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5 Healthcare Stocks Poised to Trump Q3 Earnings

The past few months have been pretty rough for the healthcare sector, with the drug pricing issue taking the center stage once again. This time, it was the massive price hike of Mylan N.V.’s (MYL) severe allergy treatment, EpiPen that sparked controversies. With no possibility of dying down any time soon, the company has drawn flak from lawmakers, consumers and the common people alike.

Presidential candidate Hillary Clinton’s tweet on the issue made matters worse, which was followed by her proposal of a health care plan to keep drug prices under control, protect consumers from unjustified drug price hikes and increase the accountability of drug manufacturers.

Deals, Product Approvals & Zika Virus

Despite all these negative developments, mergers and acquisitions, and licensing deals continued to make it to the headlines. German drug maker, Bayer AG and U.S. seed behemoth Monsanto Company have finally reached an agreement under which the latter will be acquired by the former in an all-cash deal valued at about $66 billion. While biotech company Horizon Pharma plc acquired California-based Raptor Pharmaceuticals Corp., Pfizer Inc. (PFE) took over oncology-focused company Medivation, Inc. for approximately $14 billion.

Allergan plc (AGN) continued with its acquisition spree. In Oct 2016, Allergan announced the intention to acquire Motus Therapeutics, Inc., a wholly-owned subsidiary of Rhythm Holding Company. The acquisition should be completed by the year end. Note that Allergan announced a string of small bolt-on acquisitions in Sep 2016 to expand its presence in the highly lucrative non-alcoholic steatohepatitis space.

Collaborations between large-cap and development-stage companies are being seen mostly in the immuno-oncology space, and to some extent in other therapeutic areas like autoimmune and cardiovascular.

Additionally, new product approvals, along with the label expansion of existing drugs and regular pipeline updates kept investors glued to the sector. While Eli Lilly and Company gained accelerated approval in the U.S. for Lartruvo, in combination with doxorubicin, for the first-line treatment of soft tissue sarcoma, Sarepta Therapeutics, Inc. received a huge boost with the same for Exondys 51 for the treatment of Duchenne muscular dystrophy.

Meanwhile, Roche Holding AG’s immuno-oncology drug Tecentriq was granted FDA approval for an additional indication, this time for the treatment of metastatic non-small cell lung cancer.

Let us now come to biosimilars, which are being touted as the next big thing in the health care sector. Among the approved biosimilars in the U.S. are Novartis AG’s Erelzi (a biosimilar version of Amgen Inc.’s Enbrel), Amgen’s Amjevita (a biosimilar version of AbbVie Inc.’s Humira) and Celltrion, and Pfizer’s Inflectra (a biosimilar version of Johnson & Johnson’s Remicade). In late November, Pfizer is expected to launch Inflectra in the U.S.

Meanwhile, the widespread outbreak of the...