We plan to release a weekly note on the recent happenings in the healthcare space impacting healthcare companies under our coverage. Below we summarize a few such events related to Abbott Labs (NYSE:ABT), Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), Boston Scientific’s (NYSE:BSX), Medtronic (NYSE:MDT) and Roche Holdings (PINK:RHHBY) which could impact their value going forward.
Abbott Labs was in the news for a variety of reasons. Its largest-selling drug, Humira was approved for the treatment of severe active Crohn’s Disease in pediatric patients who failed to respond to conventional treatments in the Europe. The approval will certainly strengthen the chances of Humira’s approval for similar condition in other regions driving the revenue growth for the drug. Please refer Abbott Labs Updates: Europe Approves Humira For Severe Crohn’s Disease in Children for further details.
- JNJ’s Q2 Results Reaffirm Our Stance For Pharmaceutical Growth
- Despite Resistance From Medical Devices Business, JNJ Could Post Decent Q2 Results?
- J&J’s One Touch Via Provides $1 Billion Market Opportunity
- How Much Profit Does JNJ’s Vogue Need To Generate To Justify Its Acquisition Price?
- Key Takeaways For J&J From Goldman Sachs Healthcare Conference
- J&J’s Stock Gain Following Q1 2016 Earnings Reaffirms Our Bullish Stance
Further, the company’s board has paved the way for much talked about Abbott’s split into two separate publicly traded companies. The company will complete the spin-off process by Jan 1. Refer our note Abbott Labs: Board Approves Split As Jan 1 Nears for more details.
The buzz around Pfizer’s acquisition of Stride Acrolab’s specialty injectables unit Agila has been getting louder. While speculative at this stage, the acquisition if completed, will help the company get access to rapidly growing generic injectables, where the margins are higher than oral drugs. Further, the injectables supply has been going through a crunch following FDA’s crackdown on various facilities. See our note Pfizer: Acquisition Of An Injectables Unit In India On The Cards? to get more insight.
Johnson & Johnson
An advisory panel to the U.S. FDA has supported early approval for bedaquilinean, Johnson & Johnson’s experimental drug for the treatment of tuberculosis (TB) as TB is considered resistant to currently available drugs. While they were unequivocal about the drug’s efficacy (18-0 vote), some were concerned about safety (11-7 vote with 11 backing the safety). The experimental drug will be a part of the company’s Anti-Infectives division, which is seeing a near-term decline in revenues due to the Levaquin patent expiry. However, a gradual recovery could be supported by a prior approval for the drug, which could clock $300 million in peak sales. 
Boston Scientific and Medtronic
The U.S. FDA recently raised fresh concerns about the defibrillator leads from St. Jude Medical (NYSE:STJ), one of its biggest competitors in the Cardiac Rhythm Management (CRDM) market. This is second such case for St. Jude Medical in the last twelve months. Such concerns erode brand value while making customers look for alternatives. St. Jude Medical generates about about $1.8 billion from total ICD business, which could be up for grabs due to FDA concerns and both companies could benefit from the fresh troubles for its competitor. Please read our note Boston Scientific Could Benefit From St. Jude Medical’s Troubles.
In a recent survey by J.D. Power and Associates, a business unit of McGraw-Hill, Roche Holdings’ blood glucose meters topped industry average to beat Abbott Laboratories, among others. The company scored the highest in the performance category, meaning high confidence shown by consumers in the reliability of the company’s devices.  Banking to the survey, the company could try to boost its diabetes business, which has seen a decline in sales due to reimbursement cuts and pricing pressures. Diabetes care products are a part of “in vitro diagnostic products” in our model.