BMO's Evan Seigerman: More clarity out of the FDA could drive smaller biotech names in 2026
2025-12-31_20-47 • 3m 31s
? (Anchor)
00:00.240
After
a
turbulent
2025,
the
healthcare
sector
could
be
on
the
mend
in
the
new
year.
Here
to
discuss
is
BMO
Capital
Markets
head
of
healthcare
research,
Evan
Siegerman.
Evan,
great
Evan Seigerman (Head of Healthcare Research)
00:09.520
to
see
you.
Thank
you
for
having
me.
Happy
New
Year.
? (Anchor)
00:11.600
Happy
New
Year.
It's
been
it's
been
a
ride.
I
mean
if
you
just
look
at
sector
wide,
you
know,
major
low
in
September,
massive
underperformance
by
healthcare,
by
farmer,
by
the
rest
of
it.
And
then
they
kind
of
rip
after
some
regulatory
shadows,
maybe
recede
a
little
bit,
but
? (Anchor)
00:27.440
where
does
that
take
us?
For
Evan Seigerman (Head of Healthcare Research)
00:28.560
sure.
And
it
has
been
a
wild
ride
Right,
go
back
to
liberation
day
when
everyone
thought
farmer
terrorists
were
going
to
destroy
the
sector.
That
didn't
happen,
but
then
you
saw
all
those
deals
which
I
think
you're
referring
to,
you
saw
farmer
Yeah
really
um
kind
of
leaning
into
Evan Seigerman (Head of Healthcare Research)
00:43.400
the
administration
to
ensure
that
they
could
you
know
really
sell
their
products
and
open
up
access.
So
that's
what
kind
of
drove
the
performance
in
the
back
half
of
the
year.
And
the
question
that
I
get
is,
a,
is
there
other
trades
besides
the
GLP-1s
which
we
can
talk
about?
Evan Seigerman (Head of Healthcare Research)
00:54.120
Yeah
The
Novo
pill
was
approved
last
week.
But
also
what
is
what
happens
next
year,
there
seems
to
be
some
consternation
still
at
the
FDA,
that's
a
bit
of
a
mess.
Sure.
And,
you
know,
you
know,
the
AI
trade
kind
of
cools
off,
do
people
put
more
money
into
pharma?
So,
our
Evan Seigerman (Head of Healthcare Research)
01:08.480
thoughts,
obesity
is
here
to
stay.
We
like
the
deals
that
we're
seeing.
We
We
suggested
that,
you
know,
that
suggests
to
us
that
industry
and
the
administration
are
working
well
together,
but
I'd
like
to
see
more
kind
of
clarity
at
the
FDA
and
hopefully
that
can
also
drive
Evan Seigerman (Head of Healthcare Research)
01:23.080
performance
in
the
smaller
biotech
names.
? (Anchor)
01:24.800
When
you
say
obesity
is
here
to
stay,
I
mean,
clearly
as
a
category,
it's
been
dominant
uh
in
terms
of
mind
sharing
and
everything
else.
Now,
you
see
some
pricing
actions,
obviously
some
competitive
back
and
forth.
Um,
what
are
the
the
smart
ways
to
think
in
in
play?
For
sure.
Evan Seigerman (Head of Healthcare Research)
01:38.800
And,
you
know,
we
are
positive
on
Lilly,
neutral
and
Novo,
and
I
think
that's
very
important.
While
we
have
the
Novo
with
GoViPill
approved,
I
don't
know
if
that's
going
to
be
enough
to
get
them
out
of
the
doldrums.
I
feel
like
Lilly
is
really
has
been
executing
on
all
Evan Seigerman (Head of Healthcare Research)
01:51.000
cylinders,
and
they'll
continue
to
do
so.
But
then,
we're
looking
to
smaller
names.
You
know,
I
cover
a
company's
structure,
at
Therapudic,
said
great
data
recently.
So,
I
think
there's
going
to
be
more
M&A
in
the
space.
There's
a
scare
of
good
assets,
which
could
get
some
other
Evan Seigerman (Head of Healthcare Research)
02:02.080
big
players
in
the
space
as
well.
? (Anchor)
02:05.200
And
so,
when
it
comes
to,
I
guess,
maybe
some
of
the
more
traditional
legacy
names,
I
know
you
sort
of
warmed
up
to
Merk.
That
stock
is
actually
also
a
good
comeback.
Aside
from
them
being
like,
"Wow,
they're
too
cheap,
they're
kind
of
unloved."
What's
the
the
kind
of
positive
? (Anchor)
02:19.400
forward-looking
story?
Great
question,
Evan Seigerman (Head of Healthcare Research)
02:20.720
there.
So,
we
did
recently
upgrade
shares
in
Merk
to
outperform.
And
the
key
there
is
we're
really
starting
to
see
them,
you
know,
put
together
a
portfolio
of
assets
to
help
them
get
through
the
Illumin
Catruta
Eloi.
We
all
know
that's
happening.
You
could
see
some
multiple
Evan Seigerman (Head of Healthcare Research)
02:34.040
compression
kind
of,
you
know,
if
they
don't
solve
that,
but
they
have
great
data
from
the
an
oral
cholesterol
drug.
They've
done
some
really
smart
M&A.
And
they
have
some
really
interesting
cancer
assets
beyond
Catruta,
which
could
help
grow
into
the
2030s.
? (Anchor)
02:47.640
You
alluded
to
M&A.
Mhm.
Um
what
would
you
expect
there
and
is
it
time
to
just
a
sort
sort
of
assume
that
there's
going
to
be
a
big
uh
kind
of
a
mopping
up
or
or
a
consolidation
phase?
Evan Seigerman (Head of Healthcare Research)
02:59.760
Well,
We've
seen
a
lot
of
M&A
recently.
I
mean,
you
had
the
Pfizer,
Metzer,
Novo
kind
of,
you
know,
saga
Sure
in
early
November.
And
I
think
a
lot
of
these
big
farmers
have
holes
in
their
pipelines
that
need
to
be
filled.
Like
Merck
still
needs
to
buy,
Bristol
needs
to
buy,
Novo
Evan Seigerman (Head of Healthcare Research)
03:15.040
needs
to
buy,
could
go
down
the
list,
all
the
Europeans
need
to
buy.
So,
that
really
helps
because
if
you
have
a
biotech
with
good
data
on
the
precipice
of
approval,
they
are
a
potential
hot
target.
One
of
our
top
picks
into
next
year
is
ticker
IRON,
Dis-Medice
Mhm
you
know,
Evan Seigerman (Head of Healthcare Research)
03:28.560
potential
approval
next
year
for
one
of
their
assets
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