Mizuho’s Vamil Divan reveals his top biotech pick

AbbVie Inc (NYSE: ABBV) closed 2021 with a 25% gain in the stock price, and Mizuho’s senior biopharmaceuticals research analyst says 2022 will be another year of outperformance for the biotech giant.

Divan sees upside to $154 a share

According to Vamil Divan, AbbVie is his top biotech pick, which he rates at “buy” with a price target of $154 that represents more than 10% upside from here. On CNBC’s “The Exchange”, he said:

AbbVie bought Allergan a couple years ago. Aesthetics is a big part of the company now. They also have a strong business in immunology, oncology, and neuroscience. So, we really like how it’s a nice diversified growth story that’s still trading at a significant discount.

The loss of Humira patent, as per Divan, is unlikely to be a headwind for the company as it has already secured other drives for growth, which will be sufficient for multiple expansion. Last month, Wells Fargo said ABBV could climb to $165 a share.

IBB is down close to 20% for the year

Biotech has had a rough start to the year, with the iShares Biotechnology ETF (IBB) down nearly 20% as of Friday morning. Elaborating on reasons why the biotech space has been losing interest since September 2021, he said:

We’ve seen questions on the FDA and some uncertainty around its approval process. There are questions on FTC; maybe it will take a better look at M&A in this space. For smaller biotech firms, the appeal is they’ll get acquired by one of the larger companies. If that goes away, it’s a problem.

The debate on drug pricing, he added, could be another reason why Biotech has been rather dull. Other names Divan likes in this sector include Biohaven, Karuna, and Alkermes.

The post Mizuho’s Vamil Divan reveals his top biotech pick appeared first on Invezz.

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