Health Care Roundup: Market Talk

The latest Market Talks covering the Health Care sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1035 ET – Investors were cautious on Novartis’s clinical trials of an experimental therapy targeting autoimmune and neurological disorders that the Swiss drugmaker decided to pause after three patients died, UBS analysts say in a research note. The therapy, known as rap-cel or YTB323, is a cell therapy called CAR-T that works by removing a patients’ own immune cells, engineering them in a lab and infusing them back into the body. “While YTB was seen as an important potential programme from treatment [of] refractory immunology indications, we and investors were cautious about the high-risk nature of using CART in immunology,” UBS says. Novartis shares rise 5.9%, lifted by positive results from separate studies on a multiple sclerosis drug. (adria.calatayud@wsj.com)

1027 ET – Novartis’s latest trial results for a multiple sclerosis drug suggest a multibillion-dollar sales opportunity is within the Swiss drugmaker’s reach, analysts at J.P. Morgan say in a research note. The results for Novartis’s Rhapsido reduce risk on a sales opportunity of at least $2 billion to $3 billion in relapsing multiple sclerosis alone, according to JPM. Given that consensus forecasts for 2030 sales from the drug currently stand at $3.4 billion, mainly from skin conditions, consensus estimates could see significant upgrades after the results, the analysts say. That said, detailed data are required to assess the drug’s potential relative to Roche’s fenebrutinib and so-called anti-CD20 therapies, a different class of medicines, they add. Novartis shares jump 6.3%. (adria.calatayud@wsj.com)

1014 ET – Novartis’s trial results for a multiple sclerosis drug are in line with a blue-sky scenario, UBS analysts say in a research note. The Swiss drugmaker’s results from two late-stage studies point to a greater reduction in annualized relapse rates with its Rhapsido compared to Sanofi’s Aubagio, with no liver safety issues, the analysts say. These results suggest Novartis’s drug might be at least a best-in-class oral medicine for the disease, according to UBS. UBS estimates that there’s a 50% probability the drug’s sales for relapsing multiple sclerosis reach $4.5 billion. Novartis shares jump 6.2%. (adria.calatayud@wsj.com)

0214 ET – Bangkok Chain Hospital may benefit from its acquisition of a new hospital in Thailand’s Ubon Ratchathani, UOB Kay Hian analysts say in a research report. The new hospital will act as a key link to Bangkok Chain Hospital’s network as it is located in strategically strong location, based on management’s update regarding the acquisition in analyst meeting. Management sees growth potential at the new hospital, ‘Kasemrad International Hospital Ubon Ratchathani,’ partly because there is scope to raise treatment prices to match other Kasemrad hospitals. The brokerage maintains the stock’s buy rating but trims its target price to 13.00 baht from 14.00 baht to reflect valuation roll-over. Shares are 3.7% higher at 11.10 baht. (ronnie.harui@wsj.com)

2222 ET – CSL’s U.S. agreements on drug pricing and manufacturing expansion remove two overhangs on the stock, Morgans analyst Derek Jellinek says. He tells clients in a note that the Australia-based pharmaceutical company has reinforced its competitive position as a major U.S. manufacturer of plasma-derived therapies. Jellinek sees the key positive of CSL’s Medicaid pricing agreement as the improved visibility on exposure to potential U.S. drug-pricing reform. As for its onshoring agreement, he reckons it gives greater certainty with regard to tariff exposure. Morgans has a last-published buy rating on the stock and a target price of 187.71 Australian dollars. Shares are up 0.9% at A$173.07. (stuart.condie@wsj.com)