UBS Michael Yee: We've been quite bullish on the pharma sector
Speakers
Michael Yee
— Senior Pharma and Biotech Analyst, UBS
Summary
UBS senior pharma and biotech analyst Michael Yee explains why he is bullish on pharma/biotech. He argues drug pricing policy has removed overhang, M&A and underappreciated innovation are improving, valuations are cheap, and charts are breaking out. He specifically highlights Merck as a growth transformation story and Revolution Medicines as an oncology play.
- Pharma/biotech viewed as a strong sector with policy overhang removed.
- Drug pricing deals seen as reasonable rather than dramatic overhauls.
- M&A, R&D, obesity/GLP-1 and oncology success support the sector.
- Sector characterized as cheap, underappreciated and potentially an anti-AI trade.
- Merck highlighted for pipeline catalysts and multiple expansion.
- Revolution Medicines highlighted for pancreatic/lung cancer drug progress.
Ideas
Pharma sector has catalysts and removed overhang.
Michael Yee says UBS has been quite bullish on pharma/biotech because drug pricing negotiations are reasonable rather than dramatic overhauls, removing policy overhang and uncertainty. He also sees strong M&A, underappreciated R&D and innovation, cheap valuations, and charts starting to break out, with the group potentially acting as an anti-AI trade.
Merck transforming into growth with multiple expansion.
Yee is super bullish on Merck because it is transforming from an old sleepy pharma with a big patent cliff into a growth company, which he thinks supports multiple expansion. He points to multiple upcoming portfolio catalysts, including the Merck-Moderna cancer vaccine and a new ADC/sac-TMT cancer drug later this year.
Revolution Medicines has expanding oncology opportunity.
Yee also likes Revolution Medicines. Its breakthrough pancreatic cancer drug is continuing to make a big impact in lung cancer, making it another major story and an attractive way to play the pharma innovation theme.
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