Frank Curzio
Founder & CEO of Curzio Research, Wall Street Unplugged Host
Regeneron is ridiculously cheap at 9.5x 2028 EV to free cash flow, versus 13x for Bristol Myers Squibb and 16x for Merck. @PCM_bio counters that its pipeline is weaker than those peers', but Regeneron has only about a third of their revenue. x.com x.comÂ
Bristol Myers Squibb and Merck look expensive given the market's optimism about their patent cliffs. Bristol Myers trades at 13x and Merck at 16x 2028 EV/FCF, versus Regeneron at 9.5x, which is ridiculous. As @PCM_bio notes, Opdivo loses exclusivity in 587 days and Bristol has done little to address that or its other patent expirations. x.com x.comÂ
Regeneron no longer meets the return threshold for a non-defensive holding. Its exponential growth ran from the financial crisis to the mid-2010s and has not worked since, and it pays almost no dividend. Unlike gold, oil or safety holdings, it needs to deliver strong returns to justify its place, though it may regain its momentum within five years. x.com x.comÂ
AI biotech names such as Tempus AI, Recursion, Ginkgo Bioworks and Prime Medicine could become the new home for money rotating out of AI and semiconductor leaders, with Moderna and Merck's positive phase 3 melanoma results for their mRNA neoantigen therapy a possible catalyst. Sentiment toward AI in healthcare should be far warmer than toward job-displacing AI, since everyone faces disease, and could top the semis trade. Indices could chop or fall while these biotechs outperform. x.com x.com … Show more
Sanofi is a strong buy at about $46 because Dupixent looks more durable than the market assumes, and the stock trades at roughly a 40% discount to the industry. Dupixent, about 40% of revenue, beat expectations by 8%, and Sanofi argues biosimilars won't arrive before 2033 rather than 2030, with a monthly version due around 2030 to extend the franchise. Sales beat by 3%, EPS by 6%, and 2026 guidance was reaffirmed. The main threat is Apogee's rival drug dosed twice a year. x.comÂ
Amgen is a large-cap healthcare pick for its pipeline, which holds interesting developments, and an upgrade cycle that is starting. x.comÂ
AbbVie's terminal value is a concern: it has had big autoimmune hits to backfill Humira, yet it still trades at 19x forward earnings on a $450B market cap, while Johnson & Johnson's 2024-25 acquisition spree is paying off. x.comÂ
Small- and mid-cap biotech looks like one of healthcare's more asymmetric setups after a four-year bear market, as AI speeds drug discovery and Big Pharma faces a patent cliff. Over $300B of pharma revenue goes off patent in the next few years, M&A is already ramping hard as pharma hunts for assets, and many small and mid-cap names still trade at reasonable valuations, making them potential takeover targets. x.comÂ
Biotech stocks are breaking out of a five-year range because the threat from oil and interest rates was priced in years ago. Many of the most undervalued growth stocks are now in biotech, and research discovery is getting a boost from AI, making it perhaps the sector with most to gain from AI productivity. Charts support it: daily volume spikes have tended to mark major bottoms, the weekly held its quarterly averages to form a base, and the monthly shows a healthy pullback to the one-year EMA. … Show more
Biotech, including Thermo Fisher, Eli Lilly, Intellia, CRISPR, Illumina and NeoGenomics, stands to gain as AI-trade capital rotates out of infrastructure, since healthcare is the largest market AI has yet to disrupt. AI hardware is worth about $14 trillion versus $1.4 trillion for biotech, so a 2.5% rotation could, at 5x inelasticity, put $1.75 trillion of pressure on biotech. Capital isn't leaving the AI trade; the equal-weighted S&P 500 is at all-time highs. x.com x.comÂ