Santen - An Overlooked Play On An Overlooked Space

Ophthalmology doesn't really get much attention from most drug companies, and I suppose I can't blame them - the entire global market is estimated to be worth around $25 billion in 2017 while Celgene's (NASDAQ:CELG) cancer drug Revlimid annualizes close to $8 billion in sales alone. In other words, relative to the opportunities in disease categories like cancer and auto-immune, it's not necessarily a huge moneymaker. Nevertheless, just because the space doesn't have broad appeal doesn't mean that there aren't money-making opportunities, and I think you could argue that the avoidance of the area works in the favor of companies like Japan's Santen Pharmaceutical Co. Ltd. (OTCPK:SNPHY).

While Santen's U.S. ADRs have decent liquidity, I don't think many investors pay much attention to this company, even though it is one of only three companies in the world with a full range of ophthalmic drugs. With the company holding strong share in Japan and China, building its business in the EU, and about to enter the U.S., I believe Santen could be looking at some meaningful growth opportunities in the coming years that aren't fully reflected in the share price.

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Santen - An Overlooked Play On An Overlooked Space

The Motley Fool: Allergan Stock Earnings: Good Enough to Fight off Valeant?

It's no longer enough to evaluate Allergan's (NYSE: AGN  ) earnings on a stand-alone basis; almost everything that happens with or to Allergan these days is going to be viewed through the lens of how it impacts Valeant's (NYSE: VRX  ) hostile bid for the company and Allergan's efforts to resist that bid. Although Allergan's recent R&D update was not uniformly positive, today's earnings and guidance do serve to raise the stakes a bit, and Valeant's recent complaints to regulators tell me that Allergan has scored a few hits with its own PR program.

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Allergan Stock Earnings: Good Enough to Fight off Valeant?

The Motley Fool: AbbVie Inc. Wins the Shire

Pfizer couldn't bag AstraZeneca and Valeant is still trying win over Allergan's (NYSE: AGN  ) shareholders, but AbbVie (NYSE: ABBV  ) has managed to close its major deal. AbbVie and Shire (SHPG) announced on Friday that the companies had agreed to a merger that will see AbbVie acquire the Irish-based drugmaker on the previously announced terms of GBP 24.44 cash and 0.896 shares of AbbVie for each Shire share.

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AbbVie Inc. Wins the Shire

The Motley Fool: Fleeing Taxes, Salix Pharmaceuticals Moves to Ireland

Large companies like Actavis have done it, small companies like Auxilium have done it, and huge companies like Medtronic have done it (and Pfizer wants to do it). Now count mid-cap specialty pharmaceutical company Salix Pharmaceuticals (NASDAQ: SLXP  )  is among the companies using M&A to shift their formal headquarters to a country with a lower tax rate. 

While there's more to Salix's merger with Cosmo Tech than just a tax inversion, that's the value driver to the transaction. This move appears to add about 5% to 10% to Salix's value, but it also makes it less likely that the company gets a buyout bid of its own, and that may be disappointing to some investors.

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Fleeing Taxes, Salix Pharmaceuticals Moves to Ireland

The Motley Fool: Up 8%: Does Cooper Companies Inc's Buyout Make Sense?

Eye care specialist Cooper Companies (NYSE: COO  ) is getting into the med-tech merger game and not just as a "me too" player. The company's acquisition of Sauflon Pharmaceuticals carries a steep price at nearly six times forward revenue, but the company is filling out its silicone hydrogel product line and advancing its position in this market by years. Although I continue to believe that Cooper would be well-served to either grow its ob/gyn and fertility businesses or divest them, it's hard to argue with a company generating double-digit growth and double-digit returns on capital.

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Up 8%: Does Cooper Companies Inc's Buyout Make Sense?

The Motley Fool: Auxilium Pharmaceuticals Inc Joins the Buyout Bonanza

Amidst high-profile deals like Pfizer's pursuit of AstraZeneca, Actavis's acquisition of Forest Labs, and Valeant's (NYSE: VRX  ) pursuit of Allergan, it might be easy to forget that it is not just large companies that can benefit from tax inversion deals that lead to a company reestablishing its headquarters in a lower-tax jurisdiction. Auxilium (NASDAQ: AUXL  ) , a small specialty pharmaceutical company, has thrown its hat into the tax inversion ring with an announced acquisition of Canada's QLT (NASDAQ: QLTI  ) . Investors did not universally cheer the news, though, and it's unclear just how much benefit Auxilium will really see from this move.

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Auxilium Pharmaceuticals Inc Joins the Buyout Bonanza

The Motley Fool: Healthcare Buyout Mania: Now What?

It feels like there's nothing to talk about in the pharmaceutical space these days other than the latest M&A bid. Just in the last day and a half, investors have seen news on five completed or proposed transactions. And I doubt the deal-making is done.

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Healthcare Buyout Mania: Now What?

