Q1 21 Biopharma Earnings Analysis and Industry Outlook May 2021 (pdf) - EY

Q1 2021 Biopharma earnings analysis and industry outlook

May 2021

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? The views expressed by the authors are not necessarily those of Ernst & Young LLP or other members of the global EY organization.

? This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, legal or other professional advice. Please refer to your advisors for specific advice.

? This report is ? 2021 Ernst & Young LLP. All Rights Reserved.

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Q1 21 Biopharma earnings analysis and industry outlook

Q1 2021 Earnings summary

Company AbbVie Amgen AstraZeneca Biogen Bristol Myers Squibb Eli Lilly Gilead GlaxoSmithKline Johnson & Johnson Merck & Co. Novartis Novo Nordisk Pfizer Regeneron Roche Sanofi Teva

Source: S&P Capital IQ, Analyst reports

Y-O-Y Revenue 50.90% -4.20% 15.20% -23.80%

2.70% 16.10% 15.80% -9.70% 7.90% 0.20% -0.10% 6.80% 44.60% 38.3% -1.40% 1.90% -8.60%

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Company sales vs. consensus 1.30% -5.70% 4.60% -1.70% -0.70% -2.20% -5.00% -6.00% 1.40% -4.50% -0.60% 4.4% 7.10% -1.6% -0.20% 1.60% -1.60%

Change in analyst estimate for FY21 revenue 0.60% -1.60% -0.07% 0.10% -0.30% -1.50% 0.00% -0.50% 0.60% -0.40% -0.80% 0.30% -0.03% 2.2% NA 0.10% -0.01%

Y-O-Y change in EBITDA margin

2.4 pp -2.5 pp -4.5 pp -16.5 pp -0.5 pp -0.6 pp 2.6 pp -2.3 pp 2.0 pp 2.0 pp -0.4 pp -2.9 pp -3.5 pp 5.3 pp

NA 2.4 pp -2.4 pp

Q1 21 Biopharma earnings analysis and industry outlook

EPS (US$) $2.00 $2.90 $1.20 $2.70 $0.90 $1.50 $1.40 $0.30 $2.40 $1.30 $0.90 $0.90 $0.90 $10.60 NA $1.50 $0.10

EPS (%) -1.20% -7.80% 100% -66.60%

NA -7% 12% -24.60% 7% -1.60% -4.40% 15.3% 44% 86% NA -0.50% 11%

Analyst rating*

Buy Buy Buy Hold Buy Buy Buy Hold Buy Buy Buy Hold Buy Buy Buy Buy Hold

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Biopharma stock performance

? AbbVie's stock outperformed, on the back of Allergan acquisition and significant investment by Berkshire Hathaway ? Gilead was significantly impacted by COVID-19 pandemic and pricing pressure ? Both the DRG Pharma and the NYSE Arca Biotech index underperformed the S&P 500, due to uncertainty about drug pricing and

regulatory impacts on biopharma companies under the Biden administration

Stock price charts for LTM (May 2020 to April 2021)

180.0

1Q'21

160.0

140.0

120.0

100.0

80.0

60.0 May 20

Jun 20

Jul 20 Abbvie

Aug 20 Sep 20 Oct 20

Merck & Co.

Eli Lilly

Nov 20 Dec 20

GSK

Gilead

Jan 21 DRG

Feb 21 Mar 21 Apr 21

NYSE Biotech

S&P 500

S&P 500 +47.7% AbbVie +34.6% Eli Lilly +18.97% NYSE Biotech +11.8% DRG +11.2% Merck -4.1% GSK -16.9% Gilead -20.6%

Source: S&P 500, NYSE Biotech, DRG, Analyst reports Page 3

Q1 21 Biopharma earnings analysis and industry outlook

EY outlook

1 Revenue performance and earnings results in Q1 21 reflect a high degree of variability across the industry. "Steady as you go" can be a risky strategy.

2 Concerns about drug pricing, reimbursement and tax reforms coming from a new administration are weighing on share prices, and this is likely to continue.

3 A renaissance of scientific innovation continues to drive a favorable growth outlook.

4 The health of the capital markets, as well as IPOs, follow-ons, SPACs and M&A, will significantly impact growth strategies.

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Q1 21 Biopharma earnings analysis and industry outlook

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