对底医疗技术和分销的思考

1、North America Equity ResearchSeptember 2020Healthcare Technology & DistributionThoughts Across Healthcare Technology & Distribution into Year End 2020SectorLisa C. Gill AC(212) 622-6466 HYPERLINK mailto:lisa.c.gill lisa.c.gill Bloomberg JPMA GILLJ.P. Morgan Securities LLCMichael R. Minchak AC(212) 6

2、22-6506 HYPERLINK mailto:michael.minchak michael.minchakJ.P. Morgan Securities LLCAnne E. Samuel AC(212) 622-4163 HYPERLINK mailto:anne.e.samuel anne.e.samuelJ.P. Morgan Securities LLCSee the end pages of this presentation for analyst certification and important disclosures, including non-US analyst

3、 disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor

4、in making their investment decision.J.P. M organ Healthcare Technology & Di stribution Coverage UniverseCompanyTickerJPM Rating DistributorsAmerisourceBergenABCOWCardinal HealthCAHNMcKessonMCKOWOw ens & MinorOMIUWPrice52-Week Range% ChangeMarket CapPrice/Earnings RatioEnterprise Value /EBITDADividen

5、dTargetHighLowYTD(billions)2020E2021E2020E2021EYieldPrice$94.08$106.45$72.0610.7%$19.311.711.18.07.71.8%$114.00$48.38$60.69$39.05-4.3%$14.29.58.36.96.34.0%$58.00$150.37$172.18$112.608.7%$24.610.29.07.87.11.1%$198.00$15.70$17.66$3.63203.7%$1.015.012.010.49.40.1%$12.00Pharma Distributors ave rage5.0%1

6、0.49.57.67.1Dental Distributors (covered by M . M inchak)Henry ScheinHSICN$64.37$73.99$41.85-3.5%$9.225.617.516.112.3N/A$66.00Patterson CosPDCON$23.92$30.38$12.9316.8%$2.316.015.010.910.84.3%$23.00Dental Distributor average6.6%20.816.313.511.5All Distributors average32.6%15.612.610.99.4Retail Pharma

7、cyCVS HealthCVSOW$57.40$77.03$52.04-22.7%$75.48.07.87.97.73.5%$102.00Rite AidRADN$11.79$23.88$6.59-23.8%$0.6N/AN/A7.37.2N/A$17.00Walgreens Boots AllianceWBAN$34.70$64.50$33.88-41.1%$30.48.16.67.36.35.4%$43.00Retail Pharm acy average-29.2%8.07.27.57.1CVS and WBA ave rage-31.9%8.07.27.67.0Clinical Lab

8、oratoriesLabCorpLHOW$181.47$206.74$98.027.3%$17.914.812.012.210.2N/A$227.00Quest DiagnosticsDGXN$110.33$131.81$73.023.3%$15.313.110.410.08.42.0%$159.00Clinical Laboratory average5.3%13.911.211.19.3OtherCernerCERNN$70.95$80.90$53.08-3.3%$22.325.022.912.912.21.0%$74.00Change HealthcareCHNGOW$14.32$17.

9、57$6.18-12.6%$4.612.0499.710.29.7N/A$17.00One MedicalONEMOW$27.57$44.87$15.0096.9%$4.3N/AN/AN/AN/AN/A$40.00PremierPINCN$31.11$39.70$27.11-17.9%$3.812.212.57.37.4N/A$33.00TeladocTDOCOW$189.91$253.00$60.05126.8%$17.2N/AN/AN/AN/AN/A$266.00Healthcare IT (covered by A. Samuel)AllscriptsMDRXN$8.67$11.82$4

10、.56-11.7%$0.213.112.84.03.7N/A$9.00Evolent HealthEVHN$12.87$14.50$3.5042.2%$1.1N/AN/AN/AN/AN/A$12.00Health CatalystHCATOW$34.50$41.26$17.48-0.6%$1.4N/AN/AN/AN/AN/A$42.00HealthEquityHQYOW$51.56$88.78$34.40-30.4%$4.035.530.023.519.9N/A$61.00LivongoLVGOOW$121.72$150.00$15.12385.7%$12.2N/AN/AN/AN/AN/A$8

11、8.00NextGenNXGNUW$13.38$18.49$5.10-16.7%$0.917.317.18.88.7N/A$12.00PhreesiaPHROW$28.15$34.85$16.015.7%$1.1N/AN/AN/AN/AN/A$35.00ProgynyPGNYOW$25.86$36.50$13.29-5.8%$2.2N/AN/AN/AN/AN/A$35.00Healthcare IT average (including CERN, PINC)43.4%20.619.111.310.4S&P 500SPX3,340.97 3,588.112,191.863.4%25.5x20.

