The biopharmaceutical industry is attracting vast investors from all around the world given its promising achievements in the past few years. Drug makers are constantly inventing more sophisticated drugs that are capable to combat serious diseases which have only limited treatment options. Yet, the operational and technological challenges are well-perceived by the investors. Imagine reproducing such powerful drugs reliably at an industrial scale requires a previously unknown sophistication. So how well are these companies performing despite all the changing pharmaceutical policies and rivalry amongst these companies for domination in the retail market? How aggressive are they stepping up their game to drive out other counterparts? You might want to read on to get some idea about this growing industry.
Released on: 22/08/2016
A takeover deal could be announced today for Medivation, a biopharmaceutical company that focuses on development and commercialization of medical innovative therapies. It specializes in making Xtandi, a prostate cancer drug, and the company reported an annual sales rate above $2 billion. Medivation was trading $67.16 when the market closed on Friday, with a valuation of $11.1 billion. Couple biotech companies such as Merck (MRK), Gilead (GILD), and Sanofi (SNY) had offered a buyout for Medivation earlier this year, but were unsuccessful. Pfizer failed to merge Allergan (AGN) after Obama’s administration made tax inversion merger deals less attractive. We ask Call Levels users to monitor the share price for Pfizer, as well as Medivation, to set levels in anticipation of the merger and acquisition.
Released on: 21/08/2016
Valeant Pharmaceuticals International Inc is expected to name Paul Herendeen as its new CFO according to reliable sources. Mr Herendeen is currently the executive vice president and CFO of Zoetis, who oversees the company’s Finance and IT organization. He will be replacing Robert Rosiello while Mr Rosiello will remain as head of corporate development and strategy. The internal restructuring is a response to the constant rivalry between drug-making companies. Valeant expanded its executive committee and granted senior executives larger authority to make strategy more expandable. Mr Herendeen had successfully steered Zoetis toward positive growth through cost cuts, acquisition and more. Shares of Zoetis are up almost 50% since Mr Herendeen joined. If Mr Herendeen joins Valeant, we might expect to see share prices going up in these few days due to investors’ trust in Mr Herendeen’s capability. Earlier this year, Valeant was close with defaulting on debts due to late annual-report filing. However, Mr Papa, former chief executive of Valeant, had managed to turn things around and offered analysts a reaffirmation of its earning. Fidelity has also raised its stakes sharply in Valeant this year. Yet, the issue of accounting fallout is still prevalent and lawsuits was filed by T. Rowe Price Group Inc against Valeant, alleging that Valeant was involved in a fraudulent scheme. We advise Call Levels users to set price alerts for Valeant stock due to continuous negative speculation.
Released on: 19/08/2016
Gilead is generating quarterly revenues of nearly $8 billion, a number which is much higher than its counterparts. However, GILD still receives the lowest valuations. Despite GILD’s ability to grow revenue from merely over $3 billion to over $32 billion in the past 10 years, its low forward P/E ratio (7.02) indicates that market is not favoring Gilead’s products. During the second quarter of this year, their signature drug Harvoni which accounted for nearly 36% of their total sales saw a decrease in sales. However, since there are alternative effective treatments for Hepatitis which are also 30% cheaper, we see double pressure on their stocks. Stock is down 21.28% since the start of this year due to a buyback program that failed to bolster their revenue stream. Despite all the chaos surrounding Gilead, they are still in a strong cash position. They are compelled to bring in other drugs into Gilead’s portfolio if they want their stock price to break out from depression. Revenue outlook for Gilead is not positive but investors should take note of their portfolio’s continuous growth and the amount of cash in hand.
Released on: 22/08/2016
Novartis AG is a holding company which engages in development, manufacturing and marketing of a range of healthcare products led by pharmaceuticals. Its signature products include Galvus, Voltaren, and AirFluSal Forspiro to name a few. It saw a decrease in stock price about -2.97% during the past 4 weeks compared to the S&P 500. In the past one week, the selling of the stock is down by another -0.87% relative to the S&P 500. Novartis is up 7.32% in the 3-month period. Stock performance was performing worse when it is compared year-to-date. The stock opened at $81.47 on Friday but it didn’t top out. And eventually the stock closed at $81.34. Equity analysts at Morgan Stanley has downgraded the rating on NVS. The stock is labelled as “underperform” since this April. What’s your technical approach to Novartis AG? Comment and let us know what’s your call level for NVS is.