生命科学与诊断：关于下半年COVID-19诊断检测、疫苗生产的最新想法

1、North America Equity ResearchSeptember 2020Life Science Tools & DiagnosticsLatest Thoughts On the Group & COVID-19 Diagnostic Testing/Vaccine Manufacturing Landscape into 2H20Including Incoming Questions & Data Points of Relevance to Our Coverage UniverseLife Science Tools & Diagnostics, SMid Medica

2、l TechnologyTycho Peterson AC+1 212 622 6568 HYPERLINK mailto:Tycho.peterson T HYPERLINK mailto:ycho.peterson ycho.petersonJ.P. Morgan Securities LLCJulia Qin, CFA+1 212 622 9253 HYPERLINK mailto:Julia.qin Julia.qinJ.P. Morgan Securities LLCEleni Apostolatos+1 212 622 0136 HYPERLINK mailto:Eleni.apo

3、stolatos Eleni.apostolatosJ.P. Morgan Securities LLCCasey Woodring+1 212 622 9074 HYPERLINK mailto:Casey.woodring Casey.woodringJ.P. Morgan Securities LLCBloomberg JPMA PETERSON See the end pages of this presentation for analyst certification and important disclosures, including non-US analyst discl

4、osures.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 in mak

5、ing their investment decision.In addition to our weekly COVID-19 update slides (see slide 21 onward), this week we wanted to highlight our latest thoughts on the group into 2H20, as well as recaps of some recent events.What we know about the base businesses so farWhile the majority of companies did

6、not reinstate FY guidance with 2Q results, companies that did give 3Q guidance were more optimistic about a recovery in 3Q and back half of the year, with latest company commentary signaling that a recovery in base businesses is tracking in-line. Specifically, recent commentary from TMO and AVTR (fr

7、om TMOs analyst day and respective presentations at competitor conferences) pointed to encouraging ongoing sequential recovery in base businesses, with biopharma continuing to lead the way, followed by a return to growth in healthcare, resumption in academic orders as labs reopen for the fall (and a

8、 significantly boosted research funding environment heading into 2021), while as expected, the applied/industrial end market continues to lag the broader recovery, albeit with some sequential improvement, as shown by PMI trends.For CROs, the resumption of clinical trial activity is also trending in-

9、line, levered by ongoing resumption in patient enrollment (as we show on slide 20), with the sequential improvement further highlighted by PPD raising 3Q guidance this week, due to better than expected performance on both base and COVID- related projects (increased sales guidance by $100M or 10% to

10、sales growth, and EBITDA by $10M or 6% to EBITDA growth), while 3Q net authorizations are also expected to grow y/y. Turning to pre-clinical, CRLs commentary (from a competitor conference) was also positive, pointing to a recovery across all segments, on the back of record biotech funding levels, ou

11、tsourcing increases, and no cancellations to date (with catch up work).Turning to med tech and dental names, the return of elective procedures and health of the hospital capex environment remain in focus, with commentary from ISRG (from a competitor conference) confirming the gradual rescheduling of

12、 elective procedures in 3Q, albeit with still some uncertainty on patient willingness in light of a resurgence of COVID infections in areas of the U.S. (for more color, see our robotic procedure survey) and HOLX (from our recent London All Stars conference) noting that although not at pre-COVID leve

13、ls, Breast and Gyn Surg procedures have come back “nicely” albeit with some overhang that may persist as more women are still working from home. Turning to dental, NVST (from a competitor conference) also noted improving trends, with 90-95% of dental offices having opened and patient volumes gradual

14、ly ramping back up per latest industry surveys.What we know about COVID tailwinds into 2H20/2021, both in terms of diagnostic testing and therapeutic/vaccine production workStarting with the diagnostic testing landscape, commentary from HOLX was extremely positive, as the company recently raised F4Q

15、 pointing to a massive beat (range raised to between $1.225B-1.275B, above previous guidance of $925M-1.025B and well above consensus of $989.0M) tied to increased COVID-19 Dx volumes and subsequent scale-up of manufacturing of its automated high-throughput Panther assays. Our two KOL calls from yes

16、terday (9/17), among other key data points, pointed toward high-throughput PCR testing as the preferred method to test both symptomatic and asymptomatic patients both in large reference labs and smaller hospital labs (vs. a lot of the noise surrounding rapid antigen). QGEN at its NDR also noted that

17、 testing demand will remain strong through 1H21. While it will decline with vaccine availability (in 2022), it wont go down to zero. Antigen testing will cause some cannibalization into PCR testing, but wont replace PCT given strong demand. Importantly, QGENs COVID-19 testing solution is comprehensi

18、ve and diversified across manual and automated solutions. Demand for sample prep solutions (in manual testing) will also persist despite growing availability of automated systems, as LDTs remain a massive source of capacity.Turning to the vaccine opportunity, major bioprocessing companies (TMO, CTLT

