Health Care: GlaxoSmithKline PLC, Bangkok Chain Hospital, Collegium Pharmaceutical and more

In today’s briefing:

Unilever/GSK Heathcare: Ballsy, but Doable

GSK has rejected Unilever’s approaches (last at £50 billion) but leaked it would be ready to accept an offer around £60 billion (a whopping c. 65% of Unilever’s market capitalisation).
The deal would be transformational and Unilever’s management see it as the way forward to revive the company’s performance and the share price.
Ballsy, but doable, with a positive impact on results from FY2024, but negative impact on leverage at 4.9x. I believe that Unilever may make a further approach.

Maintain HOLD rating, with a TP of Bt21, based on 23xPE’22E,which is close to -1SD of its 10-years trailing average. The 30% drop in share price from its August 21
Yesterday, the Centre for COVID-19 Situation decided to relax some restrictive measures including a revision to the colour-coded zoning and resuming Test&Go registration for foreign travelers starting from 1 Feb
Expect 4Q21 earnings at Bt1.3bn (+384%YoY,-54%QoQ), tumble by weak margin due to the Covid cases declined 69%, but partially offset by pent-up demand for core services

COLL has yet to issue their annual revenue forecast after three consecutive years of providing such guidance, leading us to assume 2022 could be challenging than current consensus estimates imply
XtampzaER revenue declined in third quarter 2021 with COLL facing difficulty in getting physicians to switch prescriptions. The slowdown in XtampzaER revenue has been the core of our investment thesis
COLL has a balance sheet liability of $191.7 million related to rebates, returns, and discounts. This liability has grown faster than revenue

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