12、1xSo urce: B lo omberg and J.P . M organ estimates.* Target Prices for RAD, CHNG, P IN C, M DRX, HQY and P GNY are based on an EV/EB ITDA multiple; ONEM , TDOC, EVH, HC AT, LVGO and PHR based o n EV/sales multiple; all others based o n a P/E multiple. Note: J.P . M organ ratings: OW = Overweight; N

13、= Neutral; and UW = Underweight; NR = No t Rated.Source: Bloomberg. Pricing as of 9/11/20202 Value-Based CareOngoing interest in value-based models that tie reimbursement to health outcomesCompanies that are part of the cost solution stand to benefit the most from this trend SpecialtySpecialty remai

14、ns the fastest growing area of drug spendWith payors looking for ways to address rising specialty costs, companies that help manage specialty spend likely to benefit The Consumer The Single Biggest Disrupter in HealthcarePatients (consumers) are getting more educated and involved in their healthcare

15、 and making decisions on how to allocate their healthcare dollarsThe opportunity to engage the patient at their preferred point of service should be an important differentiatorConvenience, quality and cost will be keyKey Themes Across the Sector Political/RegulatoryThe potential for regulatory chang

16、es has led to a broader overhang on the sectorHowever, for substantial reform to pass, would need a bipartisan solution, alignment of Congress/White House, with 60 votes in the Senate Capital DeploymentWe favor companies with strong balance sheets and good cash flowRecent transformative deals and th

17、e potential for disruptive entrants could lead to a more active pursuit of M&A and/or joint ventures in the near term3Source: J.P. Morgan.The S&P 500 is up +3.4% YTD in 2020 and the S&P 500 Health Care Sector Index is up +2.3% YTD. Our covered companies are up +28.6%, on average, YTD in 2020, althou

18、gh excluding TDOC, LVGO and OMI, our companies are down -4.4% YTD on average.Pharmaceutical Distributors are up +5.0% YTD in 2020, on average, with both ABC and MCK outperforming CAH (ABC is up +10.7% and MCK is up +8.7% while CAH is down -4.3%).Drug Retailers are down -29.2% on average YTD in 2020,

19、 and the worst performing subsector. CVS is down -22.7% YTD in 2020, outperforming WBA (down -41.1% YTD, and the worst performing stock in our coverage universe), while RAD is down -23.8% YTD.Clinical Labs are up +5.3% YTD in 2020, with LH up +7.3% YTD and DGX up +3.3% YTD.Dental Distributors are up

20、 +6.6% on average YTD in 2020, with HSIC down -3.5% YTD, while PDCO is up 16.8% after underperforming in prior years.Healthcare IT is up +40.6% YTD on average in 2020, driven by the sharp increase in LVGO (which is up 386% YTD and is the best performing stock in our coverage universe). Excluding LVG

21、O, Healthcare IT is down -2.6% YTD with EVH up +42.2%, while HQY is down -30.4% and NXGN is down -16.7%.Among stocks not included within the five subsectors discussed above, TDOC (a Telehealth provider) is up +126.8% YTD in 2020 (the third best performing stock in our coverage universe) as COVID-19

22、has driven increased awareness and utilization, while ONEM (a tech-enabled primary care provider) is up 96.9% since its IPO on 1/30/2020, while OMI (a Medical Supply Distributor) in up 203.7% YTD in 2020 (the second best performing stock) driven by demand for PPE). Finally, PINC (a GPO and Technolog

23、y Services provider) is down -17.9% YTD.Stock Performance YTD in 2020 by CompanyHCAT, -0.6%CERN, -3.3%HSIC, -3.5%CAH, -4.3%PGNY, -5.8%MDRX, -11.7%NXGN, -16.7%PINC, -17.9%CVS, -22.7%RAD, -23.8%HQY, -30.4%WBA, -41.1%EVH, 42.2%PDCO, 16.8%ABC, 10.7%MCK, 8.7%LH, 7.3%PHR, 5.7%DGX, 3.3%OMI, 203.7%TDOC, 126

24、.8%LVGO, 385.7%Stock Performance YTD in 2020 by Sector30%20%10%0%-10%-20%-30%-40%-50%Drug DistributorDrug RetailLabsDental DistHealthcare IT ex LVGOS&P 500 SectorReturnHealthcare IT40.6%Dental Dist6.6%Labs5.3%Drug Distributor5.0%S&P 5003.4%Healthcare IT ex LVGO-2.6% Drug Retail-29.2%Implied UpsideTo

25、p PickCVS HealthTicker: CVS Rating: Overweight78%Dec-21 Price Target: $102Rationale:Play on key theme, with path to accelerating growth and attractive valuationWe believe CVS is one of the best positioned companies across our coverage universe over the longer termIntegrated model and broad suite of

