File 014523
Email: Healthcare Sector Investment Analysis and Stock Recommendations (File 014523)
Email correspondence from Richard Kahn at HBRK Associates forwarding healthcare investment analysis from Bank of America Merrill Lynch, including sector recommendations and stock picks for 2017.
Summary
Richard Kahn forwards to Jeffrey Epstein an email from Amanda Ens containing Bank of America Merrill Lynch's 2017 US Healthcare Year Ahead analysis. The report provides investment recommendations across multiple healthcare sub-sectors including biotech, specialty pharma, medical devices, and hospital facilities, with analysis of how potential ACA repeal and Trump administration policies might impact valuations. Specific stock recommendations are provided for each sector category.
From:Sent:To:Subject:Attachments:Importance:Richard Kahn12/15/2016 5:46:20 PMjeffrey E. [jeeyacation@gmail.com]Fwd: US Healthcare Year Ahead...Buy ACAD, AGN, ANTM, CELG, CVS, DHR, EW, EVHC, RARE, REGN, WBAimage001jpg01D256A2F263C080.jpg; image001gif01D256C23AC52B10.gifHighattached are equity healthcare ideasRichard KahnHBRK Associates Inc.575 Lexington Avenue 4th FloorNew York, NY 10022telfacell________________________Begin forwarded message:From: "Ens, Amanda"Subject: US Healthcare Year Ahead...Buy ACAD, AGN, ANTM, CELG, CVS, DHR, EW, EVHC, RARE, REGN, WBADate: December 15, 2016 at 10:59:39 AM ESTTo: "Rich Kahn" __________Reply-To: "Ens, Amanda"The US team is out with their 2017 Year Ahead this morning (link) running through ALL sub-sectors with each analyststop pick into the new year.op Picks — ACAD, AGN, ANTM, CELG, CVS, DHR, EW, EVHC, RARE, REGN, WBAWashington DC BackdropGiven the clean sweep by the GOP & uncertainty around the ACA, key attention is paid by Andy Bressler to a review ofthe various scenarios that could play out early next year. With a repeal likely to happen well before a replace(essentially via the Budget Reconciliation process in Jan/Feb), Andy notes this is likely to include a repeal of bothhealth insurance exchange subsidies & a phase-down of Medicaid expansion funding (albeit with a two or three yeartransition period).He also expects a repeal of many of the larger HC related taxes in the ACA, including the HIX ($14.3bn in 2018),Medtech Tax (2.3%), pharma industry tax ($4.1bn in 2018) & Cadillac tax (effective 2020).As for the views by analysts...Biotech (+) — believe sector will outperform largely as pricing risk has diminished (although will remain in pockets) butpipelines/growth remains. Ying's top picks are CELG & REGN; Tazeen's top picks are kCAD & RARE.Spec Pharma (-) — headwinds remain w/ Sumant's top pick AGN given lower risk to reimbursement pressures & anunderappreciated pipeline. Leverage & CF remain the key focus for investors.Tools/Animal Health (=) — Derik notes more "headline" than "real" risks from policy which will create opportunities for agroup growing MSD, although valuations remain above peers. (US 1 name) top pick, also A, ZTS in AnimalHealth, in Diagnostics & in Services.Medtech (=) — Hopkins' expects a mixed bag in 2017 w/ stocks trading close to 5yr valuation lows; EW top pick givenbest growth / purest innovation story.HOUSE OVERSIGHT 014523Facilities (-) — Fischbeck notes that uncertainty will remain an overhang for hospitals as repeal/replace a negative forthe group (est losing 2-3mm Medicaid lives & 2-3mm exchange lives would be a 1-2% EBITDA hit on avg). Focus oncompany-specific stories likeMCOs (+) — Fischbeck generally +ve under Trump (especially around MA given historical support from GOP) w/tailwinds from corporate tax & rising rates. top pick in given valuation & tailwinds.Distribution/Tech (=) — Valiquette prefers pharmacies ,,,'VS/WBA given benefits from decelerating generic prices(which will remain an overhang for Distributors). HHS appointment a —ve for HCIT.Daniel LundquistHealthcare Specialist SalesGlobal EquitiesBank of America Merrill LynchOne Bryant Park I New York, 10036 I United StatesT: M:The power of global connections TMBankofAmerica"1-0;frMerrill LynchFind all Conference Events via the Following Link: https://gems.bankofamerica.comDisclaimer:This material was prepared by Sector Specialist Sales personnel of Merrill Lynch and is subject to the terms availableat the following link: http://corp.bankofamerica.com/business/smb/landing/emaildisclaimer/americas/global-marketsThis message, and any attachments, is for the intended recipient(s) only, may contain information that is privileged, confidential and/orproprietary and subject to important terms and conditions available at http://www.bankofamerica.com/emaildisclaimer. If you are not theintended recipient, please delete this message.This message, and any attachments, is for the intended recipient(s) only, may contain information that is privileged, confidential and/orproprietary and subject to important terms and conditions available at http://www.bankofamerica.com/emaildisclaimer. If you are not theintended recipient, please delete this message.BankofAmerica*Merrill LynchHOUSE OVERSIGHT 014524