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AmerisourceBergen Is 'The Pony To Ride' For Biosimilars

Javier Hasse

Shares of AmerisourceBergen Corp. (NYSE: ABC) closed up more than 3.7 percent on Monday, after analysts at UBS upgraded the stock from Neutral to Buy. In a report rolled out Sunday, the firm assured that AmerisourceBergen may have the "greatest leverage to U.S. biosimilars (~$65 bil biologics in 5 yrs)."

After the U.S. Food and Drug Administration approved the first biosimilar drug in the U.S. market a week ago, UBS conducted a "deep dive" analysis into the biosimilar opportunity set for the next five years. The firm concluded that "among all of the companies in our [the firm's] pharma supply channel coverage (drug distributors, PBMs, retail drug chains and LTC pharmacies), ABC will likely have the greatest EPS leverage." As such, they believe AmerisourceBergen "is 'the pony to ride' to capture upside related to the estimated $65 bil in biologics that may face biosimilar competition during 2015-'19."

As a result of this change, the firm raised its EPS estimates for fiscal 2015 (from $4.64 to $4.68), 2016 (from $5.38 to $5.48) and 2017 (from $6.07 to $6.27), and boosted its price target from $102 to $118.

Latest Ratings for ABC

Date Firm Action From To
Mar 2015 UBS Upgrades Neutral Buy
Jan 2015 Credit Suisse Maintains Outperform
Jan 2015 JP Morgan Maintains Neutral

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