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The Zacks Analyst Blog Highlights: Novartis, BP and Biogen

Zacks Equity Research
Wall Street finished in the green reversing its five-day negative trend on Thursday following news that United States and China have ramped up their efforts to resolve lingering trade disputes

For Immediate Release

Chicago, IL – February 9, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Novartis NVS, BP BP and Biogen BIIB.

Here are highlights from Thursday’s Analyst Blog:

Top Research Reports for Novartis, BP and Biogen

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 Novartis, BP and Biogen. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Novartis’ shares have underperformed the Zacks Large-Cap Pharmaceuticals industry (+0.8% vs. +3.2%), over the last six months. Novartis’ fourth-quarter results beat both earnings and sales estimates on strong performance of Cosentyx and Entresto. The generic division, Sandoz also combatted pricing pressure strongly buoyed by biosimilar launches of Rixathin and Erelzi.

Novartis has a strong oncology portfolio of drugs like Afinitor, Exjade, Jakavi, Zykadia, Tasigna, Jadenu and Kisqali. The approval of Kymriah for acute lymphoblastic leukemia is a major boost given the potential in the CAR-T therapy space.

Meanwhile, the strategic decision on Alcon to retain the business or separation via capital market transactions such as a spin-off or an initial public offering has been postponed for 2019. However, the loss of patent protection for some of the key drugs in Novartis’ portfolio is a cause of concern. Moreover, Kisqali’s uptake has been slow.

Shares of BP are up +16.1% over the last one year, outperforming the Zacks International Integrated Oil industry (up +7.2%). During 2017, the leading integrated energy firm brought online seven key upstream projects. BP is also expected to bring online five more developments in 2018.

All these projects along with the developments placed online during 2016 will likely help the energy giant add 800,000 barrels of oil equivalent per day to net production capacity by 2020. The firms’ fourth-quarter 2017 earnings skyrocketed year over year, courtesy of record oil and gas production and higher commodity price realizations.

However, the bottom line missed expectations, thanks to a surge in exploration expenses. Moreover, the oil spill incident of 2010 in the BP-operated Macondo Prospect continues to affect the company. BP anticipates cash out flow related to the incident of $3 billion through 2018 against the prior projection of slightly more than $2 billion.

Biogen’s shares have outperformed the Zacks Biomedical and Genetics industry over the last year (+20.9% vs. +0.8%). Biogen had a mixed fourth quarter as it beat estimates for earnings but missed the same for sales. However, Biogen issued an upbeat outlook for 2018.

Biogen has a strong position in the MS market with a wide range of products including Avonex, Tysabri, Tecfidera & Plegridy. The Zacks analyst likes its efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke, among others. Meanwhile, its newest drug 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. Meanwhile, the launch of Ocrevus by Roche is beginning to have a negative impact on MS franchise sales in the U.S., mainly on Tysabri.

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