Seeking Alpha: Sanofi's Trying To Go On Offense While Playing Defense

Drug companies face what I consider to be an under-appreciated dilemma when managing their portfolios - the tradeoffs between market size and competition. Sanofi (NYSE:SNY) has done quite well for itself for years by working within a small oligopoly in insulin and vaccines, but now there are concerns that biosimliars and novel compounds from Novo Nordisk (NYSE:NVO) and Lilly (NYSE:LLY) will threaten that business. What's more, while Sanofi does have good exposure to rare diseases through its Genzyme business and multiple potential blockbusters by virtue of its relationship with Regeneron (NASDAQ:REGN), it has what increasingly looks like a token presence in oncology - the must-have market in many investors' minds.

I can't say that I'm a big fan of Sanofi at today's price. I think the company has backed itself into a corner in diabetes where it will have to fight hard to push me-too and also-ran drugs and I expect ample competition in cholesterol and anti-inflammatory/autoimmune diseases. I think long-term revenue growth in the mid-single digits and FCF margins in the mid-20%'s are reasonable expectations for the company, but that's not enough to drive an attractive valuation.

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Sanofi's Trying To Go On Offense While Playing Defense

Seeking Alpha: A New Beginning For Lundbeck, But Not A Clean Start

These are interesting times for H. Lundbeck (OTCPK:HLUYY) (LUN.CO) and its shareholders. This smallish Danish specialty pharmaceutical company is attempting to launch new drugs into crowded markets with questionable differentiation and has a relatively modest (and high-risk) pipeline, as well as limited resources with which to acquire new candidates. Amidst these challenges, the company saw its CEO resign for violating its code of ethics - hardly what investors ever want to see amidst challenging multi-market drug launches.

Wednesday may go down as a big turning point. There are still very legitimate worries about the future of the company's newest launches, but the company announced the hiring of a very well-regarded pharma executive as its new CEO. His options may be limited by Lundbeck's resources and reputation, but investors who are positive on the company's new drugs and underlying approach to drug development are going to very much look forward to what he can offer in terms of better sustained performance.

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A New Beginning For Lundbeck, But Not A Clean Start

The Motley Fool: MannKind Stock: Afrezza Approved at Last, But Will Sales Disappoint?

MannKind's (NASDAQ: MNKD  ) long and arduous path to FDA approval has finally reached a happy ending, with the company announcing late on Friday that the agency had approved Afrezza, the company's inhaled insulin product. Approval is a major event for MannKind, but the company still needs a commercial partner and the approved label for Afrezza doesn't do the product/company any particular favors.


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MannKind Stock: Afrezza Approved at Last, But Will Sales Disappoint?

The Motley Fool: Who Will Win This $45 Billion Market?

The diabetes drug market continues to be a street fight between major pharmaceutical companies like Sanofi (NYSE: SNY  ) , Novo Nordisk (NYSE: NVO  ) , and Lilly (NYSE: LLY  ) . Considering that about $45 billion a year in spent on therapeutic agents for diabetes (drugs and insulin), it's no wonder why these companies compete so aggressively and look to gain labeling advantages through their clinical trials. 

This year's American Diabetes Association annual meeting has come and gone, with not a lot in the way of market-shifting events. Sanofi comes out of the meeting looking a little weaker, Novo a little stronger, and Lilly looks like the most aggressive player in the space.

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Who Will Win This $45 Billion Market?

The Motley Fool: Is Biogen Idec Inc a Buy?

This year has turned against biotech investors, as the long-awaited correction came on hard in March and April. While conditions seem to have stabilized for the time being, Biogen Idec (NASDAQ: BIIB  ) remains an outperformer as investors have slower to dump shares of more established biotechs with strong launch and pipeline stories like Biogen, Gilead, and Regeneron. Biogen's pipeline is has higher risk than many of its peers, but the rewards if SMNrx, STX-100, or the anti-LINGO antibody BIIB 033 work out will be considerable and Biogen has lower risk drivers like the ongoing Tecfidera launch and rollout of new hemophilia compounds to keep investors engaged.

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Is Biogen Idec Inc a Buy?

The Motley Fool: Are Investors Putting Too Much Faith In Novo Nordisk?

It is hard to be too critical of Novo Nordisk (NYSE: NVO  ) , as this Danish biopharma specialist practically mints money with its leading franchises in diabetes, hemophilia, and growth hormones. The company is facing more challenges than it has in the past, though, as biosimiliars and new formulations threaten to change the insulin market and reimbursement pressures become more visible. It is hard to call Novo Nordisk underpriced, but a stock that looks poised to generating market-matching returns behind the security of good economic moats does have some appeal on a risk-adjusted basis.

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Are Investors Putting Too Much Faith In Novo Nordisk?

The Motley Fool: Will Baxter International Inc's Split Unlock Shareholder Value?

If a strategy has worked before, try it again. Baxter (NYSE: BAX  ) has never been shy about identifying businesses that lie outside its core operating focus and being willing to set them free. Edwards Lifesciences, Caremark, and Allegiance Healthcare (now part of Cardinal Health) were all once under the Baxter umbrella, and arguably did better on their own than they would have as parts of Baxter.