26、services position CVS well in an evolving marketplace characterized by the ongoing “retailization” of healthcare and shift to new reimbursement models (value-based care)CVS brings a unique integrated model to marketplace. Combined entity to drive lower overall health costs through data/analytics, mo

27、re effective patient engagement and shifting care to lower cost sitesCVS previously provided a favorable outlook for next several years, with a return to double-digit EPS growth in 2022 driven by integration synergies, enterprise modernization and transformation initiatives.We believe recent underpe

28、rformance has been driven by two key factorsUncertainty around the 2021 OutlookWhat is the appropriate jumping off point for 2021 adjusted EPS given some of the non-recurring benefits and headwinds in 2020?The current Street range for 2021 adjusted EPS is currently widePer Bloomberg, the range is $6

29、.21-$7.75, with a mean of $7.48We believe CVS should be able to deliver adjusted EPS in the range of $7.40-$7.50Our FY21 adjusted EPS estimate of $7.40 is generally conservative, and implies 3.6% y/y growthUncertainty around the ElectionA potential Democratic sweep of the White House, House and Sena

30、te could be a potential risk for health insurers, given the potential for more sweeping legislationHealth insurance business could be negatively impacted by Medicare-like public health plan optionHowever, if Republicans can retain control of White House and/or Senate, that would minimize likelihood

31、of significant reformInvestor feedback: Why own it today when we can have clarity on both issues in November (CVS is currently scheduled to report 3Q20 results on November 6)?We believe CVS is very well positioned based on evolving market dynamicsNew reimbursement modelsWe expect ongoing interest fr

32、om all stakeholders in value-based models that tie reimbursement to health outcomesCVS has a broad suite of assets across the care continuumAccess to high-quality, lower-cost sites of careEnhanced clinical care programsWe expect the company to be a partner of choice for payors and providers over the

33、 longer termThe “retailization” of healthcareWe continue to believe the consumer will be the single largest disrupter in healthcarePatients (consumers) are getting more involved in their healthcare and making decisions on how to allocate healthcare dollarsCVS owns the patient touchpoint pharmacy is

34、the most frequently used health benefitThe companys strong reputation and trusted brand will be key assetsCVS is the first company to combine each of the five following capabilities in-house:CVSUNHCIWBAANTMHUMRetail PharmacyPharmacy Benefit ManagementHealth InsuranceSpecialty PharmacyRetail-Based Cl

35、inicsSource: J.P. Morgan. Note: WBA exiting wholly-owned clinic business, although health system partners to continue to operate clinics in Walgreens stores; WBA also has clinic10relationships with United (urgent care) as well as Humana and VillageMD (primary care).We continue to believe in the stra

36、tegic rationale for the Aetna dealLeverage medical, pharmacy and lab data in real timeUse analytics to identify members with opportunity for targeted interventionsClose gaps in care, improve medication adherence and better coordinate careImprove member engagement to drive behavior changeCVS owns the

37、 patient touchpoint through its broad retail footprintPharmacy is typically the most frequently used part of a patients healthcare benefitDrive patient care to lower cost settings using existing assetsUtilize retail-based clinics to reduce ER visitsMove infusion services out of the hospital settingC

38、apitalize on emerging telehealth opportunityThis Can Ultimately Drive:Improved quality of care Better patient outcomes Lower overall healthcare costsWe believe all this should ultimately help drive profitability for the combined entityCVS provided favorable commentary on the long term outlook at the

39、 June 2019 Investor DayCVS highlighted several key factors underlying the anticipated acceleration in earnings growth, including: integration synergies, enterprise modernization and transformation initiativesIntegration Synergies:2019: $300-$350M, 2020: $800M2021+ run rate: $900M business integratio

40、n general & administrative medical cost savings$900$3.5B in Operating Income in 2022$850Transformation Initiatives: 2022: $850M, Longer term: $2.5B medical cost savings, membershipgrowth, expanded use of CVS assets, increased customer satisfaction/retention, open platform/new business$1,750Enterpris

41、e Modernization:2020: $400-$600M, 2021: $900M-$1.1B, 2022 run rate: $1.5-$2.0Btechnology modernization, productivity improvementsSource: Company reportsTicker: LHRating: OverweightDec-21 Price Target: $227LabCorp25%Teladoc HealthTicker: TDOC Rating: Overweight40%Dec-21 Price Target: $266McKessonTick

42、er: MCK Rating: Overweight32%Dec-21 Price Target: $198AmerisourceBergenTicker: ABC Rating: Overweight21%Dec-21 Price Target: $114Source: Bloomberg (prices based on 9/11/2020 close), J.P. Morgan estimates.13LabCorp (LH/OW)In the clinical lab space, we continue to favor LabCorp (LH: OW) given its diff

