![]() ![]() While demand is relatively inelastic for Biogen’s portfolio of MS treatments, the commercial failure of Alzheimer’s drug Aduhelm demonstrates the high-risk nature of some of Biogen’s pipeline targets, and our Morningstar Uncertainty Rating for Biogen is therefore High.” “Biogen’s profitability depends on three key blockbusters (Avonex/Plegridy, Tysabri, and Spinraza) and a high-risk, but potentially high-reward pipeline, led by recently approved Alzheimer’s disease drug Leqembi. While Rituxan is succumbing to biosimilar competition, Biogen is expanding its neurology portfolio beyond multiple sclerosis, including blockbuster neuromuscular disease drug Spinraza and several promising drugs, including Leqembi in Alzheimer’s disease.” Biogen’s strategy has its roots in the 2003 merger of Biogen (multiple sclerosis drug Avonex) and Idec (cancer drug Rituxan). “We think Biogen’s specialty-market-focused drug portfolio and novel, neurology-focused pipeline create a wide economic moat. ![]() We project 3% average annual top-line growth through fiscal 2027, as procedure volume returns and stabilizes closer to prepandemic levels over the next 18 months.” “Overall, we now include the following in our assumptions for Medtronic: a more gradual resumption of prepandemic procedure volume in fiscal 20, hospital labor constraints that will prevent significant expansion of capacity through the midterm, and the anticipated launch of renal denervation by early 2024. Medtronic has historically focused on innovation, designing and manufacturing devices to address cardiac care, neurological and spinal conditions, and diabetes.” Pairing Medtronic’s diversified product portfolio aimed at a wide range of chronic diseases with its expansive selection of products for acute care in hospitals has bolstered its position as a key partner for its hospital customers. ![]() “Medtronic’s standing as the largest pure-play medical device maker remains a force to be reckoned with in the medtech landscape. “We’re holding steady on our fair value estimate of this defensive stock at $175 per share, which reflects our expectation that more normal procedure volume will be able to flow through after 2022 thanks to widespread vaccinations and some level of COVID-19 immunity acquired by extensive infection by previous variants.” The learning curve to become proficient in using one company’s instrumentation is significant.” The extensive instrumentation, or tool sets, used to prepare bones and install implants are specific to each company. First, there are substantial switching costs for orthopedic surgeons. “Zimmer’s wide economic moat stems from two major sources. The latter is critical, in our view, to realizing the firm’s potential.” “Second, the firm aims to accelerate growth through innovative products and improved execution. High switching costs and high-touch service keep the surgeons closely tied to their primary vendor, and the surgeons bring in enough profitable procedures to keep hospital administrators at bay.” First, it is focused on cultivating close relationships with orthopedic surgeons who make the brand choice. Keonhee Kim, equity analyst Zimmer Biomet Holdings For Research and Development solutions, we expect revenue growth to soften but we still expect a very strong growth for this defensive stock in the healthcare industry over the next five years with a revenue CAGR of 22%.” “We expect the commercial business to grow at a modest to high single-digit rate over the next five years. “We assign Veeva a wide moat rating because we believe the firm’s high retention rate and its customers’ unlikeliness to move to a different product (switching costs) should continue to support economic profits for at least the next 20 years.” Instead of focusing on a general, one-size-fits-all system, Veeva has created platforms that are purely designed to serve one industry.” ![]() It provides an ecosystem of products to address the operating challenges and regulatory requirements that companies in the space face. “Veeva is the leading provider of cloud-based software solutions tailored to the life sciences industry. ![]()
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