HSBC bullish on IQVIA, Zoetis, bluebird, Actinium; bearish on Gilead
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HSBC initiated coverage of 11 US biopharma stocks this week, adding IQVIA, Zoetis, bluebird and Actinium Pharmaceuticals to its âbuyâ ratings list.
IQVIA (NYSE:IQV) and Zoetis (NYSE:ZTS) were labeled âquality growthâ stocks, joining such well-known names as Eli Lilly (LLY), Novo Nordisk (NVO) and AstraZeneca (AZN). The British bank said it sees IQVIAâs current valuation as an âattractive entry point,â with demand for its advanced analytics and clinical research services remaining âstrong.â 
HSBC also likes Zoetis, commenting that its âmarket position and significant R&D capability secure best-in-class exposure to the strong animal health theme.â The bank added that it believes the US launch of the osteoarthritis pain products Librela and Solencia can help Zoetis maintain its âsolid growth run and margin expansion journey until the end of the decade.â
Biogen (BIIB), bluebird (NASDAQ:BLUE), Amgen (AMGN) and Actinium (NYSE:ATNM) were also rated buys. 
Biogen (BIIB) was placed in bankâs âself-helpâ category, meaning that management actions could âtransform the company into a simpler growth story.â 
HSBC said that Biogenâs new Alzheimerâs drug has the potential to transform the company, while its planned acquisition of Reata (RETA) will expand its presence in rare diseases. 
Bluebird, meanwhile, was highlighted for having âunique exposure to niche markets with little competition.â HSBC said that while the biotech has a strong portfolio, it also has a âweakâ balance sheet that makes for a higher risk investment. The bank added that a funding round could help reduce this risk and return investor attention to three potential drug launches for rare diseases.
Amgen and Actinium were labeled âfallen angels,â despite their buy ratings, meaning they had strong fundamentals but near-term issues with their narratives. 
The bank said that while Amgen was facing a âsteepâ patent cliff, it was âwell placedâ in regard to potential Medicare price negotiations due to its focus on biologics. HSBC also believes Amgenâs R&D capabilities are âunderestimatedâ and should allow the company to grow despite the loss of market exclusivity on certain products. 
Actinium, meanwhile, has âfallen from graceâ due to prolonged development timelines, which âmade the market lose faith.â But HSBC noted that the company was finally making headway with its key product, which would face little competition and address a concentrated client base. 
âGiven the size of the company, we believe that it only needs moderate success to turn the company profitable and provide substantial upside risk to the current share price,â HSBC added.
HSBC also initiated coverage of Johnson & Johnson (JNJ) with a hold rating, citing its upcoming patent cliff, and LivaNova (LIVN) with a hold rating, citing high consensus expectations. LabCorp (LH) and United Health Group (UNH) were also rated holds, in part due to regulatory âchallenges.â
On the downside, the investment bank was bearish on Gilead (GILD), labeling it a âvalue trapâ with a âreduceâ rating. HBSC said it believes the company may need more M&A to help offset the upcoming patent loss and possible government price negotiations for its HIV drug Biktarvy. 
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