PFE

Surveying Fourth Quarter Earnings at Health Care Firms

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The broader equity markets have been under pressure for much of January, and while it may be tempting to consider completely exiting stock investing for a time, we’re staying the course with both of our actively-managed portfolios. We had been expecting a contraction in price-to-earnings (P/E) multiples across the broader market (see our outlook here), and the performance thus far in 2014 has not been surprising. In case you may have missed it, I sent out some very important thoughts over the weekend to keep in mind as uncertainty and volatility increase through the course of 2014: Stay focused on @Valuentum portfolio holdings (best ideas), #asset allocation (cash) in portfolios and #prudence in allocating new capital. — Brian Nelson, CFA … Read more

Pfizer’s and Merck’s 3Q Performance

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Whereas revenue advanced in Bristol-Myers’ (BMY), Eli Lilly’s (LLY), and AbbVie’s (ABBV) respective calendar third-quarter results, the same cannot be said about the performance of Pfizer (PFE) and Merck (MRK) during the equivalent period. Pfizer’s third-quarter report, released Tuesday, showed that net revenue dropped 2% as strength in its smallest segment, ‘Oncology’, failed to offset weakness at the rest of the firm. Pfizer continues to deal with the impact of product losses of exclusivity (Lipitor) and the expiration of its Spiriva collaboration in certain countries, which overwhelmed growth in its blockbuster Lyrica (up 11%), Celebrex (up 13%), Inlyta (up 186%), and Xalkori (up 92%). Sales of Pristiq advanced 15%. Emerging market expansion tallied 5% in the period. The US basis … Read more

Surveying 3Q Performance from Big Pharma: Bristol-Myers, Eli Lilly, and AbbVie

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Bristol-Myers On Wednesday, Bristol-Myers (BMY) showcased the strength of its key marketed products in its third-quarter report. The firm experienced a 9% increase in net sales and a 12% jump in non-GAAP diluted earnings per share. Bristol-Myers also confirmed its 2013 non-GAAP earnings per share range of $1.70 to $1.78 per share. Looking at its current marketed portfolio, Abilify, its largest revenue generator, faced a 16% decline, though this was offset by strength in Yervoy, which grew 33%, Orencia, which grew 22%, and Sprycel, which grew 20%. Yervoy doesn’t lose exclusivity in key markets until after 2020 (2023 in the US), Orencia loses exclusivity in Japan, the EU, and the US between years 2017 and 2019, and Sprycel doesn’t lose … Read more

Why Zoetis’ Second Quarter Was Decent

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Former Pfizer (click ticker for report: ) business unit Zoetis (ZTS) announced solid second quarter results Tuesday morning. Zoetis is relatively new as a public company, and this was the first time it reported results as a completely separate entity. Zoetis focuses on animal nutrition for both livestock and domesticated animals and is among the few animal nutrition “pure plays” available to investors. In the period, revenue increased 2% on a year-over-year basis (4% excluding currency), to $1.1 billion, roughly in-line with consensus estimates. Adjusted net income per share rose 3% year-over-year to $0.35, also consistent with consensus expectations. The majority of Zoetis’ revenue comes from the US (39% in the second quarter), where revenue grew 4% year-over-year to $437 … Read more

Pfizer and Merck Show Revenue Declines; Pipelines Remain Strong

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Pfizer’s (click ticker for report: ) and Merck’s (click ticker for report: ) second-quarter performances revealed ongoing revenue weakness due to key patent expirations, but we like the progress they are making in their respective drug pipelines. In Pfizer’s second quarter (results released Tuesday), revenue fell 4% from the same period a year ago, after adjusting for currency. Strength in ‘Oncology’ (up 28%) from Inlyta and Xalkori and a couple key products (namely Lyrica and Celebrex) did little to offset the slide in operational revenues at its ‘Primary Care’ and ‘Established Products’ segments, where revenue dropped 15% and 7%, respectively. We point to the loss of exclusivity of Lipitor and heightened generic competition for the difficult revenue performance. In Merck’s … Read more

