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Analysts Met With UnitedHealth And Mylan Management; What Happened?

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Analyst meetings held by pharmaceutical companies throw light on strategic options in the industry. Following meetings with the management, Leerink analysts maintained an Outperform rating on Mylan NV (NASDAQ: MYL), with a price target of $67. Cowen and Co analysts maintained an Outperform rating on UnitedHealth Group Inc. (NYSE: UNH), with a price target of $140.

In a report published Monday, Leerink noted the elements of the discussion that the analysts view as "surprising and/or incremental." These include:

  • Stitching Foundation is believed to act as barrier to a Teva Pharmaceutical Industries Ltd (NYSE: TEVA) (rated Outperform) deal "as long as there is a viable (hostile bid) threat – the Chairman doesn’t believe there is a limit on the duration the Foundation could veto the TEVA transaction."
  • The company remains bullish about its merger with Perrigo Company plc (NYSE: PRGO), but also stated that it has other M&A deals under consideration if PRGO’s asking price is too high.
  • MYL is "clearly prepared to use every possible obstacle to fend off a TEVA bid or position MYL for a better price."

"We believe (1) investor sentiment for MYL-PRGO is waning; (2) Dutch case law Re: poison pill is on MYL's side, but a failed PRGO shareholder vote and a higher TEVA bid could create pressure point over time as our legal specialists do not view Foundation as indefinite license to serve in the MYL board's interest. While it's too early to predict an outcome, we still like the risk/reward on MYL here," the analysts added.

In a separate report Cowen and Co mentioned that UnitedHealth and Optum were "better together." There seems to be "tremendous growth potential within the benefits business" and Optum's growth opportunities "are optimized by remaining integrated with UnitedHealthcare."

"Optum appears to be a key piece in the company's long-term growth plans. Optum brings to the table a diverse product portfolio that serves governments, other payers, and providers. The business appears more integrated with UnitedHealthcare than we previously anticipated. We do not believe a spin-off is likely, at least in the near-term," the analysts added.

Latest Ratings for MYL

DateFirmActionFromTo
Oct 2020Wells FargoMaintainsEqual-Weight
Aug 2020UBSMaintainsNeutral
May 2020UBSMaintainsNeutral

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View the Latest Analyst Ratings

 

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Posted-In: Cowen and Company LeerinkAnalyst Color Reiteration Analyst Ratings

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