JP Morgan Healthcare Conference - Day 1 Analysis: China and Merck

While unable to attend the JP Morgan Healthcare Conference in person, we leveraged the Amenity Viewer platform to keep tabs on the company presentation transcripts, apply our text analytics on the sentiment, and look for meaningful comments on two key themes that we have been monitoring:

1. China macro

2. Merck margin pressures after our “Deception”analysis signaled risk on the Q3 earnings call

We will continue to monitor presentations over the next couple of days to draw more insights. 

Please note: This in no way represents investment advice. All transcript text provided by S&P Global Market Intelligence.

JP Morgan Healthcare Conference: China Bulls Intact, Merck Acknowledges Challenges

China commentary remains bullish, in contrast to macro headlines and Apple

We used the Query Insights feature to identify only the meaningful comments relating to China and tariffs, rather than having to parse through more than 100 results that would come through a simple Ctrl-F on a browser window.  

  • Varian Medical Systems:

"China, despite some of the saber rattling in the newspapers and trade issues, we continue to see very strong market in China."

  • Illumina:

"I would say Q4 largely played out as we expected. And from a demand standpoint in China, which I think is the more important indicator, we don’t see an impact tariff-wise. It’s really been more of accelerating some orders from Q4 into Q3 and Q2."

Merck downticks vs Q3, more openly discusses headwinds

In our December 20 post, we highlighted risk to Merck’s margin outlook through the lens of our Deceptive Language analysis.  At the JP Morgan Conference, we got a clearer look into headwinds validating that risk.  While conference presentations typically skew positive due to the softball nature of the Q&A, Merck led off with a cautionary note, resulting in an Amenity Score of the transcript of 27, down from 49 on its Q3 earnings call.

  • Merck:

"I think ’19 is a very exciting year.  We’ve got these growth drivers, including oncology. I think we need to acknowledge, though, at the same time there’s some challenges,okay.  I mean, obviously, pricing is a challenge not just for Merck but across the industry.  And again, it underscores why being an innovating company is so important.  We’re going to face more headwinds as it relates to ForEx."

"There will be challenges with respect to the more mature and the LOE part of our portfolio with SIMPONI in Europe, for example, having to deal with generic HUMIRA."

"Within the United States, JANUVIA facing additional problems with respect to the doughnut hole calculation."

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Transcript text provided by S&P Global Market Intelligence.

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