Earnings are over… only 6 weeks until 24Q1!
Full year reporting is (almost) over, and the results were mostly positive for the healthcare sector with roughly
60% of companies beating market estimates. Most striking however were the very large single stock moves, in
particular in the Medtech space. Previously observed trends of high healthcare utilization and soft China demand
were confirmed for the year ahead, and the upcoming US election remained a non-issue.
Overall, we exit this round of reporting with increased confidence on the strength of company fundamentals
and the robustness of underlying demand.
In detail
Biotech funding is back …
Contract research organisations (CROs), which derive part of their business from drug development outsourcing by biopharma companies, were stand-out performers of this earnings season. This largely reflects a better funding environment for smaller biotech companies, which make up an important part of CRO clients.
This fundamental data adds confidence to the solid primary and secondary fundraising activity seen year to date. While we are not at record-high funding levels seen in 2020, the return of funding opportunities for smaller biotech companies is
encouraging for investors.
… and so are GLP-1 headlines
After a relatively quiet month of January, the GLP-1 drug class has made headlines again. New clinical data sets have shown that novel drug candidates show potential for increased weight loss as well as improvement of liver function in patients with liver disease.
Pressure on incumbents is likely to remain moderate, as supply remains the major issue. This data showcases again the breadth of potential applications for these drugs. This wave of innovation is a net benefit for patients, but
investors must remain wary as there will be (and already have been) losers as well as winners.
Top 5 this month:
- GE Healthcare 24% Earnings
- Kyowa Kirin 24% Earnings, buyback
- UCB 21% Earnings
- IQVIA 19% Earnings
- Charles River Labs 18% Earnings
Bottom 5 this month:
- Grifols -26% Earnings,
- Orion -15% Earnings
- Insulet -14% Earnings
- SOBI -13% Earnings
- Amgen -13% Earnings, competitor data
| Healthcare | Medtech | Services | Pharma | Biotech | Tools | World | |
| 1M | 2.3% | 3.1% | 0.1% | 3.6% | -2.7% | 5.5% | 4.2% |
| 3M | 9.3% | 12.5% | -0.2% |
10.5% |
8.7% | 14.8% | 10.0% |
| YTD | 5.0% | 6.2% | -0.5% | 7.8% | 0.4% | 6.5% | 5.5% |
| 12M | 14.6% | 17.8% | 8.7% | 20.9% | 7.9% | 3.9% | 25.3% |
Source: Bloomberg Finance L.P., Kieger
Chart of the Month
Historically, there has been a noticeable uptick mentions of the election in conference calls as we approach the event. This time around, however, the frequency of these mentions remains remarkably low.
There are a number of possible explanations for this: First, the healthcare policies of both presidential candidates are well known, reducing uncertainty. Second, healthcare is not as high on Americans’ list of current concerns as in the past.
Check out our video on this subject here.
Quarterly “election” mentions by companies in our universe
This news article has been issued through Kieger AG and is for distribution only under such circumstances as may be permitted by applicable law. This document is for information purposes only and does not constitute an offer. Past performance is not a reliable indicator of future results. The details and opinions contained in this document are provided by Kieger without any guarantee or warranty and are for the recipient’s personal use only. All information and opinions contained in this document are subject to change without notice. This document may contain statements that constitute “forward looking statements”. A number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Data source: Statestreet / Factset.
