Stock Watch

J&J’s Medtech division outshone pharma while recently launched innovative products contributed minimally: it is to be hoped investors’ reactions to the first set of big pharma Q1 results will not set the tempo for earnings season.

In contrast to the SEC’s view that public companies’ regulatory filings give investors all the information needed to make an investment decision, the discount rate used to value a company may not reflect all its risks.

Healthcare conglomerates that divorce consumer, animal health and even generics businesses from their pure-play branded pharmaceutical groups could leave a less diversified and riskier sector in uncertain times. But the advantages are apparent.

The overused phrase ‘pipeline in a product’ translates to ‘disappointment in a product’ when the number of indications in the pipeline contracts towards zero.

Social media-promoted vaccine hesitancy could have been a factor in the dip in established fourth-quarter vaccine sales with younger age groups targeted rather than seniors. Other drug categories may benefit from lifestyle changes prompted by the pandemic.

As drug pricing continues its ascent among hot button issues, the multi-million-dollar price tags for one-and-done advanced therapies, their justification and reimbursement all remain unaligned.

It is not ideal to miss the emergence of competition that could reduce your market. Even worse is not to find out that your drug is inferior to generic competition until the end of Phase III.

When AstraZeneca closed out big pharma earnings season, its usually dominant therapeutic franchise missed analysts’ expectations. Merck’s, on the other hand, did not disappoint.

The sales performances of the GLP-1 agonists dominated the earnings of Novo Nordisk and Lilly, with both stocks hitting 52-week highs after their results. But one moved ahead of the other in an important strategic bottleneck.

Claiming quarterly wins by expressing sales at constant exchange rates or including one-off tax breaks does not endear companies to investors because they are unpredictable and not reproducible.

While attempting to move beyond post-pandemic unfavorable revenue comparisons, other unfavorable comparisons emerged at Pfizer.

When facing the loss of exclusivity of your biggest product, bold deployments of capital are required to maintain sales growth, not stock buy-backs.

To emerge from a wilderness period or biotech winter where generalist investors shun the sector, biotech’s good news needs to outweigh the bad and be attractively priced. We may not be there yet.

The biotech sector is so diverse that for every acquisition there will be at least one second-best. Even after years of independence following a drug approval, investors keep hoping that their pharmaceutical Prince Charming will arrive.

Investors’ euphoria on Cytokinetics’ positive Phase III study may be tempered by its high debt, pass-through royalties, entrenched competition and the FTC in the terms of any transaction.

A bumper December of licensing transactions and acquisitions involving biotech companies brought the feelgood factor back to the sector. But while big spending in the run-up to Christmas may not dent pharma’s credit cards, it might crimp its investors’ dividends.