Shares of Bristol-Myers Squibb(BMY) gained the most in 2011 among the large pharmaceutical companies, up more than 32% year to date. Pfizer(PFE) shares rose about 24%, while Watson Pharmaceuticals(WPI), which is working with Pfizer on an authorized generic version of cholesterol-fighter Lipitor, has seen its shares rise about 20%.
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This year investors got more comfortable with the "patent cliff," said Morningstar analyst Damien Conover. Investors used to be leery about a drug company that had a big patent expiration coming up, but now that they've seen Pfizer's stock gain despite the company losing its exclusivity on Lipitor on Nov. 30, this shows that "you can recover from a big drug expiration," said Miller Tabak health care strategist Les Funtleyder.Many of the major pharmaceutical companies seem to have stronger pipelines, good dividends and valuations that still seem reasonable, Funtleyder noted. Drug companies with high dividend yields include Merck(MRK) at 4.5%, Bristol-Myers at 3.9% and Pfizer at 3.7%. Investors who yearn for dividends might look to these companies next year. One trend investors should watch in 2012 is for what ailments these companies are creating drugs. Conover said he anticipates that firms dealing with less well-known, niche diseases will do better because they can corner the market in that area as well as usually get faster approval for a new drug.Looking to 2012, here are seven pharmaceutical companies to buy, according to analysts.
1 2 3 4 5 6 7 8 Next › Last »Bristol-Myers Squibb
Though Bristol-Myers Squibb's stock made a steep climb in 2011, CLSA's Kim Vukhac still thinks the stock has room to grow in 2012.Anti-coagulant Eliquis, which Bristol-Myers has in partnership with Pfizer, may be approved and launch sooner than Vukhac previously anticipated, which was mid- to late 2012. Despite this drug having two competitors, Vukhac said she thinks Eliquis is the strongest among the three.Bristol-Myers reported third-quarter net sales of $5.3 billion, an increase of 11% from the previous year. Sales of schizophrenia drug Abilify increased 14% in the quarter while heart attack and stroke prevention pill Plavix went up 8%. Vukhac's price target for Bristol-Myers is $35.Bristol-Myers shares have risen more than 32% year to date to $35.03.
« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »Pfizer
Despite losing exclusivity on its blockbuster Lipitor earlier this year, Pfizer is a buy according to CLSA's Kim Vukhac, in part because of its Eliquis partnership with Bristol-Myers Squibb. This stroke prevention drug for people with atrial fibrillation is anticipated to have a Fod and Drug Administraion decision date of March 18, 2012.Pfizer hopes to maintain about 40% of its Lipitor market share which could bring it $1 billion during its six-month exclusivity period, Gabelli's Jeff Jonas estimated.Pfizer reported about $50.7 billion in revenue in the first nine months of 2011.Vukhac has a price target of $25 for the stock.Shares of Pfizer increased more than 24% year to date to $21.75.
« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »Abbott Laboratories
Morningstar's Conover has a five star rating on Abbott Laboratories(ABT) based in part on his bullishness on one of the company's key products -- Humira. The drug is used to relieve symptoms of autoimmune disorders such as rheumatoid arthritis. Humira was Abbott's top-selling product in both the third quarter and the first nine months of 2011 with sales of $894 million and more than $2.3 billion, respectively. Humira saw 18.1% sales growth in the third quarter in the U.S. and 32% internationally, with 13.4% of that coming from favorable foreign exchange. Abbott also benefited from not having several major "patent cliffs" coming up, although it does have some patent expirations in 2012, Conover said. He has a fair value of $68 on the stock.Shares of Abbott climbed more than 16% year to date to $55.65.
« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »Johnson & Johnson
Being widely diversified has helped makeJohnson & Johnson(JNJ) a buy on some analysts' lists for next year. Gabelli analyst Jeff Jonas noted Johnson & Johnson has a strong pipeline and the company's consumer sector has been recovering after some recalls. He has a price target of $77 on the stock.ITG Investment analyst Dale Shinvarian likes Johnson & Johnson because it has enough cash flow for share repurchases and has seen a re-acceleration recently of its pharmaceutical program.Johnson & Johnson's global pharmaceutical sales were $6 billion in the third quarter, an increase of almost 9% from the prior year. U.S. pharmaceutical sales decreased about 6% while international sales rose almost 28%.Johnson & Johnson completed the acquisition of Johnson & Johnson-Merck Consumer Pharmaceuticals Co. in September; the business is going to be renamed McNeil Consumer Pharmaceuticals Co.Shares of Johnson & Johnson increased 5.38% year to date to $65.18.
« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »Merck
For investors with more of a long-term focus, Merck is a buy based on its pipeline's potential, according to CLSA's Kim Vukhac. There have not been any significant changes to the company's anticipated filings timeline for the period between 2012 and 215, but several promising Phase I and Phase II elements could have some upside potential in 2015 and beyond, she noted. Some of these projects are related to Alzheimer's disease and Hepatitis C.Merck's global total sales of $12 billion rose 8% in the third quarter with 5% of that coming from favorable foreign exchange. Almost $10.4 billion of those sales came from pharmaceuticals. Singulair was the company's top seller in the third quarter with about $1.3 billion in sales.Vukhac has a $43 price target on the stock.Merck shares have risen a little more than 5% this year to $37.89.
« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »Novartis
Conover also has a five star rating on Novartis(NVS), based in part on what he considers "one of the best pipelines" in the industry.In this pipeline are drugs such as BEZ235, BKM120 and BYL719, which work to stop the proliferation of tumors, and LCL161, which tries to kill cancer cells.Novartis had about $14.8 billion in sales in the third quarter; sales of pharmaceuticals increased 9% to $8.2 billion. Conover noted that Novartis has embraced finding solutions for more niche-like diseases, which typically means faster drug approval times and stronger pricing power. Novartis shares increased more than 4% year to date to $56.51.
« First ‹ Previous 1 2 3 4 5 6 7 8 Next › Last »Teva Pharmaceuticals
Gabelli's Jeff Jonas considers generic drugmaker Teva Pharmaceuticals(TEVA) a buy based on its potential for good, long-term profit and its ability to bank on the $28 billion in brand name drugs that will lose their exclusivity in 2012.Teva anticipates starting to sell its generic version of Pfizer's Lipitor in late May, which is one way the company already plans to benefit from expiring patents.Teva issued strong fiscal 2012 guidance on Wednesday with an expected $22 billion in net sales, up from the company's 2011 anticipated sales of $18.3 billion to $18.6 billion. Of the Israel-based pharmaceutical company's 2012 sales, $11.8 billion will come from generics, Teva said.Jonas noted that investors should watch out for Teva's dependence on the multiple sclerosis-related drug Copaxone. Teva has had this drug for 10 years and it is fighting to push its expiration date off, Jonas said. Copaxone makes up about 17% of the company's sales and about 20% of its profit, Jonas estimated.Teva shares are down about 20% year to date to $41.56.-- Written by Alexandra Zendrian >To contact the writer of this article, click here: Alexandra Zendrian >To submit a news tip, send an email to: tips@thestreet.com.>To follow the writer on Twitter, go to Alexandra Zendrian.
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