19、, SRT) have updated near-term guidance for vaccine/therapeutic tailwinds, but many remain highly conservative due to uncertainties around pipeline attrition and commercial scale-up. Looking beyond near-term guidance, we see a few key questions outstanding for sizing the longer-term opportunity, incl

20、uding how to think about pipeline attrition and commercial scale-up of candidates that succeed in obtaining approval, how long the vaccine time window will last, and how companies will deploy capacity post-pandemic.In terms of CROs, ramping COVID projects remain in focus, on the heels of PPD raising

21、 3Q guidance partly due to better than expected performance on COVID projects (with 3Q net authorization also expected to increase y/y), although we note that PPD also had seen the greatest percentage of COVID bookings within 2Q net awards (PPD 25% vs. ICLR 20%, IQV mid-teens, SYNH 5%).What does it

22、take for tools to work into 2H20 and what are our best ideasTools continue to trade at a premium to healthcare sub-sectors (33x NTM P/E and 21x NTM EV/EBITDA), with the group outperforming both XLV and S&P indexes despite peak multiples out of 2Q, on the back of incrementally positive commentary (vs

23、. muted expectations), hopes for a 2H recovery (with 3Q guidance beating expectations for companies that have guided, i.e. TMO) and a growing focus on COVID tailwinds (molecular and serology testing, vaccine and therapy supplies and manufacturing).As a result of ongoing volatility and elevated valua

24、tions, we continue to recommend select exposure, with our top picks for 2H largely unchanged from our views heading into 2Q results, i.e. diversified core tools companies (AVTR, DHR, TMO), best-in-class CROs/CDMOs (CRL, CTLT, IQV, PPD) and several smid cap growth stories (ADPT, GH, TXG, NTRA).A word

25、 on ILMN (see more on slide 10):According to a Bloomberg report on Wednesday morning, ILMN is said to be nearing a deal to acquire privately-held Grail for $6B, with potential deal announcement as soon as this week. The rumored deal has not been received well by the market ($20B in market cap lost f

26、or ILMN over the past two days) for obvious reasons.At a valuation of $6B (vs. $4B in the last private round) for a company with no revenues and no commercialized product/service until next year, the deal would be significantly dilutive, in addition to the challenges of competing with other ILMN cus

27、tomers (Guardant, Thrive, Freenome, etc.) in a rapidly evolving, highly competitive and well-capitalized liquid biopsy market, something the company previously had to do when it entered the NIPT space by acquiring Verinata in 2013.Stepping back, while this may have just been a trial balloon, i.e. ba

28、nkers floating a story to gauge the market reaction, and there are reasons to believe that ILMN could be interested, i.e. existing 14% ownership stake in Grail, in-depth knowledge/employee overlap (Alex Aravanis, ILMNs CTO, recently re-joined from Grail, while Mostafa Ronaghi from ILMN is on the Gra

29、il Board) and most importantly, ILMN has struggled with a content strategy, while many companies (CLIA labs and others) have built highly profitable, well capitalized businesses leveraging its technology, we nonetheless see a deal as unlikely, given the factors above.That said, while an outright dea

30、l would make little sense, in our view, as few investors want to see ILMN take on leverage (which it would likely have to do, given $2.1B net cash) for the $6B acquisition, there is potential for an alternative structure, such as a larger equity stake, similar to when Roche bought Genentech (which t

31、ook ten years) and Foundation Medicine, although again, to be clear, we view a deal as unlikely, especially when one considers that as a key supplier to Grail, ILMN is already set to participate in the companys potential success via HSD royalties, ongoing sales and the14% equity stake.Lastly, it is

32、worth noting that while ILMN has not made any public comments, the company may be legally constrained, given the recent Grail S-1 filing.3Tycho Peterson HYPERLINK mailto:tycho.peterson tycho.peterson +1 212 622 6568Julia Qin, CFA HYPERLINK mailto:julia.qin julia.qin +1 212 622 9253Links to recent re

33、ports/KOL callsCOVID-19 Updates/Surveys/KOL Calls COVID-19 Updates/Surveys/KOL CallsCompilation of our work around COVID-19 and other can be found below:COVID-19 weekly highlights: Since the beginning of the outbreak, we have put together a weekly compilation of our thoughts on the evolving landscap

34、e of COVID-19 and the pandemics impact on our coverage universe, which can be found here: Week 1; Week 2; Week 3; Week 4; Week 5; Week 6; Week 7; Week 8; Week 9; Week 10; Week 11; Week 12; Week 13; Week 14; Week 15; Week 17; Week 18; Week 19; Week 20/2Q Recap; Week 21; Week 22; Week 23Surveys: We ha

