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.

0458 GMT - Ipca Laboratories' earnings margin outlook is likely dented by rising costs, based on its weaker-than-expected 2Q FY 2022 results, Nomura says. All cost items were higher than Nomura's forecasts due to broad-based inflationary pressures. The company expects headwinds to sustain in the near term, though effects from higher input costs may be mitigated by potential price increases by the pharmaceutical company. With its near-term outlook hurt, upside for its share price is likely limited, Nomura says, downgrading the stock's rating to neutral from buy and lowering target price to INR2,375 from INR2,526. Shares ended 1% lower at INR2,078.30 on Thursday. Markets in India are closed Friday for a holiday.(ronnie.harui@wsj.com)

2219 GMT - Sonic Healthcare's latest trading update suggests more EPS upgrades are likely in FY 2022, Morgan Stanley says. Sonic's revenue lifted 5% to A$3.09B in the first four months of FY 2022, while Ebitda rose by 16% to A$991M. If that continues through December then Sonic's 1H revenue and Ebitda would beat consensus by 2% and 16%, respectively. "Additionally, Sonic states that base business revenue grew 6% versus the prior corresponding period and 4% versus the same period in FY 2020 (i.e. pre-pandemic)," says Morgan Stanley, adding that its broadly in line with its estimates. "We expect testing volumes to remain variable and note recent case surges in Germany in particular." (david.winning@wsj.com; @dwinningWSJ)

2054 GMT - Jefferies believes Sonic's margins from providing Covid-19 tests are at least 800 basis points higher than from its traditional pathology business. "Pricing for Covid tests looks likely to continue at these relatively high levels to end-2021 at least," says Jefferies, which rates the stock a buy. It forecasts ongoing Covid pathology testing growth in FY 2202, as rising Covid cases lead more people to get tested. Strong margins from Covid tests mean Sonic is generating significant cash and "this raises the possibility of corporate activity over the medium term," Jefferies adds. (david.winning@wsj.com; @dwinningWSJ)

1936 GMT - Johnson & Johnson sees its pharmaceutical unit posting 5% average annual sales growth in coming years, reaching $60B in annual revenue by 2025, the head of J&J's drugs unit, Jennifer Taubert, tells analysts at the company's New Jersey headquarters Thursday. The company had $45.6B in pharmaceutical sales last year. J&J sees wider use of existing drugs like cancer drug Darzalex and the expected launch of new products such as an anticoagulant now in development. Sales from new products will help offset revenue J&J expects to lose from patent expirations for drugs including Stelara, a psoriasis treatment. The growth of its pharma division will become even more important after J&J completes the separation of its consumer-health business into a standalone company. (peter.loftus@wsj.com; @Loftus)

1706 GMT - Novo Nordisk's $3.3B deal to buy Dicerna Pharmaceuticals brings a handsome return to Eli Lilly, which invested $100M in the biopharmaceutical company as part of a 2018 collaboration and license agreement and holds a roughly 7% stake. Lilly, which paid $18.47 apiece for its 5.4M Dicerna shares, stands to collect around $207M after Novo agreed to pay $38.25 a share in cash for Dicerna. Dicerna soars 79% to $38.02. (colin.kellaher@wsj.com)

1435 GMT - Gilead's push into cancer drugs under CEO Dan O'Day intensifies with the company paying $725M to partner with Arcus Biosciences on its three lead cancer drugs. Gilead has for decades been known for its antiviral drugs for HIV and hepatitis C, but O'Day has made oncology a key focus of his long-term strategy for jumpstarting sales growth at the company. The deal suggests that early-stage clinical data for the drugs will be encouraging, says RBC Capital. The Arcus drugs that Gilead is collaborating on could contribute up to $1.1B in new revenue, after adjusting for probability of success, in the future years, says RBC. Gilead up 0.1%; Arcus shares up 13%. (joseph.walker@wsj.com)

1443 GMT - Sales figures at French pharmaceutical company Valneva are without any surprise given that sales of existing business are mostly linked to travels and travels have been low, Bryan Garnier says. In particular, sales of cholera vaccine Dukoral have declined by 96%, which was negatively affected by a low level of travels, and legacy vaccines like this could take at least two years before returning to pre-pandemic levels, the investment bank says. Looking ahead, eyes are turned to the Covid-19 vaccine approval by the European Medicines Agency--which should come late this year or in early 2022--and to potential new agreements for the shot coming from extra-European countries potentially next year, according to Bryan Garnier. Valneva trades 2.5% higher at EUR21.50. (cecilia.butini@wsj.com)

1128 GMT - Mizuho starts Relmada Therapeutics with a buy rating, saying the biopharma has a likely winner in REL-1017, its lead asset that's currently in Phase 3 studies as monotherapy and adjunctive therapy for major depressive disorder. The analysts say Relmada's Phase 2 "were very impressive," and that the drug's safety profile appears reasonable. Mizuho sees a 75% probability of success for REL-1017, with an expected US launch in 2024 and adjusted 2030 sales of roughly $1B. Mizuho sets a $50 price target on the stock. (colin.kellaher@wsj.com)

1201 GMT - Siemens Healthineers's continued focus on innovation, its early wins coming from cross-selling Varian products and its ambitious new financial targets are encouraging, Credit Suisse says. The German medical-equipment maker's business model looks sustainable beyond 2025, and this is illustrated by its dominant market shares, the fact that 55% of revenues come from recurring sales, and that 40% of revenues come from products that are less than three years old, according to the Swiss bank. Siemens Healthineers trades 4% higher at EUR66.32. (cecilia.butini@wsj.com)