43、erentiated positioning across two areas of healthcare (diagnostics + drug development).COVID-19 testing has been a positive, helping to offset traditional testing volumes.Managed care shifts are no longer a headwind for LH, and UNHs Preferred Lab Network represents an opportunity for future share ca

44、pture as it ramps over time.We remain positive on the strength in the drug development business over time.We believe LH is well positioned to capture the shift to consumerism, expanding its partnership with Walgreens to 600 doors across the US over the next 4 years. LH has spoken to increased volume

45、 at these patient service centers with 28% of patients seen at Walgreens locations new to LabCorp.LabCorp continues to deploy capital in a shareholder friendly way, with $900M remaining on the companys authorization. In 2019, the company invested $876M in acquisitions, and repurchased$450M of stock.

46、Relative valuation continues to favor LH, despite 40% of revenue derived from the CRO growing more rapidly and CROs generally garner a higher multiple.Teladoc Health (TDOC/OW)We point to a significant amount of runway in the core telehealth market; COVID-19 has proven to be a catalyst to drive incre

47、ased utilization of telehealth more broadly.Teladoc Health has a strong competitive positioning as the largest player with a significant first-mover advantage and the only comprehensive virtual care delivery solution.We highlight a diversified set of growth opportunities adding new clients/lives, dr

48、iving utilization, adding new specialties/technologies, expanding the geographic footprint.We view the Livongo transaction very positively as it will bring remote monitoring of chronic disease patients to TDOCs robust platform, strengthening the companys competitive moat; minimal customer overlap dr

49、ives significant cross-sell opportunity.We point to several opportunities to drive incremental growth over the next few years, including the ongoing CVS rollout, growing the UnitedHealthcare relationship and further expanding in the Medicare and Medicaid markets.The recently-closed acquisition of In

50、Touch Health created a leading provider of integrated virtual care across care settings, including inside the four walls of a hospital, and expanded the addressable market by $10B.McKesson (MCK/OW)An aging population and increased utilization of prescription drugs should continue to drive solid top-

51、line trends for the pharmaceutical distributors broadly, while MCK is benefiting from growth at key customers, including CVS.The underlying pharma distribution business is stabilizing, with branded inflation in line with expectations (mid-single digits), and the generics market is behaving in line w

52、ith their expectations (the company is sourcing effectively and the sell side is competitive but stable).We continue to point to opportunities across the companys specialty business, which includes provider solutions (specialty distribution), practice management (U.S. Oncology) and life sciences (ma

53、nufacturer services).The Canada reimbursement headwind has cycled, with MCK seeing nice improvement in that business, and while the UK remains a headwind, MCK is focused on actions to stabilize and grow the business and is encouraged by the NHS pharmacy framework.A strong balance sheet and cash flow

54、 provide a high degree of flexibility for accretive capital deployment (M&A or share repurchase), and we believe the company should be better able to absorb potential opioid settlement payments.Valuation is attractive, with shares trading at a discount vs. the average of the two peers on a forward P

55、/E basis and at a significant discount to the S&P 500.AmerisourceBergen (ABC/OW)An aging population and increased utilization of prescription drugs should continue to drive solid top-line trends for the pharmaceutical distributors broadly, while ABC is benefiting from growth at key customers, includ

56、ing WBA and ESI mail delivery.The underlying pharma distribution business is stable, with branded inflation in line with expectations (mid-single digits), and the generics market is behaving in line with their expectations (the company is sourcing effectively and the sell side is competitive but sta

57、ble).ABC has the largest specialty distribution business and has benefitted from the growth in oncology. This is a margin-enhancing business thanks to the sale of higher-margin services to the physician office.A strong balance sheet and cash flow provide a high degree of flexibility for accretive ca

58、pital deployment (M&A or share repurchase). Currently net debt positive. We believe the company should be able to absorb potential opioid settlement payments.While trading at a premium to peers, ABC is a pure play on drug distribution and has historically met or exceeded expectations.What is the Imp

59、act from COVID-19 Across Our Coverage?Potential Impact to Our Coverage from Regulatory Changes?Opioid Exposure for Distributors/Timing of a Potential Settlement?Thoughts on the Fundamental Backdrop for Distributors?Potential for New Regulations to Drive PBM Business Model Changes?What Are the Puts a

60、nd Takes Driving Clinical Lab Growth?Thoughts on Teladoc Health / Livongo Deal?What Is Driving Our Positive View on One Medical?Impact across the Rx Channel Pharmacy Per IQVIA weekly data, total Rx volume remains down on a y/y basisNew to brand and acute scripts have declined on a y/y basis, due to