Morgan Stanley named a raft of European stocks with strong balance sheets, lots of cash or high shareholder returns. The bank said the latest quarterly results showed a slowdown in revenue, earnings and cash flow “as companies brace for higher interest rates and a less certain macro environment,” but it identified several that appear to be bucking the trend in a research note seen by CNBC on Wednesday. The bank analyzed more than 400 companies that trade on the MSCI Europe index to create several stock screens. On a list of stocks with strong balance sheets, Morgan Stanley included retailers Next , H & M and JD Sports , as well as pharmaceutical firm Sanofi and biotech company Genmab . It also named aerospace companies Airbus and MTU Aero Engines , software company SAP and semiconductor firm STMicroelectronics . “We searched for companies with strong balance sheets and sufficient liquidity that are generating a return over their cost of capital,” the bank stated. The bank said these firms also have an expected free cash flow growth of more than 5% over the next two years. High cash flow and shareholder returns The bank also screened for companies with “resilient high free cash flow.” “Self-financing companies should be better able to weather any prolonged macroeconomic weakness, deploying capital effectively and seizing opportunities that come along the way,” Morgan Stanley said. Its list included oil companies BP and TotalEnergies and utilities firm Centrica , as well as advertising groups WPP and Publicis Groupe . Also on the list are automaker Stellantis and steel supplier Tenaris . “Cash-rich companies with high free cash flow yields should also have better downside protection, while providing upside potential if management is able to deploy its cash effectively,” the bank said. Morgan Stanley also screened for stocks with the highest total shareholder returns, naming InterContinental Hotels , materials company Holcim , fashion firm Burberry and jewelry business Pandora among its picks. Those firms also have “positive free cash flow and net income growth expected over the next 2 years,” the bank said. — CNBC’s Michael Bloom contributed to this report.
A panel of independent advisors to the Food and Drug Administration unanimously recommended Thursday that the antibody nirsevimab be approved for use to protect infants from respiratory syncytial virus, the leading cause of hospitalization among newborns.
If the FDA approves nirsevimab, the antibody would become the first medical intervention available in the U.S. that can protect all infants from RSV. The FDA, which is not obligated to follow the recommendation of its advisory panel, is expected to make a final decision on nirsevimab in the third quarter of this year.
Nirsevimab is a monoclonal antibody made by AstraZeneca. The medication would be marketed by Sanofi.
The advisory panel voted 21-0 to recommend its approval.
RSV kills nearly 100 babies in the United States every year.
Infants hospitalized with RSV often require oxygen support, intravenous fluids and are sometimes placed on a ventilator to support their breathing.
The virus is a major public health threat. A surge in RSV infections last year overwhelmed children’s hospitals leading to calls for the Biden administration to declare a public health emergency in response.
RSV circulates at the same time as the flu and Covid-19, which puts added pressure on hospitals.
There is another monoclonal antibody used against RSV called palivizumab. But this antibody is only for preterm infants and those with lung and congenital heart conditions that are high risk of severe disease. Palivizumab also has to be administered monthly.
Nirsevimab, by contrast, would also be administered to healthy infants, who make up a majority of the hospitalizations. It is also given as a single dose, which would make administration easier.
Nirsevimab is not considered a vaccine because it is a monoclonal antibody.
It is unclear whether the federal Vaccines for Children program will provide nirsevimab for uninsured and underinsured children for free because the antibody is regulated as a drug.
Nirsevimab is already approved in Canada, Europe and the United Kingdom.
Nirsevimab was up to 75% effective at preventing lower respiratory tract infections that required medical attention and 78% effective at preventing hospitalizations, according a review by the FDA.
A more conservative estimate by FDA put the antibody’s effectiveness at about 48% against lower respiratory tract infections that required medical attention. This estimate assumed patients with missing data on their health outcomes had lower respiratory tract infections that required medical attention.
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Nirsevimab is administered as a single injection with the dose depending on the infant’s weight. Infants that weigh less than 5 kilograms would receive a 50 mg injection for their first RSV season, and those weighing 5 kilograms or greater would receive a 100 mg injection.
Children less than two years old who remain at risk for severe RSV in their second season would receive a single 200 mg injection of nirsevimab.
The FDA did not identify any safety concerns in its review of nirsevimab.
Other monoclonal antibodies have been associated with serious allergic reactions, skin rashes and other hypersensitivity reactions.
The FDA did not find any cases of serious allergic reactions in the nirsevimab trials and cases of skin rash and hypersensitivity reactions were low in infants who received the antibody. But Dr. Melissa Baylor, an FDA official, said cases of these side effects will likely occur if nirsevimab is approved.
Twelve infants who received nirsevimab in the trials died. None of these deaths were related to the antibody, according to the FDA’s review.
Four died from cardiac disease, two died from gastroenteritis, two died from unknown causes but were likely cases sudden infant death syndrome, one died from a tumor, one died from Covid, one died from a skull fracture, and one died of pneumonia.
“Most deaths were due to an underlying disease,” Baylor said. “none of the deaths appeared to be related to nirsevimab.”
There is very close attention to safety due to historical failures in the development of RSV vaccines. Scientists first tried to develop a vaccine in the 1960s with an inactivated virus, but that shot actually made disease from RSV worse in some children when they received their first natural infection, resulting in the death of two infants.
Manish Shroff, head of patient safety at AstraZeneca, said the company will keep a close eye on the safety of nirsevimab through a large global monitoring system: “Safety is of utmost importance,” he said.
Baylor said there are also unanswered questions about how nirsevimab would interact with vaccines in development that confer protective antibodies to the fetus by administering the shot to the mother.
It’s unclear if giving nirsevimab to infants whose mothers received such RSV vaccines would provide additional protection or create potential safety issues,” Baylor said.
