Citi initiates four European life sciences stocks

PolyPeptide AG

26/06/2023 10:14

** Citigroup starts coverage of four European life sciences
tools and services firms, seeing inventory normalization in H2
in an unclear biotech funding environment
    ** It starts Sartorius with "buy", saying the lab equipment
maker can benefit from the secular long-term growth outlook in
the biologics end-market and new modalities like cell and gene
    ** "Bio-Rad's aspiration to acquire Sartorius when trust
lock-up expires in mid-28 further underpins the shares," the
broker adds
    ** Citi initiates Polypeptide  PPGN.S  with "neutral",
saying operational risks will persist in the near-term for the
maker of peptides for pharma and biotech companies
    ** It starts pharmaceutical company Siegfried  SFZN.S  with
"neutral", saying the U.S. Inflation Reduction Act can become an
obstacle for small molecules development, which is likely to
restrict overall market growth
    ** The broker initiates biotech supplier Bachem  BANB.S 
with "sell", citing growth and margin headwinds from slow
oligonucleotides ramp-up and potential dilutive impact from
large contracts
    ** Citi's top picks for the sector are Sartorius and Lonza
 LONN.S  ("buy") thanks to the robust outlook for the biologics
end-market

 (Reporting by Amir Orusov)
 ((Amir.orusov@thomsonreuters.com))