Now the company is doing it again, choosing to spin off its biopharmaceuticals business as an independent publicly traded company. Investors cheered the move, as it does remove some issues that were clouding the value of the company's other operations.

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Will Baxter International Inc's Split Unlock Shareholder Value?

The Motley Fool: What Does This Rejection Mean for Eli Lilly?

In the extremely competitive world of Big Pharma, companies have to be careful to keep all of their ducks in neat little rows. I have made no secret of the fact that I believe Lilly (NYSE: LLY  ) struggles in that regard, and yesterday's surprising announcement that the FDA rejected empagliflozin over manufacturing issues at a plant owned and operated by its partner Boehringer Ingelheim doesn't help matters.

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What Does This Rejection Mean for Eli Lilly?

The Motley Fool: Novo Nordisk A/S's Brief Value Run Seems Over

Novo Nordisk (NYSE: NVO  ) has long been one of the best-run, most-focused, and most-successful specialty drug companies. It has also long been one of the most expensive, as investors have happily paid up for clockwork growth, leading share, and an excellent R&D enterprise.

The past year was an unusual one for Novo, though, as there were some real setbacks in the company's operations. Those setbacks had the shares trading for as close to "value" as it has in a long time, but the 30% run since November has these shares back at a premium valuation.

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Novo Nordisk A/S's Brief Value Run Seems Over

The Motley Fool: Sanofi SA Looks Like One Of The Better Bargains In Big Pharma

Even with the recent weakness in the market, there is no surfeit of cheap pharma stocks. Maybe it's not so surprising that Sanofi (NYSE: SNY  ) , a company which has taken a different path than most of its Big Pharma peers, stands out as an exception. Sanofi has not concentrated so keenly on the oncology or anti-inflammatory spaces, and the company has a sizable direct presence in many emerging markets.

While Sanofi's guidance for 2014 was both disappointing and short on details, I think these shares are worth consideration. Strong franchises in diabetes, rare diseases, and vaccines generate good cash flow, and a broad pipeline gives the company a more diversified business mix. My growth expectations are higher than for most pharma companies, but I believe the shares ought to trade in the $50's today.

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Sanofi SA Looks Like One Of The Better Bargains In Big Pharma

The Motley Fool: Alnylam Offers an Exciting Rare Disease Pipeline, but Expectations Are High

"Biotechs are risky" is a standard boilerplate warning when writing about the sector, but some situations are riskier than others. In the case of Alnylam Pharmaceuticals (NASDAQ: ALNY  ) , the sell-side seems so eager to make a bullish case that uncommonly high approval odds are already being applied to the company's early stage pipeline.

There is also still the prospect of competition from Isis Pharmaceuticals (NASDAQ: ISIS  ) and its partner GlaxoSmithKline (NYSE: GSK  ) , as well as other large players like Sanofi (NYSE: SNY  ) , Novo Nordisk (NYSE: NVO  ) , and Baxter (NYSE: BAX  ) . Against that is the possibility that Alnylam is following a path that could closely resemble that of other rare disease biotechs like Genzyme, Alexion (NASDAQ: ALXN  ) , or BioMarin (NASDAQ: BMRN  ) .

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Alnylam Offers an Exciting Rare Disease Pipeline, but Expectations Are High

The Motley Fool: Baxter International - The Street Is Too Negative On A Proven Champ

Even though it is a large med-tech company with a market cap over $37 billion, Baxter International (NYSE: BAX  ) just doesn't seem to garner all that much investor interest, or at least not as much as peers/rivals like Biogen Idec (NASDAQ: BIIB  ) , Novo Nordisk (NYSE: NVO  ) , CareFusion (NYSE: CFN  ) , and Hospira (NYSE: HSP  ) . Institutions pay attention, though, and investors may be in a good position to benefit from their skepticism. While the Street is wrapped up in trying to guess just how much business Baxter will lose in its hemophilia and specialty pharmaceuticals businesses to competition, it looks as though the market may be missing the forest for the trees.

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The Motley Fool: Bristol Myers Squibb and AstraZeneca: A Big Break-Up in the Diabetes Space

Breaking up is supposed to be hard to do, but it happens often enough in the diabetes space. After a disappointing run with multiple drugs and rising FDA demands for new drugs, Bristol-Myers Squibb (NYSE: BMY  ) and AstraZeneca (NYSE: AZN  ) have reached an agreement to end their diabetes joint venture, with AstraZeneca buying out Bristol-Myers' stake. Although there are ways in which this deal can work out positively for AstraZeneca, competition from the likes of Novo Nordisk (NYSE: NVO  ) and Eli Lilly (NYSE: LLY  ) makes this a risky move for AstraZeneca and likely a savvy deal for Bristol-Myers.

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Bristol Myers Squibb and AstraZeneca: A Big Break-Up in the Diabetes Space

Seeking Alpha: Will More Good Data From Lexicon Finally Bring In A Partner?

