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Sanofi: The First Victim in the Great Insulin Price War

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The steady growth expected from Diabetes products has come to an abrupt halt. Is Sanofi adequately prepared to replace the revenue loss of its top-selling product? By Alexander J. Poulos and Kris Rosemann The diabetes pandemic continues to expand at a rapid pace. Diabetes is a condition where the body is unable to regulate the amount of sugar found in the blood correctly, and it is differentiated into two distinct types. Type one diabetes is defined as a condition where the body does not produce any insulin, thus requiring regular supplementation to maintain proper regulation. The second and more common version is Type 2 diabetes where the body loses the ability to produce an adequate amount of insulin to regulate … Read more

Johnson & Johnson’s Oncology Division A Force to Be Reckoned With

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Healthcare and consumer staples giant Johnson & Johnson is a core holding in both newsletter portfolios. Let’s take a deep dive into one of its key sources of growth, its ‘Pharmaceutical’ segment. By Alexander J. Poulos and Kris Rosemann Consistency of returns is one of the hardest goals to achieve in the investment world. Often, one of the key components when selecting equities to build a long-term portfolio is their respective durability through the ups and downs of the economic cycle (in portfolio theory their collective performance would matter). A company that is able to generate resilient returns under various conditions often has a business model with defensive characteristics and an attractive Economic Castle. Johnson & Johnson (JNJ), the consumer … 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

Pharma, Biotech and How to Consider Investing In It

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The Valuentum analyst team digs deep into recent trends in big pharma and biotech from the lofty pricing of drugs to political and competitive pressures to ETF considerations and beyond. ~10 mins. If you cannot view the podcast below, please view the transcript below or select the link here. Tickerized for holdings in the XLV and IBB. Brian Nelson, CFA Gilead’s (GILD) hepatitis C regimen, almost a hundred thousand dollars. Vertex’s (VRTX) cystic fibrosis drug — hundreds of thousands of dollars per year. Have the drug companies lost their mind? This is Brian Nelson from Valuentum Securities, and today joining me is Mr. Kris Rosemann and Mr. Chris Araos — and we are going to talk everything healthcare, biotech… Mr. … Read more

Big Pharma 1Q Earnings Roundup, Part I

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Image Source: Rodrigo Companies mentioned: AZN, ABT, BIIB, LLY, GSK, VRTX, ZTS AstraZeneca (AZN) Treading Water in 2016 AstraZeneca reported total revenue growth of 1% in the first quarter of 2016 on a year-over-year basis, but this growth rate climbs to 5% when not including the impact of foreign exchange headwinds. Core operating results, which excludes the impact of amortization, impairments, restructuring and other non-operating costs, did not hold up well compared to the first quarter of 2015. Core operating profit and core earnings per share fell 8% and 7%, respectively, on a constant currency basis from the year-ago period. Core R&D spending grew 15% in the quarter as a result of acquisitions and continued focus on the firm’s pipeline, which … Read more

Dividend Increases/Decreases for the Week Ending December 11

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Below we provide a list of firms that raised/lowered their dividends during the week ending December 11. 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 Abbot Labs (ABT): now $0.26 per share quarterly dividend, was $0.24. Avago Technologies (AVGO): now $0.44 per share quarterly dividend, was $0.42. Bristol-Myers Squibb Company (BMY): now $0.38 per share quarterly dividend, was $0.37. Buckle (BKE): now $0.25 per share quarterly dividend, was $0.23. Capella Education (CPLA): now $0.39 per share quarterly dividend, was $0.37. Croghan Bancshares, Inc. (CHBH): now $0.35 per share quarterly dividend, was … Read more

Around the Horn in Biotech/Pharma: 3Q Earnings Review

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The biotech (IBB) and pharma (XLV) industries have been two of the strongest-performing segments of the market since the March 2009 panic bottom during the Financial Crisis, but the broader healthcare arena has been under siege as of late. New discoveries underscored by the development of a cure for hepatitis C with Gilead’s (GILD) Solvadi/Harvoni and a huge step forward in cystic fibrosis treatment with Vertex’s (VRTX) Orkambi have helped fuel the exuberance, but established pharma entities have also caught a bid as they successfully worked through the “patent cliff,” capturing the wave of dividend growth investors and acquiring budding new pipelines from smaller rivals along the way. The past few months haven’t been kind to biotech investors, however. What … Read more

Guide to Second Quarter Earnings; Big Pharma Experiencing Earnings Momentum

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Abbott (ABT) Abbott is one of our favorites in Big Pharma. We know many of you hold the stock in your own portfolios, and frankly, the company is one of the best operators in its industry. Abbott’s second-quarter performance revealed continued strength in its global diagnostics and branded generics businesses. Foreign currency exchange headwinds have posed problems for almost every multi-national in our coverage, but on an operational basis, second-quarter worldwide sales leapt nearly 10%. Abbott kept its full-year 2015 adjusted EPS guidance range from continuing operations unchanged at $2.10-$2.20, a rarity across a pharma universe that’s experiencing fantastic earnings momentum as of late. Keys to the Quarter: We were very pleased with the traction witnessed in Abbott’s pediatric nutrition … Read more

Hooray! Biogen’s Breakthrough Alzheimer’s Drug?

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We’re disappointed that we missed highlighting Biogen (BIIB) to our membership many moons ago. Biogen’s stock has more than quadrupled since we launched coverage of the company in late 2011, and frankly, its stock has done nothing but rocket higher. To be fair, Biogen is a top-10 holding in the Health Care Select Sector SPDR (XLV), a position in the Best Ideas portfolio, so we do have some exposure to the blossoming biotech, but we could have done a better job pounding the table. The once- 9-rated on the Valuentum Buying Index, Health Care Select Sector SPDR has approximately doubled since it was added to the Best Ideas portfolio, but we know that may not be good enough. The news … Read more

Dividend Increases for the Week Ending December 19

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Below we provide a list of firms that raised their dividends during the week ending December 19. 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 3M (MMM): now $1.025 per share quarterly dividend, was $0.855. AES (AES): now $0.10 per share quarterly dividend, was $0.05. Amgen (AMGN): now $0.79 per share quarterly dividend, was $0.61. Andersons (ANDE): now $0.14 per share quarterly dividend, was $0.11. Apollo Residential Mortgage (AMTG): now $0.45 per share quarterly dividend, was $0.44. AT&T (T): now $0.47 per share quarterly dividend, was $0.46. Balchem (BCPC): now $0.30 … Read more