The latest Market Talks covering the Health Care sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1107 ET - Recent clinical-trial setbacks mean Novartis needs to be near-flawless in bringing the rest of its pipeline to the market or look for deals, but the Swiss drugmaker shouldn't rush it, RBC Capital Markets analysts say in a research note. "Shares have pulled back from all-time highs, but we see no urgency to act," the analysts say. The failures of cardiovascular and neuromuscular drugs pelacarsen and del-desiran raise the bar for Novartis's pipeline, given that these were two important candidates to offset sales lost to upcoming patent expirations, they add. RBC starts coverage on the stock with a sector perform recommendation and a target price of 120 Swiss francs. Shares fall 0.3% to 111.44 francs. (adria.calatayud@wsj.com)

1059 ET - Roche Holding's base business is gaining momentum and its drug pipeline offers deeper potential than the market gives it credit for, RBC Capital Markets analysts write in a research note. The crown jewel in the Swiss drugmaker's portfolio is breast-cancer drug candidate giredestrant, which could generate annual sales of as much as $14 billion, according to RBC. Giredestrant has the potential to become a cornerstone therapy in breast cancer, the analysts say. But other drugs in Roche's pipeline such as enicepatide for obesity, pegozafermin for fatty liver disease and fenebrutinib for multiple sclerosis could see upgrades to consensus expectations, they add. RBC starts coverage on Roche with an outperform recommendation and a target price of 400 Swiss francs.Shares fall 0.8% to 347.70 francs. (adria.calatayud@wsj.com)

1049 ET - French drugmaker Sanofi and U.S. partner Regeneron Pharmaceuticals could extend the U.S. patent on their blockbuster anti-inflammatory drug Dupixent by two years to 2033, RBC Capital Markets analysts write in a research note. RBC sees a 70% chance of this happening and says the move could help Sanofi as it reshapes its portfolio. "Sanofi is navigating a pivotal transition amid near-term challenges," the analysts say. Despite Dupixent's strength, investors want proof of diversified growth and acquisitions seem likely, they add. RBC starts coverage of Sanofi with a sector perform recommendation and a target price of 80 euros. Shares fall 0.9% to 74.05 euros. (adria.calatayud@wsj.com)

1043 ET - GSK needs to manage its base business in a flawless way to hit its 2031 sales target, given that it will take a few years for its drug pipeline to contribute to its top line meaningfully, RBC Capital Markets analysts say in a research note. The U.K. drugmaker's core HIV, general medicines, respiratory and vaccines businesses will face significant competition over the next five years and its drug pipeline remains a "show-me" story for now, the analysts say. "We believe GSK has made oncology the priority area with Blenrep and its [antibody-drug conjugate] portfolio, but we don't see material sales until the end of the decade for these assets," the analysts add. RBC starts coverage of GSK with a sector perform recommendation and a target price of 19.75 pounds. Shares rise 0.5% to 18.05 pounds. (adria.calatayud@wsj.com)

1001 ET - AstraZeneca shares have been overly punished by recent concerns, but they look set for a swift recovery once uncertainty dissipates, RBC Capital Markets analysts say in a research note. The failure of a heart-disease clinical trial, takeover speculation and uncertainty about upcoming results from two big cancer studies have all weighed on the U.K. drugmaker's stock, the analysts say. AstraZeneca faces low expectations for the two late-stage trials in breast and lung cancers and it doesn't need them to be successful to reach its target of $80 billion in revenue by 2030, but uncertainty might keep risk-averse investors on the sidelines, they add. RBC starts coverage of AstraZeneca with an outperform recommendation and a target price of 145 pounds. Shares fall 1.7% to 116.82 pounds. (adria.calatayud@wsj.com)

0854 ET - Sandoz Group plans a major expansion of its biosimilar-drug portfolio over the coming decade and a half, but this effort will initially rely on external assets, J.P. Morgan analysts say in a research note. The Swiss maker of generic drugs on Tuesday set out plans to increase the number of biosimilars--copycat versions ofbiologic drugs--in its portfolio to 100 by 2030 from 13 currently. "Post 2035, the company aims to focus on in-house development, but through to the end of the decade expansion in the biosimilar opportunity will primarily be realized through additional partnerships, while a combination of approaches will be pursued from 2030-35," the analysts say. Sandoz shares fall 1.3%. (adria.calatayud@wsj.com)