35、ve also conducted a number of surveys since the outbreak began, providing further insight into COVID-19s impact on our coverage universe, which can be found here: Physician Survey; Biopharma Survey; Academic Lab Survey; Hospital Capex Survey; Consumer Survey; Dental Survey. ISRG SurveyRecent initiat

36、ions: Berkeley Lights (BLI); OraSure (OSUR); and RenalytixAI (RNLX)KOL calls: We have hosted a number of recent KOL calls topical to the COVID-19 landscape; please contact us or your JPM salesperson for the replay/transcript of the below calls:KOL calls on the current state of COVID-19 diagnostic te

37、sting and outlook for the fall: Dr. Anami Patel PhD, Vice President, Genomics Operations & Development, Poplar Healthcare; Dr. Rebecca Harris, Director of the Infectious Disease Diagnostics Laboratory, The Childrens Hospital of PhiladelphiaJPM/AMP panel on COVID-19 testing: the reality from leaders

38、in the laboratory: Karen Kaul, MD, PhD , Northshore University Health System; Alex Greninger, MD, PhD , University of Washington; Esther Babady, PhD, Memorial Sloan Kettering; Chris Mason, PhD , Weill Cornell Medicine; Michael Pellini, Section 32KOL calls on COVID-19 serology testing: Dr. Stefan Rie

39、del, Associate Professor of Pathology at Harvard Medical School, Associate Medical Director of Clinical Microbiology Labs at Beth Israel Deaconess Medical Center; Dr. Kenneth Blick, Professor of Pathology, Director of Clinical Chemistry, and Director of Immunoassay/Endocrine Laboratories at the Univ

40、ersity of Oklahoma Health Sciences CenterKOL calls on NGS-based COVID-19 testing: Dr. Robert Boorstein, Medical Director of Lenco Diagnostic Laboratories, Inc; Brewster Kingham, Director of the University of Delaware Sequencing & Genotyping CenterJPM panel on next gen sequencing and the path forward

41、 for COVID-19 testing: Francis deSouza , President & CEO, Illumina; Jason Kelly, Co-Founder & CEO, Ginkgo Bioworks (and Scientific Council, Testing for America ); Othman Laraki, Co-Founder & CEO, Color Genomics; Chris Mason, Weill Cornell Medicine (and Scientific Council, Testing for America)KOL cal

42、l on spatial genomics: Dr. Simon Gregory, Professor, Duke University Medical CenterKOL calls on the roadmap to reopening universities: Dr. Stefan Riedel, Associate Professor of Pathology at Harvard Medical School, Associate Medical Director of Clinical Microbiology Labs at Beth Israel Deaconess Medi

43、cal Center; Dr. Gigi Gronvall , Senior Scholar at the Johns Hopkins Center for Health Security & Associate Professor at the Johns Hopkins Bloomberg School of Public HealthCEO calls: Lastly, we have also hosted a number of calls with CEOs/CFOs of companies in our coverage; please contact us or your J

44、PM salesperson for the replay/transcript of the below calls:A, AVTR, CTLT, CRL, GH, HOLX, ILMN, MTD, NVTA, Roche Diagnostics, VAR, WAT, XRAY4Tycho Peterson HYPERLINK mailto:tycho.peterson tycho.peterson +1 2Julia Qin, CFA HYPERLINK mailto:julia.qin julia.qin +1 2Upcoming: PKI (11/9 at 11am ET); DHR

45、(TBD); and TMO (TBD)12 622 656812 622 9253AC L O S E RL O O KA TY T DP E R F O R M A N C E5Tycho Peterson HYPERLINK mailto:tycho.peterson tycho.peterson +1212 622 6568Julia Qin, CFA HYPERLINK mailto:julia.qin julia.qin +1 212 622 9253Following the initial sell-off on the back of COVID-19 fears in Ma

46、rch, tools saw a strong recovery in 2Q, outperforming both the XLV and S&P indexesYTD Tools Relative Performance vs. S&P, XLV Indexes YTD Tools Relative Performance vs. S&P, XLV IndexesRebased price performance180S&PLife SciencesXLV1601401201008060Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug

47、-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20Note: Life Sciences S5LSTS IndexThe life science tool group saw a sell-off starting in February (in line with the broader market), driven by COVID-19 concerns (in particular, around biopharma and academic e

48、nd markets, see our past surveys here and here), deteriorating macro leading indicators and elevated valuations.That said, in conjunction with the XLV and S&P, the tools group saw a recovery in April, outperforming the indices on the back of incrementally positive commentary (vs. muted expectations)

49、, more clarity on cost out initiatives, hopes for a 2H recovery (with 3Q guidance beating expectations for companies that guided), and a growing focus on COVID tailwinds (molecular and serology testing, vaccine and therapy supplies and manufacturing), as we discuss later in the slides.Sources: J.P.

