While the seemingly endless M&A process among generic drug companies means that the acquisition of Par Pharmaceuticals (PRX)
isn't a complete surprise, it's an interesting deal all the same. Not
only does this deal point to the cost of not having a truly global
business, but it also seems to speak to the extent to which this sector
could see pipeline-driven valuation worries in the coming years.
Please click here for more:
TPG's Bid For Par Reflects More Difficult Generic Environment
Showing posts with label Watson Pharmaceuticals. Show all posts
Showing posts with label Watson Pharmaceuticals. Show all posts
Tuesday, July 17, 2012
Wednesday, April 25, 2012
Seeking Alpha: Amgen Looking, Thinking, And Acting More Like A Pharma Co.
With Amgen's (AMGN) recent decisions to acquire emerging market generic drug companies, partner with Watson (WPI) for biosimilars development, and out-license non-core drugs to AstraZeneca (AZN),
there's really no more dispute that Amgen has graduated to the ranks of
Big Pharma. This isn't a bad thing; it just changes how investors ought
to approach and value the company. While there are patent and
competitive risks to this name, all in all it seems Wall Street has
taken an overly dim view of its prospects.
Read the full article here:
Amgen Looking, Thinking, And Acting More Like A Pharma Co.
Read the full article here:
Amgen Looking, Thinking, And Acting More Like A Pharma Co.
Wednesday, February 22, 2012
Seeking Alpha: Mylan Looks To Reap A Harvest Of Patent Expirations
In a world where doing a little bit of everything has become popular among drug companies, Mylan (MYL) has stuck to its guns. Unlike Teva (TEVA) and Sandoz (part of Novartis (NVS)), Mylan really is just about generic drugs and the opportunity to leverage one of the largest global franchises in that segment of the drug market. At the bottom line, Mylan is an interesting investment prospect, but really needs to deliver more to be a top choice.
Ending The Year In Line
Mylan did not offer a lot of surprises to close this fiscal year. Revenue rose about 7%, with generics up about 5% overall and the small (less than 10%) specialty business up almost 38%. The generics business was definitely a haves-and-have-not situation this quarter, as the North American business grew almost 13% on good volumes and strong pricing, while the European business saw revenue drop 12% on weak pricing.
Please click the link for the full piece:
Mylan Looks To Reap A Harvest Of Patent Expirations
Ending The Year In Line
Mylan did not offer a lot of surprises to close this fiscal year. Revenue rose about 7%, with generics up about 5% overall and the small (less than 10%) specialty business up almost 38%. The generics business was definitely a haves-and-have-not situation this quarter, as the North American business grew almost 13% on good volumes and strong pricing, while the European business saw revenue drop 12% on weak pricing.
Please click the link for the full piece:
Mylan Looks To Reap A Harvest Of Patent Expirations
Wednesday, February 15, 2012
Seeking Alpha: With New Management, Teva Seeks To Reclaim Past Glories
To the credit of Teva Pharmaceuticals' (TEVA) board, if you underperform in the top spot there, you will be replaced. Recent years have seen the company struggle to deliver the sort of performance that shareholders had come to expect, and missteps in manufacturing and clinical development didn't help matters. Now the company has a new CEO, strong generic candidates, a growing branded business, and perhaps a chance to regain past esteem.
A Fairly Solid Q4
Teva's fourth quarter results were solid, if not radically ahead of expectations. Revenue rose about 29% as reported, with the inclusion of Cephalon adding a significant amount of revenue growth. Revenue from generic drugs and ingredients rose 12% overall, but were down 5% in the U.S. Branded drug sales rose 68% as reported or about 25% on an organic basis, with Teva's key multiple sclerosis drug Copaxone up 11%.
Follow this link for the full article:
With New Management, Teva Seeks To Reclaim Past Glories
A Fairly Solid Q4
Teva's fourth quarter results were solid, if not radically ahead of expectations. Revenue rose about 29% as reported, with the inclusion of Cephalon adding a significant amount of revenue growth. Revenue from generic drugs and ingredients rose 12% overall, but were down 5% in the U.S. Branded drug sales rose 68% as reported or about 25% on an organic basis, with Teva's key multiple sclerosis drug Copaxone up 11%.
