Focus on healthcare stocks in 2020: AZN, GSK, HIK, SN., and CTEC

5 min read | October 11, 2020 02:49 AM BST | By Hina Chowdhary

Summary

  • The British Healthcare sector has been on the forefront of the global fight against the pandemic, with, AstraZeneca Plc and GlaxoSmithKline Plc developing vaccines, that currently promise to be the earliest to be made available for mass inoculation.
  • Most of the large pharma and healthcare companies in the country have done well on the stock market during the year, with the near term promising even better performance as the vaccines go on sale.

The British healthcare has been one of the few sectors that have been in the thick of activity ever since the pandemic hit the United Kingdom. On the Brexit day on 31 January 2020, the threat of the pandemic was already in the rife. The next two months were so volatile that the government had to impose a nationwide lockdown on 23 March 2020.

Since then, the healthcare sector has taken a lead role in not only keeping the NHS (National Health Service of the UK) adequately provisioned to the fight the pandemic but also in leading the global effort in trying to develop an effective vaccine to protect the world population against the pandemic.

Below are five of the largest pharmaceutical companies in the UK and their performance since the beginning of 2020.

 

  1. AstraZeneca Plc – (LON: AZN) The company had stated that there could be a significant impact on its revenue in 2020 after the outbreak as it had significant exposure to the Chinese market. Nevertheless, in its half-yearly results published on 30 July 2020, it reported that its revenue for H1 2020 increased by 12 per cent over the corresponding period in the previous year.

The company has tied up with Oxford University Jenner institute for the coronavirus vaccine, which is currently under development. This vaccine candidate is ahead of its competitors in terms of clinical trials and has scheduled the public availability of the vaccine very soon. AstraZeneca has already manufactured millions of doses of this vaccine and awaits the regulatory approval before hitting the market.

Apart from that, the company has made high-value additions to its oncology portfolio, which could become a star revenue earner soon.

Source- Thomson Reuters

The shares of the company have been performing well on the London Stock Exchange since the beginning of 2020. Except for a dip in March, the stocks have been steadily climbing up and closed at a value of GBX 8424.00 on 9 October 2020, up 0.63 per cent from its previous day’s close.

 

  1. GlaxoSmithKline Plc (LON: GSK) - The company has entered into two agreements in the recent past for development of Covid-19 vaccine. First was with French pharma major Sanofi and the second was with Medicago of Canada. Both of these vaccine candidates are undergoing clinical trials.

GSK’s vaccine joint venture with Sanofi has received support from the US government’s Operation Warp Speed for a faster vaccine development. Further, the pharma major has entered into an agreement with the British government for supply of 60 million doses of this vaccine. 

The company came out with its half-yearly results on 29 July 2020, where it has reported that its revenues have increased by 8 per cent during the same period last year.

Source- Thomson Reuters

The company shares have not been performing well on the London Stock Exchange throughout the year 2020. In fact, except for a peak achieved in the mid-week of January, the stock has been going down. The company stock closed at a value of GBX 1447.20 on 9 October 2020.

  1. Hikma Pharmaceuticals Plc (LON: HIK) - The companies in its half-yearly report published on 7 Aug 2020 has reported that its injectable medicine portfolio has performed exceedingly well delivering more than double-digit revenue growth, as there was increased demand for its products from the US as well as EU during the period. The company's core revenues also jumped 9 per cent compared to the core revenues of the corresponding period last year.

Source- Thomson Reuters

The shares of the company have been doing good on the London Stock Exchange since the beginning of 2020. Disregarding a slight dip in Month, the stock has gone from strength to strength, having risen by more than 50 per cent of its January 2020 value.

On 9 October 2020, the company shares traded at a value of GBX 2,695.00 per share, up from the previous day’s close of GBX 2646.00. 

 

  1. Smith & Nephew Plc (LON: SN.) - The company's business was impacted by the coronavirus pandemic as a majority of the elective surgeries were stopped in the UK owing to the lockdown restrictions.

Later, after the economy re-opened, a pent-up demand emerged for these surgeries, which is driving the short to mid-term demand for Smith & Nephew’s products.

The company, in its half-yearly report presented on 29 July 2020, has reported an 18.1 per cent drop in its revenues compared to the corresponding period last year.

Source- Thomson Reuters

The shares of the company have been performing well on the London Stock Exchange since the beginning of the year 2020. Apart from a drop during March, the stock has been rising at a decent pace. On 9 October 2020 the SN. Stock closed at GBX 1526.00 points, up from the previous day’s value of GBX 1521.50. 

  1. ConvaTec Group Plc (LON:CTEC) - The company came out with its half-yearly results on 6 August 2020. Despite the disruptions caused by the pandemic, the company has been able to register a growth of 2.1 per cent in its revenues from $889 million in H1 2019 to $908 million in H1 2020.

Further, ConvaTec is optimistic about the H2 2020 performance with the release of pent-up requirements from elective surgeries.

Source- Thomson Reuters

The shares of the company have been performing well on the London Stock Exchange since the beginning of 2020. Barring a sharp dip in March, the stock has been on a consistent upsurge. On 9 October 2020, the company shares traded at a value of GBX 176.80 per share at the day’s closure, up from the previous day's value of 175.70.


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