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Jazz Pharmaceuticals: Long-Term Prospects Jazz Up A Modest Upside (NASDAQ:JAZZ)

Jazz Pharmaceuticals: Long-Term Prospects Jazz Up A Modest Upside (NASDAQ:JAZZ)

Investment Thesis

Jazz Pharmaceuticals plc (JAZZ) has enjoyed an extended rally thanks to headline-grabbing announcements in the past few months. Once lifted in August, the company’s revenue outlook needs a further upgrade per our analysis of historical data in light of ongoing product launches. JAZZ’s liquidity is robust enough to weather the effect of declining cash flows even as the management expects the margins to come under pressure amid the ongoing product launches and clinical trials.

As generics make the market entry rivaling the company’s leading drug Xyrem, a new product launch is underway, targeting a swift conversion of the existing patient base. Meanwhile, moves are afoot to bolster the oncology franchise highlighting the attempts at revenue diversification. Our EBITDA forecasts for the year beat the consensus estimates, and with the current forward EV/EBITDA multiple, it indicates a modest undervaluation. Yet, despite a series of catalysts ahead, JAZZ continues to underperform the market on a YTD (year-to-date) basis, encouraging us to raise its outlook to a ‘Buy’.

Jazz_Pharmaceuticals_Xyrem_2Source: emedz.net

Catalysts Spark a Rally

After the emerging competition and a failed late-stage clinical trial darkened its prospects in the first few months of the year, Jazz Pharmaceuticals has made a remarkable turnaround lately, forcing the management to roll back the dreary outlook they set earlier. Thanks to a series of catalysts and the upgraded guidance, the stock had made a swift comeback gaining ~41.3% in the past six months, outperforming the ~26.1% rise in the NBI (NASDAQ Biotechnology Index). In June, FDA signed off JAZZ’s Zepzelca (lurbinectedin) for adults with relapsed metastatic SCLC (small cell lung cancer) on or after platinum-based chemotherapy. One of the two types of lung cancers, SCLC has a poorer prognosis compared to NSCLC (non-small cell lung cancer), highlighting the importance of the development for an indication

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India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

NEW DELHI—With India facing an economic crisis brought on by the coronavirus pandemic, Prime Minister Narendra Modi is looking to deregulation as the cure.

The changes pushed through in recent weeks by his Bharatiya Janata Party, affecting everything from factory floors to farming, have so far led to more confusion than acclaim, but economists say the economic overhaul could ultimately improve India’s troubled growth prospects.

“The reforms are in the right direction. They are bold steps,” said Ashok Gulati, an Indian agricultural economist and professor at the Indian Council for Research on International Economic Relations.

India’s economic growth was slowing alarmingly even before the pandemic abruptly threw it into reverse, starting in March. In the months that followed, the economy contracted by almost one-quarter, the sharpest blow suffered by any of the world’s largest economies during the coronavirus-induced downturns.

The poor have been particularly hard hit, as workers who had migrated to cities to support families in rural areas returned home when those jobs disappeared. With many returning to farming, they now depend more than ever on India’s heavily regulated agricultural economy.

Mr. Modi, whose government’s perilous financial state has left few options for addressing the crisis, pushed through a grab bag of dramatic regulatory changes last month with little warning and no debate in Parliament. In a voice vote—obscured by technical glitches with the public broadcast of the proceeding that made it difficult to determine which parliamentarians actually supported the measures—the BJP passed a flurry of politically difficult changes.

In a single swoop, it dismantled a longstanding regulatory system that forced farmers to sell most of their crops through government-approved wholesale markets dominated by traders and middlemen instead of directly to consumers or food processors.

Then the BJP passed a series of new labor measures that increased the number

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Stocks extend gains with stimulus prospects in focus

Stocks extend gains with stimulus prospects in focus

Stocks traded higher Friday morning as investors continued to mull chances of a virus-relief package amid mixed signals from officials as to what size of a proposal they might support.

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The S&P 500, Dow and Nasdaq each closed at their highest levels in more than five weeks by the end of the trading day on Thursday. All three major indices were on track to rise for a third straight day, and post weekly gains of at least 2.7%, as of Thursday’s closing levels.

Traders have closely monitored developments out of Washington to weigh whether a comprehensive or partial stimulus package might emerge before Election Day on Nov. 3, with additional relief measures viewed as a key tenet in encouraging the recovery in the virus-stricken economy. The Department of Labor’s weekly report on new jobless claims Thursday morning showed a worse than expected 840,000 individuals filed for first-time unemployment insurance benefits last week, though continuing claims dipped back below 11 million for the first time since late March.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin discussed further stimulus in an about 40-minute conversation Thursday afternoon, Pelosi’s spokesperson Drew Hammill said in a Twitter post.

Hammill reported that Mnuchin “made clear the President’s interest in reaching” an agreement on a comprehensive package, after Pelosi said earlier in the day that she would not support a standalone proposal aimed at providing aid only to airlines. However, the White House has offered mixed signals as to whether it would in fact support a broader legislative package, with Trump and White House spokespeople offering conflicting takes on their willingness to back a more comprehensive proposal over the past couple days.

“A compromise on a big stimulus package in Washington could potentially deliver another October surprise, but the odds are against it

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