ASCO Reveals That Big Pharma Is Alive

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This weekend, the annual American Society of Clinical Oncology (ASCO) kicked off in Chicago. The theme this year? Immunotherapy. The conference is traditionally littered with news from biotech companies revealing results from clinical studies, but this year’s event also included some news from big phama companies that haven’t been bursting with pipeline breakthroughs in years. Let’s take a look at some of the news out of the event. Firms Highlighted: Bristol-Myers Squibb, Merck, GlaxoSmithKline, Amgen, Galena Biopharma, BioMarin, Celgene. Bristol-Myers Squibb Source: BMY ASOC 2013 Presentation Bristol-Myers Squibb (click ticker for report: ) isn’t exactly what we’d call an under-appreciated company. Over the past year, shares are up 43%. However, this year’s ASCO only further ignited the fire. The company … Read more

Pfizer and Eli Lilly Report Strong Performance; Drug Pipelines Continue to Advance

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Pfizer (click ticker for report: ) and Eli Lilly (click ticker for report: ) reported their respective fourth-quarter results Tuesday, and we were pleased with the performance. Pfizer’s $15.1 billion in revenue (down 7%) and $0.47 in adjusted earnings per share (down 4%) topped estimates, while Eli Lilly’s $5.96 billion in revenue (down 1%) and $0.85 in earnings per share (down 2%) also surprised the Street to the upside. Both companies are dealing with patent expiration on blockbuster drugs—Pfizer’s cholesterol-fighter Lipitor and Lilly’s schizophrenia drug Zyprexa. Pfizer expects to stem the losses from Lipitor with new drugs such as Xeljanz for rheumatoid arthritis and Eliquis, an anti-clotting drug that helps prevent stroke and systemic embolism in patients with nonvalvular atrial … Read more

Fiscal Cliff Averted; Aerospace Rallying

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After a volatile December, two of our favorite aerospace names, Astronics (click ticker for report: ) and EDAC Technologies (click ticker for report: ), are rallying significantly after a deal was finally reached to avert the fiscal cliff. Precision Castparts (click ticker for report: ), which had steadily moved higher during the fiscal-cliff ordeal thanks to optimism surrounding its planned acquisition of Titanium Metals (TIE), is also seeing strength today. We assumed both profit taking and overblown fears of defense cuts were the culprit behind the increased volatility, and it seems as though that could be the case. We continue to see substantial upside at these firms thanks to the massive, multi-year commercial aerospace backlogs of the large airframe makers. Our Best Ideas portfolio … Read more

You Are Ahead of the News As a Valuentum Member

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Remember When We Said Economic Prognosticators Were Off Their Rockers? From the September 2012 edition of our Best Ideas Newsletter (see page 2), released September 15, 2012: “Could you imagine if you had listened to bond-king Bill Gross (please note he is not the equity king), Marc Faber (author of the Gloom, Boom & Doom report) or the Economic Cycle Research Institute (ECRI), which called for a recession in September 2011 – some 30% in the S&P 500 ago (yes, 30%!). Aside from being incorrect, bearish economic prognosticators fully admit that their expectations have little to do with what may happen to the equity markets in the future (as Bernanke’s unlimited QE has shown). Still, such admissions do not stop … Read more

Inside AbbVie: A Look at a New Pharmaceutical Giant

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On January 1, medical giant Abbott (click ticker for report: ) will start trading as two firms, Abbott and AbbVie. The companies will form two distinct, publicly-traded businesses, allowing the market to value each company separately and uniquely. Pharmaceuticals will be housed in AbbVie, while medical diagnostics, baby food, and generic drugs will remain a part of Abbott. Let’s first dig into AbbVie. We’ll have a follow up article on the new Abbott in coming days. AbbVie Led by Humira Headlining the new pharmaceuticals business is the blockbuster drug Humira, which had over $7.9 billion in sales in 2011 alone. Though originally approved for rheumatoid arthritis in 2003, the drug has been approved to treat Crohn’s disease, plaque psoriasis, ulcerative … Read more