Biopharma Sector Faces Medium-Term Growth Upgrade Hurdle

HSBC has made adjustments to its biopharma coverage ratings and target prices following a rally in the sector during Q2 of this year. Analysts led by Rajesh Kumar noted that pharma multiples are at a decade high, and further outperformance will require a medium-term growth upgrade rather than 'defensive positioning in out of AI/Tech rotation.'

The team has mapped and scored over 100 clinical catalysts through 2027 across its coverage universe. They believe the next 12 months will be less about sector-wide gains and more about individual stock performance, with catalyst quality, franchise adjacency, and loss-of-exclusivity operational gearing separating winners from value traps.

HSBC upgraded Novartis to Hold from Reduce, raising its target price to 110 Swiss francs from 95. The analysts expect a near-term consensus downgrade cycle for the company but believe 'the negative catalyst path has largely played out.'

The broker downgraded Amgen to Hold from Buy, cutting its target price to $425 from $445. HSBC said the stock has re-rated on strong operational execution and positive estimate revisions and now trades close to its target price.