Canaccord Genuity and SVB Leerink initiated coverage of Castle Biosciences, which develops diagnostic tests for skin cancer. The firm has a price target of $26 and $28 per share for Canaccord and SVB, respectively.

FDA Center for Drug Evaluation and Research Director Janet Woodcock expects the agency's new-drug approval rate to hold steady or increase, and says human genome sequencing will bolster the industry, according to SVB Leerink. Woodcock says the FDA is embracing new methods to generate data, such as basket trials and adaptive design, and is incorporating patient goals and preferences into review and approval decisions.

During its first-quarter earnings call, Regeneron disclosed two deaths linked to cytokine release syndrome in a trial of its bispecific candidate REGN1979, being developed for follicular lymphoma. "Regeneron suggested the higher CRS toxicity was likely due to a heightened immune response, and noted the CRS was also seen in conjunction with increased tumor response," SVB Leerink's Geoffrey Porges said.

Centene CEO Michael Neidorff said the decision to purchase competitor WellCare Health for $15 billion "made more sense than I've seen in a long time," in part because uncertain and challenging environments are good times to act. SVB Leerink Partners analyst Ana Gupte said the deal creates "a $100 billion government powerhouse" because both insurers are involved in Medicare and Medicaid programs, and added it could lead to a new round of industry consolidation.

Drug distributors and pharmacy benefit managers could see Amazon as a competitor or a partner after the company's acquisition of online pharmacy PillPack, says Leerink Partners analyst Ana Gupte.