Scotiabank starts 10 large cap drugmakers with ‘out-of-consensus’ positive view

Scotiabank analyst Louise Chen initiated coverage of 10 large cap biopharma companies with an “out-of-consensus” positive sector view, citing a belief that large cap biopharma stocks’ multi-year underperformance relative to other sectors and the major indices creates a good entry point ahead of the next wave of innovation, where companies “will be treating to cure.” The firm, which says it favors companies that could be the first to cure life-threatening diseases, names Johnson & Johnson (JNJ) its top pick because the company is treating to cure and strong execution is making the company’s underlying growth increasingly apparent, the analyst tells investors. In addition to having an Outperform rating on J&J, the firm starts AbbVie (ABBV), Amgen (AMGN), Gilead (GILD), Eli Lilly (LLY), Pfizer (PFE), Merck (MRK) and Vertex Pharmaceuticals (VRTX) at Outperform and begins Bristol Myers (BMY) and Regeneron (REGN) with Sector Perform ratings.