: WPI), Mylan (NYSE: MYL) and Teva Pharmaceuticals (Nasdaq: TEVA).
WPI (BUY): Raising EPS through 2015; focus now on a potential Actavis acquisition We are raising EPS through 2015E (by 0-5%) including Q1 largely on product mix (higher Gx Concerta, Rapaflo and lower Gx Lipitor) with our three-year CAGR now 12% through 2014E (18% ex-Lipitor). While we continue to see a 2012 “beat and raise” story intact, the near-term focus is on a potential Actavis acquisition.
MYL (HOLD): Lowering Q1 EPS and continue to see upside more limited near term We are lowering our Q1 EPS estimate, which has us more in line with management guidance from the February 21 analyst meeting and now slightly below consensus. We still see 2012 as solid though back-end-weighted, with our focus remaining on 2013+ where we are up to 5% below consensus.
TEVA (BUY): We continue to like the risk/reward though near-term outlook more binary. We’ve seen a sharp reduction in interest in the name relative to the other two year-to-date...That said, while the stock has taken a not-so-surprising pause, we do see a solid underlying earnings story (ex-US Copaxone) and deep discount to pharma.
Randall Stanicky, said, "We have seen a notable pick-up in call volume on the generic sector following GPhA that has continued given the widespread speculation around a possible acquisition of European-based Actavis by Watson. With press reports (Bloomberg) suggesting that a deal could come after this coming holiday weekend, we’ve taken a deeper dive into the implications and what a deal could look like. The bottom line is that we think a deal is likely and accretion material and would continue to be BUYERS of Watson here as our favorite generic name."
Possible implications for Watson Pharmaceuticals (NYSE: WPI), Mylan (NYSE: MYL) and Teva Pharmaceuticals (Nasdaq: TEVA).
WPI (BUY): Raising EPS through 2015; focus now on a potential Actavis acquisition We are raising EPS through 2015E (by 0-5%) including Q1 largely on product mix (higher Gx Concerta, Rapaflo and lower Gx Lipitor) with our three-year CAGR now 12% through 2014E (18% ex-Lipitor). While we continue to see a 2012 “beat and raise” story intact, the near-term focus is on a potential Actavis acquisition.
MYL (HOLD): Lowering Q1 EPS and continue to see upside more limited near term We are lowering our Q1 EPS estimate, which has us more in line with management guidance from the February 21 analyst meeting and now slightly below consensus. We still see 2012 as solid though back-end-weighted, with our focus remaining on 2013+ where we are up to 5% below consensus.
TEVA (BUY): We continue to like the risk/reward though near-term outlook more binary. We’ve seen a sharp reduction in interest in the name relative to the other two year-to-date...That said, while the stock has taken a not-so-surprising pause, we do see a solid underlying earnings story (ex-US Copaxone) and deep discount to pharma.
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