AMGN

The Biosimilar Revolution Remains Stymied

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Image Source: Express Scripts We remain intrigued by the potential of the upcoming wave of biosimilar versions of well-established specialty drugs. Even though we have been disappointed by recent FDA decisions, we feel it is inevitable biosimilars will enter the market. Let’s update readers on our thoughts. By Alexander J. Poulos Specialty Drug Spending The specialty drug space remains the fastest-growing portion of the overall drug spend in the US. In Medicare plans, however, the total dollars spent grew at a pace on par with inflation. The main reason for the subdued growth is the well-defined process of lower cost generic utilization. The average consumer is well-educated on the cost effectiveness of a generic alternative and shows little resistance to … Read more

Novartis Is Building a Significant Cardiovascular Franchise

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Image shown: The performance of Novartis since the beginning of 2014. One of the more interest times to consider speculating in the biotech/pharmaceutical space is in advance of the identification of the full potential of the clinical pipeline. Once investors recognize the full “value” of an entity’s pipeline, they often bid the company’s equity price higher well in advance of what traditional near-term fundamental metrics might indicate. The results recently released by Novartis have significantly solidified its clinical pipeline, in our view. Let’s take a look. By Alexander J. Poulos Canakinumab The path a molecule follows moving from the realm of theory through the various phases of clinical trials is often fraught with peril. Often, as the molecule is tested … Read more

Pipeline Woes Continue to Plague Amgen

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Image Source: kibbles_bits By Alexander J. Poulos Earnings Release We have written a few bearish pieces on biotech stalwart Amgen (AMGN) this year. In the first piece, “The Dreaded Patent Cliff: 3 Pharmaceutical Companies at Risk,” we presented a number of areas of concern, most notably the expected drop in revenue from Amgen’s two main products. In its first-quarter earnings release, issued April 26, Amgen posted earnings per share of $3.15 on a non-GAAP basis versus $2.90 for the same period last year. Upon first glance, the numbers would indicate solid growth, but upon further examination, a worrisome trend emerges. The “earnings beat” is a direct result of a decrease in expenses and a lower share count, as top line … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Can Vertex Pharmaceuticals Dominate the Race to Treat Cystic Fibrosis?

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Tickerized for holdings in the XLV and IBB. Cystic Fibrosis is a rare disease that afflicts an estimated seventy-five thousand patients worldwide. Vertex Pharmaceuticals is the first to market with a combination treatment to treat a portion of the overall patient population. Will Vertex win the race to bring forth a triple therapy to treat the vast majority of those afflicted? By Alexander J. Poulos Cystic fibrosis (CF) is a recessive genetic disorder. The patient that is afflicted will carry two copies of the cystic fibrosis conductance regulator protein (CFTR) gene. The CFTR gene allows the body to produce the CFTR protein, whose function is to remove chloride from the cells. Patients that have CF will suffer from a “thickening” … Read more

Analyzing Amgen’s Sudden Fall

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Amgen’s share price has run up in anticipation of positive results from its key pipeline product Repatha. Now that the results are out, doubt has crept in concerning the overall viability of the product. Let’s examine. By Alexander J. Poulos Amgen (AMGN) remains a biotech bellwether, as the company continues to profit from its legacy product line. The established product line enhances the equity’s appeal as the cash flow generated is returned to shareholders in the form of a generous dividend. The company currently yields ~2.8%. For many conservative, income-seeking investors Amgen remains a top consideration in what many perceive as a “risky industry.” Amgen’s Dividend Cushion ratio >> That said, what many hopeful investors may not realize is that … Read more

Is AbbVie a Value Trap?

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With uncertainty surrounding the patent of blockbuster drug Humira, AbbVie is looking to deliver another success story from its pipeline. Is it headed for a patent cliff? Let’s take a look. By Alexander J. Poulos and Kris Rosemann A successful operator in the pharmaceutical industry (XLV) is often characterized by having high margins, allowing for copious amounts of free cash flow generation, which can be returned to shareholders via dividends. In today’s yield-starved market environment, major pharma, and the above-average yields of some players within, remains in demand, but investors must be cognizant of the unique risks that face the industry. One key risk remains the loss of patent protection on drugs and treatments that leads to the aforementioned attractive … Read more

Novartis’ Continuous Dividend Growth and Promising Pipeline

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Image Shown: Novartis’ dividend history, source: Novartis. By Alexander J. Poulos and Brian Nelson, CFA Sometimes the most attractive opportunities manifest themselves in companies that are in the midst of a transition. In the case of entities in the pharmaceutical industry, the transition often occurs during the period of patent-protection loss of a top-selling treatment. Typically, the market will sour on the company’s prospects as revenue is expected to decline in the near term. However, the longer investment time horizon we have at Valuentum allows us to examine whether such opportunities still fit for inclusion in the newsletter portfolios. Said differently, we’re less interested in what the company will do in the next quarter or two than we are in … Read more

The Dreaded Patent Cliff: 3 Pharmaceutical Companies at Risk

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Image Source: Global Panaroma Let’s have a look at 3 pharmaceutical giants that may encounter some troubles in coming years. By Alexander J. Poulos and Brian Nelson, CFA Established companies in the pharmaceuticals industry (XLV) generally offer an appealing blend of high profit margins, a relatively recession-resistant nature of commercialized products, and a flourishing drug pipeline. In many ways, companies in the industry can be viewed as largely defensive, with a resilient revenue profile and profit stream helping to power a steadily-growing dividend, which remains highly prized in the current income-starved environment. In addition to a focus on balance sheet health and the timing of future free cash flow generation, when it comes to pharmaceutical entities, we also analyze the … Read more

Dividend Increases/Decreases for the Week Ending December 23

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Below we provide a list of firms that raised/lowered their dividends during the week ending December 23. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week 8point3 Energy Partners (CAFD): now $0.249 per share quarterly dividend, was $0.2406. ALPS Cohen & Steers Global Realty Majors ETF (GRI): now $0.460527 per share quarterly dividend, was $0.382421. ALPS Equal Sector Weight ETF (EQL): now $0.906383 per share quarterly dividend, was $0.271693. Amgen (AMGN): now $1.15 per share quarterly dividend, was $1.00. Boston Prop (BXP): now $0.75 per share quarterly dividend, was $0.65. Camden National … Read more