Swiss giant Roche (NASDAQOTH: RHHBY )
swims in treacherous waters. The pharmaceutical industry can be a
challenging place to operate, as companies must spend $1 billion or more
to develop a new drug and a majority of those that are put into
development will fail to reach the market. Even if a company can beat
the odds and get a drug to market, it will almost certainly face
multiple competitors and a limited time of patent protection before
generic manufacturers can sell knock-offs.
Even with that backdrop, Roche looks like a good bet to
continue paying a healthy dividend. Roche has established itself as the
leading player in biologic drugs and oncology, and a rich pipeline
(backed by spending nearly 20% of sales dollars on R&D) bodes well
for the future. Biosimilars are a threat to the company's established
products and emerging areas like immuno-oncology have no shortage of
would-be rivals, but Roche pursues a good balance of risk and reward
with its pipeline and steady debt reduction efforts should free up even
more capital in the coming years.
Continue reading here:
Is Roche's Dividend In Danger?
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