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    AZN   GB0009895292

ASTRAZENECA PLC

(AZN)
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Pharma, biotech shares soar as Trump win calms pricing talk

11/09/2016 | 02:37pm EDT
A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange

NEW YORK/LONDON (Reuters) - Pharmaceutical and biotechnology shares soared on Wednesday as Republican Donald Trump's U.S. presidential election calmed investor fears of tough action on drug pricing that has pressured the sector for more than a year.

Hospital shares tumbled as a Republican sweep of Congress raised prospects for a rollback of the Affordable Care Act (ACA), which expanded the number of patients in government health plans.

Fears of a win by Hillary Clinton and Democrats gaining power in Congress had clouded the outlook for biotech and pharma shares and contributed to general underperformance for the U.S. healthcare sector this year.

On Wednesday, the stocks also were fueled by the defeat of a Californian ballot proposal aimed at reining in rising prices for prescription drugs.

Clinton "not being in the White House removes the notion of some sort of price controls off the table," said Tony Butler, an analyst at Guggenheim Securities in New York. "From the perspective of pharmaceutical, biotechnology, generic (drug) stocks, (the election) went about as well as could be expected."

Shares of drugmaker Pfizer (>> Pfizer Inc.) rose 8.5 percent and biotech Celgene (>> Celgene Corporation) jumped 10.4 percent, while specialty drugmaker Mallinckrodt (>> Mallinckrodt PLC) surged 10 percent.

European drug stocks also gained, with Switzerland's Roche (>> Roche Holding Ltd.) and France's Sanofi (>> Sanofi) both rising more than 5 percent.

The Nasdaq Biotechnology index <.NBI> advanced 9 percent and was on track for its biggest single-day gain in more than eight years.

Biotech sentiment was also lifted by the prospect of Republican-led legislation to free up cash currently held overseas for tax reasons by large U.S. pharmaceutical companies. Analysts said that could pave the way for acquisitions in the sector.

Biotech and pharmaceutical investors have been on edge since September 2015, when Clinton tweeted about specialty drug "price gouging." Over that time, Nasdaq-listed biotech shares had lost more than one-fourth of their value through Tuesday.

Trump has said less on the topic. But he has suggested support for importation of cheaper drugs and advocated increased scrutiny over drug price increases and a bigger role for negotiating down the cost of medicines.

Some Republican lawmakers have also seized on high drug prices in the past year, including for Mylan's (>> Mylan NV) EpiPen emergency allergy treatment, suggesting the issue may not go away.

Even with a Trump administration, "we do believe there is an overall shift toward greater pricing scrutiny that will continue to reduce potential revenue growth purely from price increases," Jefferies analyst Brian Abrahams said in a research note.

Shares of hospital chains Tenet Healthcare (>> Tenet Healthcare Corp) and HCA Holdings (>> HCA Holdings Inc) tumbled 25 percent and 12 percent, respectively, while health insurer Centene (>> Centene Corp), which specializes in the government's Medicaid health program that was expanded under the healthcare law, dropped 17.3 percent.

"We see extreme risk of ACA repeal/replace, loss of the Medicaid expansion, a primary driver of results for both hospitals and health plans," Mizuho Securities analyst Sheryl Skolnick said in a research note.

(Additional reporting by Deena Beasley in Los Angeles, John Miller in Zurich and Annabella Pultz Nielsen in Copenhagen; Editing by Pravin Char and Jeffrey Benkoe)

By Lewis Krauskopf and Ben Hirschler


ę Reuters 2016
Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED 2.26% 1.13 End-of-day quote.-27.56%
ASTRAZENECA PLC -0.22% 8795 Delayed Quote.20.08%
CELGENE 0.10% 108.24 End-of-day quote.68.89%
CF INDUSTRIES HOLDINGS, INC. -2.54% 59 Delayed Quote.52.42%
DEERE & COMPANY 0.91% 332.76 Delayed Quote.22.57%
EXTREME CO.,LTD. 0.87% 1161 End-of-day quote.0.26%
GLAXOSMITHKLINE PLC -0.16% 1399.6 Delayed Quote.4.29%
HCA HEALTHCARE, INC. 1.80% 246.88 Delayed Quote.50.12%
LETS HOLDINGS GROUP CO., LTD. 1.93% 6.34 End-of-day quote.-18.51%
MALLINCKRODT PLC 2.73% 0.18425 Delayed Quote.-26.59%
MERCK & CO., INC. 0.00% 78.33 Delayed Quote.-4.24%
MIRAINOVATE CO., LTD. 0.86% 234 End-of-day quote.-22.00%
NEXT PLC 0.77% 7868 Delayed Quote.11.04%
NOVARTIS AG 0.61% 76.93 Delayed Quote.-8.03%
NOVO NORDISK A/S 1.75% 658 Delayed Quote.54.22%
PFIZER, INC. -0.43% 41.49 Delayed Quote.13.20%
ROCHE HOLDING AG 0.87% 360.25 Delayed Quote.16.59%
SANOFI -0.34% 83.84 Real-time Quote.6.53%
TENET HEALTHCARE CORPORATION 1.79% 63.56 Delayed Quote.59.18%
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Analyst Recommendations on ASTRAZENECA PLC
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Financials (USD)
Sales 2021 35 590 M - -
Net income 2021 4 919 M - -
Net Debt 2021 24 667 M - -
P/E ratio 2021 34,5x
Yield 2021 2,33%
Capitalization 187 B 187 B -
EV / Sales 2021 5,96x
EV / Sales 2022 4,84x
Nbr of Employees 76 100
Free-Float 96,4%
Chart ASTRAZENECA PLC
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AstraZeneca PLC Technical Analysis Chart | AZN | GB0009895292 | MarketScreener
Technical analysis trends ASTRAZENECA PLC
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 27
Last Close Price 120,92 $
Average target price 138,73 $
Spread / Average Target 14,7%
EPS Revisions
Managers and Directors
Pascal Soriot Chief Executive Officer & Executive Director
Aradhana Sarin Chief Financial Officer & Executive Director
Leif Valdemar Johansson Non-Executive Chairman
Menelas NICOLAS Pangalos EVP-Biopharmaceuticals Research & Development
Pam P. Cheng Executive VP-Operations & Information Technology
Sector and Competitors
1st jan.Capi. (M$)
ASTRAZENECA PLC20.08%187 492
JOHNSON & JOHNSON2.49%424 619
ROCHE HOLDING AG16.59%339 442
NOVO NORDISK A/S54.22%234 792
PFIZER, INC.13.20%232 621
ELI LILLY AND COMPANY40.89%215 657