Follow this link for the full article:
With New Management, Teva Seeks To Reclaim Past Glories
Thursday, August 4, 2011
Investopedia: Teva And Mylan Show Some Value Remains in Generics
Generic drug company stocks have been all over the map this year, with companies like Teva (Nasdaq:TEVA) struggling, companies like Watson (NYSE:WPI), and the likes of Mylan (NYSE:MYL) and Impax (Nasdaq:IPXL) falling somewhere in between. While the sector is still broadly benefiting from popular branded drugs going off patent, pressures from large buyers like AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH) and declining patient-doctor visits are making for a more challenging operating environment.
Mylan - Good Here, Not So Good Over There
Mylan reported 15% revenue growth (10% in constant currency), with North American sales rising over 27%. Asia-Pacific sales also grew by 17%, but Europe was flat as reported and down double-digits on a constant currency basis due in part to government-mandated price cuts in many European markets.
Continue to the full story via this link:
http://stocks.investopedia.
Mylan - Good Here, Not So Good Over There
Mylan reported 15% revenue growth (10% in constant currency), with North American sales rising over 27%. Asia-Pacific sales also grew by 17%, but Europe was flat as reported and down double-digits on a constant currency basis due in part to government-mandated price cuts in many European markets.
Continue to the full story via this link:
http://stocks.investopedia.
Friday, May 6, 2011
Investopedia: With Mylan, Maybe Smaller Is Better
Quite a lot of attention has gone to Teva (Nasdaq:TEVA) recently, as investors have tried to digest the impact of potentially greater competition in multiple sclerosis and the company's acquisition of Cephalon (Nasdaq:CEPH). While Teva has its own merits, investors may want to spend a little time on Mylan (NYSE:MYL), Teva's considerably smaller competitor. Though there is a risk that investors are underrating the patent challenges coming after 2013, growth and valuation may be more interesting here.
A Solid Start to the Year
Most analysts seemed quite pleased with Mylan's results and that is something of a mixed bag itself - happy analysts are better than angry analysts, but Mylan is already a well-liked and widely-owned stock. Nevertheless, the company did report 12% overall revenue growth, with the company's small specialty pharmaceutical business adding a small above-trend kicker (up 14%). (For related reading, see Teva And Cephalon Solve Each Other's Problems.)
While U.S. revenue was up a very strong 22%, overseas performance was much more mixed. Growth of 10% (constant currency) was alright, but European revenue dropped 4% in constant currency. Mylan is presently suffering through some European government pricing cuts, and they are certainly not alone in this regard, but building overseas growth has often been something of a challenge here.
Read the full piece at Investopedia:
http://stocks.investopedia.
A Solid Start to the Year
Most analysts seemed quite pleased with Mylan's results and that is something of a mixed bag itself - happy analysts are better than angry analysts, but Mylan is already a well-liked and widely-owned stock. Nevertheless, the company did report 12% overall revenue growth, with the company's small specialty pharmaceutical business adding a small above-trend kicker (up 14%). (For related reading, see Teva And Cephalon Solve Each Other's Problems.)
While U.S. revenue was up a very strong 22%, overseas performance was much more mixed. Growth of 10% (constant currency) was alright, but European revenue dropped 4% in constant currency. Mylan is presently suffering through some European government pricing cuts, and they are certainly not alone in this regard, but building overseas growth has often been something of a challenge here.
Read the full piece at Investopedia:
http://stocks.investopedia.
Wednesday, April 13, 2011
Seeking Alpha: Johnson & Johnson: Potential M&A Targets To Recharge Growth, Divert Investor Attention
There is no question that healthcare and personal care giant Johnson & Johnson (NYSE: JNJ) has been an active acquirer over the years – doing over 20 deals worth more than $40 billion in the last ten years alone. With the company struggling through a dry spell in organic growth and embarrassing itself with a series of product defect (and recall) announcements, it would seem likely that the company will once again lean on M&A to recharge its growth prospects and divert investor attention away from management's own poor recent record.
With that in mind, it seems appropriate to take a look at JNJ's menu of options and its potential shopping list.
