巴克莱美股医疗保健行业美国生命科学与诊断2019年上半年制药业追踪201961043页

EquityResearch10June2019COREBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE38.Restricted-InternalU.S.LifeScienceTools&Diagnostics1H19BiopharmaTracker:IncreasedNoise,ButFundamentalsLookSolidWhile1Q19resultsandcommentaryfeaturedmorenoisethanrecentquarters,webelievethatunderlyingfundamentalsinthebiopharmaendmarketremainhealthyfortheLifeScienceToolsandCROs.Therewereseveraleventsthatraisedincreasedlevelsofpharma&biotechuncertaintytostart2019.Notably,severalcompaniesissuedcautionaroundsmallmoleculeinvestment(acrossmulti-nationalsandwithChina’s4+7initiative).Additionally,Biogen’sAlzheimer’sfailureandmergeractivityamongpharmasponsorsbroughttotheforefrontpotentialrisksaroundcancellationsfortheCROcoverage.Whilewearecognizantoftheneartermconcerns,asshowninourtrackers,wedonotbelievethesedynamicsdisruptourcorethesisaroundpositiveendmarketfundamentals:includingfunding,innovation&therapeuticutilization.Toprovideabettermethodoftrackingbiopharmaindustrygrowth,thisreportaggregatesacomprehensivesetofdatapointsweusetotrackendmarkettrends.ThisincludesourproprietarytrackersforbiopharmaR&D,IPOactivity,cashlevels,clinicaltrialsmix,CROandLifeScienceToolsgrowth,andFDAapprovaltrends.Pleasereachoutifyouwouldlikeacopyofanyofthetrackersfromthisreport.LifeScienceToolsTakeaways:Whileorganicgrowthslowedinthequarter(up4.9%,down290bpsq/q),theweaknessseemedtobecontainedinsmallmoleculeproductionapplications.Outsideofsmallmolecule,healthytrendsforotherToolscompanies(andtheCROs)helptoconfirmthequarterlyslowdownisn’tduetoabroader,market-relatedissue.Notably,weestimateorganicgrowthinbioproductiongrew19%inthequarter(overadouble-digitcomp),highlightingstructuraltrendstowardmorelife-scienceintensivemanufacturingoflargemoleculetherapeutics.WebelieveThermoFisher’s(TopPick,OW)uniquecapabilitiesservingthebiopharmaendmarketwillserveasalong-termdifferentiatedgrowthdriverforthecompany.CROTakeaways:CROsarebenefitingfromrecentstrengthinbookingsactivity,whichisstartingtotranslatetoaninflectioninorganicrevenuegrowth.TheCROspostedanestimated7.5%y/yorganicgrowthin1Q19(excludingpass-throughrevenues).EveryCROinourcoveragepostedanetbook-to-billof1.2xonaTTMquarterlybasis,andweestimatethatbackloggrowthwasinthemid-teens.Thecombinationofgoodscience,apushtowardpersonalizedmedicine,andanaccommodativeFDAisdrivingattractiveinvestmentreturnsforbiopharmasponsorsinR&D.OurBarclaysBiopharmaR&Dtrackershowsthatthespendingbackdropremainshealthy,with4%projectedgrowthinboth2019and2020.Similarly,ourBarclaysBiopharmaCash&FundingTrackersshowthatSMIDBiotechcashonhandremainsatall-timehighsfollowingrobustcapitalmarketsactivity(andincreased6%YTDin1Q19).Finally,webelieveapushtomorespecializedtherapeuticareassupportstheuseandvalueofproprietarydatasets,wherewefavorIQVIA,LabCorpandPRAHealth(allOW).DearClient:WeappreciateyourconsiderationintheInstitutionalInvestorAll-America&All-CanadaResearchTeam2019Survey.Toviewouranalysts,pleaseclickhere.INDUSTRYUPDATEU.S.LifeScienceTools&DiagnosticsNEUTRALUnchangedU.S.LifeScienceTools&DiagnosticsJackMeehan,[e-mail],USMitchellPetersen,[e-mail],[e-mail],USBarclays|U.S.LifeScienceTools&Diagnostics10June20192CONTENTSINTRODUCTION:INCREASEDNOISE,BUTFUNDAMENTALSLOOKSOLID....................................................................................................................3HIGHLEVELTHESISONBIOPHARMAASASUSTAINABLEGROWTHDRIVER.................................................................................................................6BIOPHARMAEXPOSUREISN’TEQUIVALENT-FAVORTHERMOFISHER’SMIX......................................................................................................8QUARTERLYMETRICSFROMLIFESCIENCETOOLSANDCROS........10MixedLifeScienceToolsUpdatesCloudHealthyUnderlyingOrganicGrowthTrends..........10BioproductionContinuestoDriveOutsizedGrowth.........................................................................12PerformanceMetrics:NewBusiness,Cancellations,NetBook-to-Bill,RevenueBurn,andOutsourcing..................................................................................................................................................131Q19MANAGEMENTCOMMENTARY......................................................19BARCLAYSBIOPHARMAR&DTRACKER...................................................22BARCLAYSBIOPHARMACASH&FUNDINGTRACKERS.......................26BARCLAYSFDACLINICALTRIALSTRACKER...........................................29THOUGHTSONTHEBIOPHARMAM&AENVIRONMENT....................34Barclays|U.S.LifeScienceTools&Diagnostics10June20193INTRODUCTION:INCREASEDNOISE,BUTFUNDAMENTALSLOOKSO