I've owned quite a few biotechs over the years, but Lexicon Pharmaceuticals (LXRX) is maybe one of the most frustrating I've owned. Forget about the company's prior business model of selling gene knockout data to drug developers and its near-death experience about five years ago - the simple fact that the company has some very interesting clinical candidates but can't get much love or attention from prospective partners is plenty frustrating in its own right.

Well, here we go again. Lexicon announced very encouraging data on its lead compound for diabetes ('4211), with the company's proprietary SGLT 1/2 inhibitor showing solid glucose control in diabetes patients with significant renal impairment. I don't really think this study is surprising to Lexicon bulls, but the Street is clearly cheered by the news and I suspect part of that enthusiasm is the hope/expectation that the last real obstacle to a partnership agreement may now be in the past.

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Will More Good Data From Lexicon Finally Bring In A Partner?

Investopedia: Novo Nordisk Getting Its Trial By Fire

The past year or so has shown that Novo Nordisk (NYSE:NVO) isn't immune from seeing some serious challenges to its business. Between a serious setback in its insulin development program and nagging worries about incretins, 2013 isn't going to go down as a great year in the history of Novo Noridsk. All of that said, I have little doubt that the company will continue to be an uncommonly strong pharma company, with huge leverage to one of the fastest-growing diseases in the world. Although I think broadening both the diabetes business and the overall business would be beneficial, Novo Nordisk really doesn't have to do much to continue performing at a high level.

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Investopedia: Can Sanofi Investors Just Blame It On Rio?

Sanofi (NYSE:SNY) was supposed to be a relatively solid Big Pharma company in 2013. True, the company is going through some pressures from patent expirations and internal drug development issues have created a soft spot for growth, but Sanofi's strong emerging market exposure was supposed to help, as was the fact that about one-third of the company's revenue comes from non-branded drug businesses.

Instead, Sanofi delivered a surprisingly large miss for the second quarter, a miss that means a little more in the typically more predictable Big Pharma space. While it may be true that problems in Brazil were a large part of the reported miss, worse than expected results in ex-Brazil emerging markets, vaccines, and animal health, coupled with higher than expected SG&A spending to support new launches, has reset expectations to a lower level. Although Sanofi shares are not overvalued today and the company could demonstrate fairly quickly that Q2 results were just an aberration, it's harder to make a forceful pro-Sanofi argument today.

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Seeking Alpha: Forget Arena Vs. Vivus - Zafgen May Be The Ultimate Winner

As an investor and writer with no financial stake in any of the companies involved, watching the message board battles between Arena (ARNA) and Vivus (VVUS) shareholders is good theater. Both companies have FDA-approved drugs on the market that are effective in helping obese people lose weight, but neither Arena's Belviq nor Vivus's Qsymia look like "the one obesity drug to rule them all". Belviq is hampered by modest efficacy, while Qsymia can produce scary side effects and has a more limited marketing effort behind it.

Quite frankly, though, the Arena-versus-Vivus battle may ultimately be just the undercard for the real battle. A private biotech company by the name of Zafgen has drug in clinical testing that has shown very impressive efficacy and solid safety, and happens to work by a completely different mechanism than biotech and pharma companies have pursued so far. While Arena and Vivus likely have at least three years before Zafgen's drug becomes a clear and present danger, investors in those companies may want to consider the risk that their parties could be brought to a premature end if Zafgen can continue to produce such strong data.

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Forget Arena Vs. Vivus - Zafgen May Be The Ultimate Winner

MassDevice: The Strange Case Of The Diabetes Market

It wasn't so long ago when diabetes was one of the hot sectors of med-tech where many companies felt they had to have a presence, no matter what the cost. And while it is true that the incidence of diabetes continues to increase at worrisome rates in many countries, the diabetes market is no longer a “build it (or buy it), and the growth will come” type of proposition. It may not be quite true that diabetes as become a “winner takes all” sort of market, it is definitely a market where data, pricing, and marketing muscle make a big difference.

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Investopedia: Amgen Chased By The Bubble

There are two relatively heated debates that bear directly on Amgen (Nasdaq:AMGN) and its stock. First, is Amgen still really a biotech, or is it really more of a Big Pharma company? Second, is there a biotech/pharma bubble (and if so, how will valuations fare post-popping)? Investors' perspectives on these two issues likely have a lot to do with whether they see value in these shares, for while Amgen is certainly a well-run company looking to become an increasingly balanced advanced drug developer, the valuation is somewhat demanding unless the pipeline really delivers.

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http://www.investopedia.com/stock-analysis/050813/amgen-chased-bubble-amgn-pfe-sny-teva-celg-nvo-mrk-hsp-abt-affy-biib-gild.aspx

Seeking Alpha: If Investors Won't Buy Shire, Big Pharma Should

Given the premium that Novo Nordisk (NVO) enjoys for its very strong position within diabetes care, you might think that a company with strong positions in two significant pharmaceutical areas would enjoy an even bigger premium. That's not the case for Shire (SHPG), though, and investors may have an opportunity here to take advantage of one of the few bargains in the pharma space. Moreover, with Big Pharma likely on the prowl for add-on deals, Shire's relative value may make it an appealing target.

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If Investors Won't Buy Shire, Big Pharma Should