Based on what the company has done in the past, it would seem improbable that the company would look too seriously at areas like life sciences (thus excluding names like Thermo Fisher (TMO), Life Technologies (LIFE), or Illumina (ILMN)). Likewise, services would be a big change in strategy, so names like Lab Corp (LH) or Davita (DVA) are likely out, as are imaging or “big iron” companies like Varian (VAR).
Generally speaking, it would also seem that JNJ should target businesses with good emerging market exposure – JNJ has good overall non-US revenue exposure, but not so much in the faster-growing emerging markets.
To read the full piece, please go to Seeking Alpha:
Johnson & Johnson: Potential M&A Targets to Recharge Growth, Divert Investor Attention
With that in mind, it seems appropriate to take a look at JNJ's menu of options and its potential shopping list.
A Few General Thoughts
There is nothing wrong with small deals or the acquisition of pre-revenue companies with promising products in the pipeline, but for purposes of this analysis I am only considering major, multi-billion-dollar deals that could meaningfully impact short-term revenue and earnings performance.Based on what the company has done in the past, it would seem improbable that the company would look too seriously at areas like life sciences (thus excluding names like Thermo Fisher (TMO), Life Technologies (LIFE), or Illumina (ILMN)). Likewise, services would be a big change in strategy, so names like Lab Corp (LH) or Davita (DVA) are likely out, as are imaging or “big iron” companies like Varian (VAR).
Generally speaking, it would also seem that JNJ should target businesses with good emerging market exposure – JNJ has good overall non-US revenue exposure, but not so much in the faster-growing emerging markets.
To read the full piece, please go to Seeking Alpha:
Johnson & Johnson: Potential M&A Targets to Recharge Growth, Divert Investor Attention
Wednesday, February 9, 2011
Investopedia: Tepid Teva Somewhat Tempting
Once again Israeli generic drug giant Teva Pharmaceutical (Nasdaq:TEVA) has proven that although generic competition may bedevil the branded drug industry, there are no free rides here either. Teva's results and outlook will likely leave the stock cooling its heels for a bit in this growth-obsessed market, but patient investors should find no particular causes for long-term concern.
A Sluggish End to the Year
Before delving into Teva's results, it is worth repeating that Wall Street is a game of relative performance; companies can report objectively good (if not great) results and nevertheless disappoint analysts and investors.
To that end, Teva's 16% revenue growth this quarter was not bad, even if it was about 5% shy of the consensus estimate. While the company's biggest drug, Copaxone for multiple sclerosis (MS), did well with 26% sales growth (more than one-fifth of the company's sales), North American generic sales declined 5%. That is a bit puzzling, particularly given the company's exclusivity on generic Effexor XR. Then again, with doctor visits down across the board in the U.S., maybe that is where the answer lies. (For more, see There's Nothing Generic About The Profits.)
Profitability was not too problematic this period. Gross margin improved by both GAAP and non-GAAP calculations, and the company's non-GAAP operating income grew about 23% for the quarter. All in all, the company missed the average analyst guess by about three cents, though a better-than-expected tax rate helped. (For more, see Zooming In On Operating Income.)
The Road Ahead
Perhaps it has been going on a bit too long now to still be ironic, but one of the major concerns surrounding Teva involves competition in its branded drug business. Novartis (NYSE: NVS) will likely take some business away from Teva with its new oral MS drug Gilenya, and Genzyme (Nasdaq:GENZ) likewise has big hopes and expectations for its entry into the market.
Continue on via the link below:
http://stocks.investopedia.
A Sluggish End to the Year
Before delving into Teva's results, it is worth repeating that Wall Street is a game of relative performance; companies can report objectively good (if not great) results and nevertheless disappoint analysts and investors.
To that end, Teva's 16% revenue growth this quarter was not bad, even if it was about 5% shy of the consensus estimate. While the company's biggest drug, Copaxone for multiple sclerosis (MS), did well with 26% sales growth (more than one-fifth of the company's sales), North American generic sales declined 5%. That is a bit puzzling, particularly given the company's exclusivity on generic Effexor XR. Then again, with doctor visits down across the board in the U.S., maybe that is where the answer lies. (For more, see There's Nothing Generic About The Profits.)
