GSK initiated with a Reduce at HSBC

HSBC analyst Rajesh Kumar initiated coverage of GSK with a Reduce rating and 1,190 GBp price target. The analyst initiated coverage on 19 U.S. and E.U. Biopharma names saying the sector players will have to compete for deals in a “shrinking pool” as the larger players grapple with loss of exclusivity on their drug portfolios. While the market focus remains on LOEs and pricing discussion, HSBC seeks opportunities created by the tailwinds from demographics, innovation and low valuations, the analyst tells investors in a research note. The firm’s preferred plays in the space are “quality growth” names Eli Lilly, Novo Nordisk, AstraZeneca, and Genmab, “fallen angels” Roche, Merck Kgaa and Lonza, and “value” stock Pfizer, and “self-help” companies Novartis and Sanofi. HSBC’s least preferred names are Bristol Myers Squibb, GSK, Moderna and Bayer.