In today’s briefing:
- ResApp’s Scheme Meeting on 7 September Still Faces Headcount Test Risk
- Merck Inc.: Keytruda & Other Drivers
- Amgen Inc: The ChemoCentryx Acquisition & Other Drivers
- ASRT: Convertible Offering Pauses Momentum
- Eli Lilly & Co: Acquisition-Led Growth & Other Drivers
ResApp’s Scheme Meeting on 7 September Still Faces Headcount Test Risk
- Resapp Health (RAP AU)’s scheme meeting date has been set for 7 September. Pfizer Inc (PFE US)’s A$0.208 per share is its best and final offer.
- The Board hoped that the threat of a discounted equity raise and Pfizer’s final offer would sway the retail shareholders’ NO vote camp. However, there remains a vocal NO camp.
- The headcount test remains a key risk. The upside (9.5% spread to the offer) vs downside (likely equity raise at a huge discount) is an unfavourable risk/reward profile.
Merck Inc.: Keytruda & Other Drivers
- Merck continues to perform pretty well in the last quarter and delivered another all-around beat while continuing to bid on long-term growth.
- During the quarter, it achieved robust bottom and top-line growth and has made some additional vital clinical advancements in its pipelines.
- The animal health business of Merck also delivered strong performances as sales increased, driven by growth in both companion animal products and livestock.
Amgen Inc: The ChemoCentryx Acquisition & Other Drivers
- Amgen delivered strong volume-driven growth in the last quarter which resulted in the company managing an all-around beat.
- Many of the innovative products of the company performed quite well, namely Evenity, Prolia, Otezia, and Repatha, all of which delivered sales growth of double-digits.
- Across general medicine, oncology, and information, the company has a wide portfolio of biosimilar and innovative products that meet the patients’ needs globally.
ASRT: Convertible Offering Pauses Momentum
- ASRT has completed a convertible note offering providing financial flexibility in management’s pursuit of purchasing pharmaceutical assets.
- ASRT’s limited financial history of generating positive free cash flow limits available options
- The timing of the debt offering without a deal announced poses the possibility of limiting ASRT’s stock price appreciation
Eli Lilly & Co: Acquisition-Led Growth & Other Drivers
- Eli Lilly and Company had a very disappointing quarter and failed to meet the Wall Steet expectations in terms of revenues as well as earnings.
- In this quarter, the volume grew by 10%, and the new medicines of the company contributed 18% to the volume growth.
- We provide the stock of Eli Lilly and Company with a ‘Hold’ rating with a revision in the target price.
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