Profitability was not too problematic this period. Gross margin improved by both GAAP and non-GAAP calculations, and the company's non-GAAP operating income grew about 23% for the quarter. All in all, the company missed the average analyst guess by about three cents, though a better-than-expected tax rate helped. (For more, see Zooming In On Operating Income.)
The Road Ahead
Perhaps it has been going on a bit too long now to still be ironic, but one of the major concerns surrounding Teva involves competition in its branded drug business. Novartis (NYSE: NVS) will likely take some business away from Teva with its new oral MS drug Gilenya, and Genzyme (Nasdaq:GENZ) likewise has big hopes and expectations for its entry into the market.
Continue on via the link below:
http://stocks.investopedia.
Wednesday, January 12, 2011
What's Going On With Intellipharmaceutics?
I have not written anything so far on Intellipharmaceutics (Nasdaq: IPCI), but this is an interesting emerging generics company. With the recent action in the stock, I am wondering if I have waited a bit too long and whether something big is stirring with this name.
What makes IPCI most interesting to me is its Hypermatrix technology. This technology incorporates multiple factors into the design of oral drugs that have desirable controlled release properties. Although its not new within the generics space, controlled/extended-release drugs are very popular and its tantamount to must-have technology to compete in certain drug classes.
What makes IPCI most interesting to me is its Hypermatrix technology. This technology incorporates multiple factors into the design of oral drugs that have desirable controlled release properties. Although its not new within the generics space, controlled/extended-release drugs are very popular and its tantamount to must-have technology to compete in certain drug classes.
Right now, Intellipharamaceutics basically has three shots on goal. A generic form of Novartis's (NYSE: NVS) Focalin XR (dexmethylphenidate), used to treat ADHD, has been filed in partnership with Par (NYSE: PRX), but likely won't hit the market until late in 2012. The company has also filed an ANDA for a generic XR version of Pfizer's (NYSE: PFE) Effexor, but Pfizer has filed suit to block this. Last and not least, the company has a generic form of Pfizer/Nycomed's Protonix (for GERD) in development as well.
Beyond this, the company has several other potential generics products, as well as some potential branded/NDA drugs. What is great about generics is that the clinical pathway to approval is quite a bit simpler than with new branded drugs. Of course, there are still prodigious legal expenses involved, so it's not easy money by any means.
What has kept from getting more interested in this name has been the company's balance sheet. With basically no revenue, the company is bleeding money as it develops its pipeline. Unfortunately, the company ended its last quarter with only about $2 million in cash, and has had to rely upon its own co-founder and CEO for some loans. What that means, then, is that the company has little choice but to go to the markets to raise funds and/or try to partner off another one of these filed ANDA candidates.
The idea that a public round of funding was a "when, not if" circumstance is what has kept me away from these shares so far. Why should I buy shares today only to get diluted in a round of funding shortly thereafter? On the other hand, maybe I got too clever for my own good.
IPIC's stock has been strong the last couple of days - jumping about $1.50, or over 50%. Is the company about to announce a licensing deal with Teva (Nasdaq: TEVA), Mylan (NYSE: MYL), or Watson (NYSE: WPI)? Or perhaps a deal for the entire company outright? Let's face it, lots of generic companies could use more extended-release technology, particularly something that genuinely looks like a better mousetrap like Intellipharmaceutics' Hypermatrix.
If this spike in the shares is due to an upcoming buyout bid, I'm pretty much hosed and this will go down as a miss that I regret. If its a licensing/partnership deal, though, I would expect the company to launch a financing round in the wake of it (strike while the iron is hot, you know) and that could be a chance to get into the name. I don't think I'm going to get another shot below $3 unless/until something goes wrong, but that's the price I pay for waiting and being cheap.
In the meantime, I think Intellipharmaceutics is a name that is worth a spot on aggressive investors' watch lists. There is a definite scarcity of credible small-cap generic companies and this company has an attractive late-stage pipeline. I would be a little nervous about buying into this recent strength without a better explanation for why the stock moved, but the stock does not seem expensive provided the company can get the funding it needs.