0850 ET - Sanofi's results from a midstage study for a new asthma drug look positive, but more data will be needed to establish whether the medicine has a differentiated profile relative to a rival treatment, Citi analysts say in a research note. Results presented by the French drugmaker at a medical conference show its experimental lunsekimig asthma drug achieved a clinical benefit in a midstage study, but a late-stage trial will be needed to determine whether it beats AstraZeneca's Tezspire, the analysts say. Citi estimates lunsekimig could reach annual sales of 1.8 billion euros at its peak across asthma and chronic obstructive pulmonary disease. Sanofi shares fall 1.1%. (adria.calatayud@wsj.com)

0828 ET - AstraZeneca reported blowout data for its new chronic obstructive pulmonary disease drug, which support sales expectations sharply above current consensus estimates, Citi analysts say in a research note. Full study results from the U.K. pharmaceutical company for its tozorakimab point to potential for a broad use across all populations of COPD patients, the analysts say. Tozorakimab also achieved better data for the subgroup of patients for which Sanofi and Regeneron's Dupixent and GSK's Nucala are approved, they add. As a result, Citi says the data support potential peak sales for tozorakimab of at least its estimate of $7 billion, or roughly double what the current consensus estimate for the drug projects. AstraZeneca shares fall 1.1%. (adria.calatayud@wsj.com)

0423 ET - Novartis's stock selloff on the failure of a neuromuscular drug in a clinical trial looks overdone and upcoming study results could be more positive for the Swiss drugmaker, Citi analysts say in a research note. The company reiterated its 2025-2030 outlook and trial setbacks for experimental neuromuscular and heart drugs del-desiran and pelacarsen are partially mitigated by the success of its remibrutinib medicine in a multiple sclerosis study, the analysts say. Full data for the MS study and results from another trial for the same drug in skin condition hidradenitis suppurativa could play in Novartis's favor, they add. Citi cuts its target price on Novartis stock to 135 Swiss francs from 142 francs. Shares fall 1.1% to 110.54 francs, after closing 11% lower Tuesday. (adria.calatayud@wsj.com)

0401 ET - Novartis's latest clinical-trial setback raises questions about the Swiss drugmaker's acquisition track record and leaves a sales hole to be plugged in the early 2030s, Deutsche Bank's Emmanuel Papadakis says in a research note. News that drug candidate del-desiran missed the target of a late-stage study in rare neuromuscular disorder known as myotonic dystrophy type 1 came shortly after cardiovascular drug pelacarsen failed another trial. Del-desiran was the first proof point for the recent $12 billion Avidity acquisition, the analyst says. Moreover, it leaves a hole to be addressed in the early 2030s when big drugs like Cosentyx, Kisqali and Kesimpta lose patent protection, he adds. Deutsche Bank cuts its recommendation on Novartis stock to hold from buy and trims its target price to 120 Swiss francs from 140 francs. Shares fall 0.8% to 110.86 francs. (adria.calatayud@wsj.com)

2258 ET - Kyowa Kirin's latest clinical data for an ophthalmology drug candidate is disappointing, Jefferies analysts say in a note. Phase 2 clinical results for KHK4951 eye drops materially weaken one of Kyowa Kirin's important pipeline opportunities, the U.S. bank says. Kyowa Kirin said Tuesday the study failed to meet its primary objective. Jefferies cuts its estimated probability of success to 5% from 25% and reduces peak sales assumptions for the drug candidate by 50%. The bank lowers its rating on Kyowa Kirin to hold from buy and its target price to 2,600 yen from Y2,800. Shares are 4.7% lower at Y2,251.0. (kosaku.narioka@wsj.com; @kosakunarioka)

1839 ET - Echo IQ's shares are likely to be sold off today after the U.S. Food and Drug Administration didn't give clearance to its EchoSolv HF tool for detecting heart failure, says Petra Capital. The FDA issued a Not Substantially Equivalent determination. "This is a significant and relatively uncommon setback, although not necessarily terminal," analyst Tanushree Jain says. There are examples of companies ultimately gaining FDA clearance after addressing concerns. Still, it takes extended time and cost and carries elevated risk. "In Echo IQ's case we do not believe it will be a quick or a simple resolution either," says Petra Capital, downgrading the stock to "sell," from "hold." Echo IQ ended Tuesday at A$1.28.