UPDATE: Deutsche Bank Upgrades GlaxoSmithKline to a Buy on Risk/Reward Move to Positive

In a report published on Tuesday, Deutsche Bank analyst Mark Clark upgraded GlaxoSmithKline GSK from Hold to Buy.

In the report, Deutsche Bank noted, "We upgrade to Buy for four reasons: 1) the downgrade cycle of the past two years (which has seen consensus sales/EPS drop by 10%/15%) looks to be over as the market now recognises the maturity of GSK's current business and as 2013 guidance looks achievable; 2) upcoming regulatory decisions are likely to be positive, given strong data and high unmet need in melanoma and HIV and an apparent softening of the FDA's stance on respiratory drugs (which lifts the chances of approval of potential blockbuster Anoro); 3) pipeline optionality appears skewed to the upside given pending Phase III readouts on two high risk/reward programs (MAGE-A3, darapladib) and three little-appreciated assets (Arzerra, mepolizumab, drisapersen) for which consensus carries only modest sales (implying, on our estimates, 5-35% potential EPS upside by 2020+); 4) GSK's above-sector yield looks both attractive and very secure."

GlaxoSmithKline closed at $52.97 on Friday.