E Global Roundup: Roche, Vale, Novo Nordisk, Teva, Benitec Et Al

 It is a low news day because everyone is still rubbing their eyes after the Third Debate. But we have two company reports all the same.

*Roche reported sales up 4% in constant exchange rates and 6% in Swissies today thanks to its immunology and cancer drug gains. It successfully launches cobas e801, a rapid immuno-diagnosis module. Dow Jones rated RHHBY the most sustainable healthcare company for the 8th year in a row.

CEO Severin Schwan reconfirmed its outlook for 2017 and lauded its continuing success with Tecentriq against cancers, now given FDA approval for treating metastatic non-small cell lung cancers as well as advanced bladder cancer. It joins existing medicines Herceptin and Perjeta against HER2+ breast st cancer, and immunology treatments Actemra, Acivaste, Xolair, and Esbriet.

However the expected drop in sales of Tamiflu and eye meds kept sales growth back. Pharma sales hit CHF 29.14 bn in the first 9 months.

Diagnostics are the RHHBY special sauce and there sales grew 7% to hit CHF8.365 bn, up 7% from a smaller base with a lot of growth in Asia. Schwan cited “challenging market conditions” in diabetes care in the US. More on this and drugs below.

*JP Morgan analysts have downrated Banco Latino-Americano de Comercio of Panama to hold from overweight. It fell over 8% in reaction to this and its meh results reported yesterday afternoon. While Q3 income was off only $1 mn at $43.4 mn loan loss provisions soared to $11.5 mn from only $2 mn in the last Q3. Despite cost controls net profits came in at $22.3 mn, off by over a third, at 57 cents/sh vs 96 cents. The eps missed analyst forecasts by 13 cents.

Moreover, return on equity, a key banking metric, was also down by over a third and return on average assets fell to 1.2% from prior year's 1.85%. For whatever it is worth, profits did rise 26% sequentially and credit quality remained more or less stable. Part of the problem is syndication profits which can be lumpy and CEO Rubens V. Amaral said several transactions will close in the current quarter. BLX is using floating rate business to cut interest rate and currency risk (Panama operates in US$) using short term funding and deposits to finance its loans. BLX yields 5.3% which is why I am buying more for my yield portfolio as the board maintained the dividend before reporting results.

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James Hanshaw 1 year ago Contributor's comment

NVO dropped 15% on Friday 28th!!

Vivian Lewis 1 year ago Author's comment

thanks for your reply, Mr. Hanshaw. The reason was that NVO reported good numbers but that then the new CEO also issued a warning that US profits would be lower in the 4th quarter. That took Novo down in its Danish homeland.

Then, as we all know, the FBI said it was looking into more Hillary Clinton-linked emails and the US market sold off. I was not on the job because I had to go to a cousin's funeral but I will be writing about Novo-Nordisk results and outlook on Monday when I am back at my desk.

The Bloomberg Businessweek article was about insulin used to treat children who have diabetes. The main reason I recommend Novo is that it is a specialist in other forms of insulin to treat old-adult-onset diabetes and also associated weight gain, a growth drug market not just in the US but also in many other countries which are now rich enough so people can over-eat foods that are not good for their health. The diabetes epidemic is most rapidly spreading in formerly poor countries with a taste for sweets, like Mexico, India, and even China.

So unfortunately for peoples' health but fortunately for Novo which is a specialized drug company whose products are mostly for diabetes the insulin and replacements market is growing fast.