Aggressive investors could BUY IPCI here. I, however, am going to keep waiting for news...
Tuesday, November 9, 2010
Can Investors Warm To Warner Chilcott?
Although investors have been willing to give a bit of a valuation break to some deserving large-cap European pharmaceutical companies, Ireland's Warner Chilcott (Nasdaq:WCRX) is not in that group. While the company has a host of challenges to surmount (some of which are self-inflicted), investors may nevertheless find it worthwhile to hit the books on this specialty pharmaceutical company.
The Quarter That Was
Overall, Warner Chilcott's third quarter earnings were positive, but with some spots of concern. Right off the bat, the company missed the average analyst guess by a considerable margin. WCRX reported that sales were up 178% to $703 million, about 6% below the $750 million target (to say nothing of the optimistic $823 million high estimate).
Without the enormous impact of the drugs acquired from Procter & Gamble (NYSE:PG), which amounted to about $504 million, the company would have posted a 21% revenue decline. That number also includes the impact of a significant change in the dermatology business, though, so on a true like-for-like basis, revenue would have been up more than 10% (led by the oral contraceptive business).
Please click the link for the full piece:
http://stocks.investopedia.
The Quarter That Was
Overall, Warner Chilcott's third quarter earnings were positive, but with some spots of concern. Right off the bat, the company missed the average analyst guess by a considerable margin. WCRX reported that sales were up 178% to $703 million, about 6% below the $750 million target (to say nothing of the optimistic $823 million high estimate).
Without the enormous impact of the drugs acquired from Procter & Gamble (NYSE:PG), which amounted to about $504 million, the company would have posted a 21% revenue decline. That number also includes the impact of a significant change in the dermatology business, though, so on a true like-for-like basis, revenue would have been up more than 10% (led by the oral contraceptive business).
Please click the link for the full piece:
http://stocks.investopedia.
Saturday, October 2, 2010
Does Watson Get Bought On Monday?
I wonder if we are going to see an announcement on Monday that Watson Pharmaceuticals (NYSE: WPI) has agreed to sell itself.
Watson traded pretty flat for Friday until a little after 3:00pm, when it shot up about a point. Granted, a one-point move on a $40+ stock is no big deal, but the timing makes me wonder. It is not that unusual to see a stock telegraph this kind of new on the preceding Friday, and WPI is widely considered to be one of the relatively few prime acquisition targets left in the generics space.
Although Watson chose not to pursue the growth-by-acquisition strategy like Teva (Nasdaq: TEVA) and Mylan (NYSE: MYL) and has focused on producing solid free cash flow and ROIC, investors do not always appreciate that sort of discipline. More than that, generics is a volume business where scale matters (when Wal-Mart (NYSE: WMT) starts a dive for the bottom with $4 prescriptions, that can happen...) and Watson is now behind in that regard.
On one hand, Watson has a solid oral contraceptives business and that's good. On the other hand, Watson has a solid U.S. business (#3) but not much overseas and that is not so good. Add in the all-too-common relatively cheap valuations in healthcare, and you have a company that is a good takeout candidate.
Watson traded pretty flat for Friday until a little after 3:00pm, when it shot up about a point. Granted, a one-point move on a $40+ stock is no big deal, but the timing makes me wonder. It is not that unusual to see a stock telegraph this kind of new on the preceding Friday, and WPI is widely considered to be one of the relatively few prime acquisition targets left in the generics space.
Although Watson chose not to pursue the growth-by-acquisition strategy like Teva (Nasdaq: TEVA) and Mylan (NYSE: MYL) and has focused on producing solid free cash flow and ROIC, investors do not always appreciate that sort of discipline. More than that, generics is a volume business where scale matters (when Wal-Mart (NYSE: WMT) starts a dive for the bottom with $4 prescriptions, that can happen...) and Watson is now behind in that regard.
On one hand, Watson has a solid oral contraceptives business and that's good. On the other hand, Watson has a solid U.S. business (#3) but not much overseas and that is not so good. Add in the all-too-common relatively cheap valuations in healthcare, and you have a company that is a good takeout candidate.
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