50、Morgan research, company reports, BloombergTycho Peterson HYPERLINK mailto:tycho.peterson tycho.peterson +1 212 622 6568Julia Qin, CFA HYPERLINK mailto:julia.qin julia.qin +1 212 622 9253multiple expansion unlikelyHealthcare Sub-Sector P/E Multiples Healthcare Sub-Sector P/E Multiples40P/E multipleT

51、oolsCROs/CMOsMed TechBiotechPharma35302520151050Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20Note: MedTech S5HCEP Index Biotech S5BIOT Index, Pharma S5PHARX Index Tools A/DHR/MTD/PKI/TM

52、O/W AT, CRO/CMOs CTLT/CBM/CRL/ICLR/IQVIA/SYNH/PRAHLife science tools multiples (33x NTM P/E) have reached once again all-time highs, with the group trading at a hefty premium to therapeutics, while CROs continue to trade at a relative discount to tools.While tools have generally been a “safe haven”

53、in healthcare, a risk remains that the group could become a source of funds, if investors were to increasingly favor cheaper sectors in healthcare.Sources: J.P. Morgan research, company reports, BloombergTycho Peterson HYPERLINK mailto:tycho.peterson tycho.peterson +1 212 622 6568Julia Qin, CFA HYPE

54、RLINK mailto:julia.qin julia.qin +1 212 622 9253commentary (vs. muted expectations)Estimate Revisions Estimate RevisionsEstimate Changes Since July 12020 Estimates2021 EstimatesAbsolute Percent Jul-20Sep-20Jul-20Sep-202020202120202021Analytical TechnologyAgilentA$5,190$5,251$5,618$5,662$61$441%1%Ava

55、ntorAVTR$6,054$6,116$6,417$6,500$62$831%1%BrukerBRKR$1,914$1,921$2,098$2,114$7$160%1%DanaherDHR$20,510$21,304$22,831$24,233$793$1,4024%6%Mettler-ToledoMTD$2,846$2,959$3,072$3,168$113$964%3%PerkinElmerPKI$2,895$3,225$3,128$3,432$330$30411%10%IlluminaILMN$3,504$3,097$4,239$3,933($407)($307)(12%)(7%)Th

56、ermo FisherTMO$25,701$28,685$27,802$30,764$2,984$2,96212%11%WatersWAT$2,217$2,233$2,390$2,402$17$121%1%Genetic AnalysisAdaptiveADPT$89$96$176$174$7($2)8%(1%)Guardant HealthGH$277$279$373$373$2($0)1%(0%)LuminexLMNX$378$421$403$444$42$4011%10%Pacific BiosciencesPACB$87$82$130$133($5)$3(6%)2%QuanterixQ

57、TRX$59$62$81$88$2$74%8%TwistTWST$71$81$110$121$9$1213%11%10 x GenomicsTXG$268$259$456$476($9)$20(3%)4%DiagnosticsAccelerateAXDX$13$12$35$26($1)($9)(8%)(26%)GenMarkGNMK$126$164$134$173$38$3930%29%InvitaeNVTA$258$257$464$490($1)$25(0%)5%Myriad GeneticsMYGN$644$644$691$646$0($45)0%(6%)NanoStringNSTG$11

58、0$109$149$147($1)($2)(1%)(2%)NateraNTRA$336$360$394$417$24$237%6%OraSureOSUR$151$165$170$203$15$3410%20%Oxford ImmunotecOXFD$54$57$80$80$3$16%1%QiagenQGEN$1,653$1,783$1,726$2,017$131$2928%17%QuidelQDEL$949$1,228$1,069$1,557$279$48829%46%SMid MedtechAccurayARAY$379$379$389$385$0($4)0%(1%)Dentsply Sir

59、onaXRAY$3,155$3,182$3,748$3,675$27($73)1%(2%)EnvistaNVST$2,021$2,042$2,406$2,419$21$131%1%HologicHOLX$3,056$3,460$3,523$4,235$404$71213%20%Intuitive SurgicalISRG$4,021$4,189$5,009$5,019$168$104%0%Varian MedicalVAR$3,148$3,152$3,556$3,535$5($22)0%(1%)CROsCatalentCTLT$2,920$3,042$3,196$3,572$122$3764%

60、12%Charles River LabsCRL$2,768$2,852$3,022$3,128$84$1063%4%ICON PlcICLR$2,683$2,717$3,007$3,047$34$401%1%IQVIAIQV$10,737$11,050$11,907$12,243$313$3363%3%PPDPPD$4,091$4,306$4,597$4,754$215$1575%3%Syneos HealthSYNH$4,441$4,522$4,948$5,007$81$602%1%Tycho Peterson HYPERLINK mailto:tycho.peterson tycho.p