biotechnology - 2016 outlook - 01.07.16.pdfVIP

January 7, 2016 Americas: Healthcare: Biotechnology Equity Research 2016 outlook: Selectivity is key; 5 themes to drive performance 2015: 2H headwinds tempered another year of outperformance MODEL AND 12-MONTH PRICE TARGET CHANGES In 2015, biotech sector performance was above that of the SP (NBI +11% vs. SP -1%) and was driven by roughly half the stocks (98 of 175 NBI Price EPS target Rating 2015E 2016E 2017E 2018E 2019E companies ended the year in positive territory). A large-cap 2Q miss and AGIO New $72 Neutral ($2.26) ($4.59) ($5.51) ($7.91) N/A macroeconomic concerns pressured stocks starting in late-July followed by Old $84 Neutral ($2.26) ($4.63) ($5.62) ($8.05) N/A ALKS New $57 Neutral ($1.61) ($1.13) ($0.12) $0.58 N/A fears on drug pricing in September. But the NBI subsequently recovered Old $57 Neutral ($1.62) ($1.15) ($0.44) $0.53 N/A ALXN New $199 Neutral $4.94 $5.21 $7.40 $10.05 $11.49 17% from the September 29 low. Old $197 Neutral $4.94 $5.20 $7.