The Motley Fool: Valeant Pharmaceuticals's Earnings Take a Back Seat To Allergan News

Canadian health care magpie Valeant (NYSE: VRX  ) certainly knows how to stay in the spotlight. Investors simply aren't all that interested in quarterly earnings at a time when the company is actively trying to ratchet up the pressure on Allergan  (NYSE: AGN  ) to accept the company's acquisition offer. Valeant continues to look undervalued as it is likely still in the early to-middle years of a debt-fueled grab for scale. However, as the pushback from Allergan shows, not all of the targets Valeant may choose will welcome the company's efforts at empire-building.

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Valeant Pharmaceuticals's Earnings Take a Back Seat To Allergan News

The Motley Fool: Can Allergan Remain Independent of Valeant?

Thanks to the now-public interest of Valeant (NYSE: VRX  ) in making Allergan (NYSE: AGN  ) its own, not to mention the vocal and financial support of Pershing Square and Bill Ackman, the status quo is gone for good at Allergan. Good first quarter results and improved guidance for the year were both nice to see, but Allergan is going to have to do a lot more to convince its shareholders that a plan for the future that excludes selling out to Valeant has their best interests at heart.

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Can Allergan Remain Independent of Valeant?

The Motley Fool: Can Allergan Find an Alternative To Valeant?

No one will accuse Valeant (NYSE: VRX  ) CEO Mike Pearson of lacking boldness. He has laid out a strategy for turning Valeant into one of the largest pharmaceutical/med-tech companies in the world and has proven more than willing to turn to bold M&A moves to make it happen. Valeant's latest move is far and away the largest – a $47 billion bid (at the time of the offer) for Allergan (NYSE: AGN  ) – but the target's acceptance is hardly a sure thing and the company's views about the pharma industry may give investors reason for pause regarding the long-term strategy.

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Can Allergan Find an Alternative To Valeant?

The Motley Fool: Is There Opportunity in the Eye-Care Sector?

Imperfect vision is a common problem around the world. It's the basis for large businesses at Essilor (NASDAQOTH: ESLOY  ) , Hoya, and Luxottica (NYSE: LUX  ) , as well as contact-lens manufacturers like Johnson & Johnson (NYSE: JNJ  ) , Novartis, Cooper (NYSE: COO  ) , and Valeant (NYSE: VRX  ) . Not only is providing vision care products a profitable business in its own right, which often supports double-digit returns on capital, it is a business where customers typically have to buy the product over and over again throughout their life. Add in above-average growth prospects from emerging markets and it is not too difficult to see why these businesses generally carry robust valuations.

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Is There Opportunity in the Eye-Care Sector?

The Motley Fool: Will Shire PLC Build Or Buy Its Future?

The ideal in the biotech and pharma world may be for a company to develop a strong internal R&D engine that regularly churns out potential blockbuster compounds, but the reality is that most companies have to turn to partnerships and acquisitions to manage risk and maintain growth. Shire (NASDAQ: SHPG  ) built itself into a significant biotech/pharma company on the basis of strong internal CNS and rare disease R&D efforts, but has more recently turned to M&A to improve its prospects. With Shire likely to generate considerable cash flow in the coming years, the question stands as to whether investors would be better-served with additional M&A transactions or a reinvestment into its own internal R&D capabilities.

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Will Shire PLC Build Or Buy Its Future?

Seeking Alpha: Hoya's Prospects Brightened By Life Care

As the computer and display-weighted technology businesses stabilize and the life care/health care businesses grow, Hoya's (OTCPK:HOCPY) prospects have improved. Sell-side analysts still seem to have relatively restrained revenue growth expectations, despite double-digit growth in life care today, significant untapped potential in emerging markets, and both a balance sheet and cash flow profile that could support acquisitions to drive further growth.

Valuation is a little more complicated. With the shares up almost 70% over the past year (the Tokyo-listed shares, that is), the valuation is not quite so compelling but I wouldn't say the shares are overvalued. Consistently solid returns on capital would argue for an attractive discount rate, and the sell-side may well be underestimating the company's ability to grow both sales and profits.

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Hoya's Prospects Brightened By Life Care

The Motley Fool: Can Allergan's Growth Continue?

In the world of Big Pharma, growth is a precious commodity these days. Allergan (NYSE: AGN  ) is a noteworthy exception, though, as the company continues to see strong demand for cornerstone products like Botox an Restasis, as well as its facial aesthetics line. Allergan's pipeline is somewhat more limited than an investor might normally prefer, but the company has been active in pursuing follow-on indications for existing drugs and has had a higher than normal "hit" rate for its pipeline. Though there are frustratingly few true bargains in the pharma space today, Allergan continues to look at least as though it will remain a solid holding.

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Can Allergan's Growth Continue?

The Motley Fool: Actavis PLC Buys Pricey Lumber with Forest Labs

Investors were greeted with an intriguing rumor early Tuesday morning, as the Wall Street Journal and other financial news sources were reporting that Actavis (NYSE: ACT  ) and Forest Labs (NYSE: FRX  ) were closing in on a deal. It didn't take long for this to play out, as Actavis announced the deal before the market opened.

This is a bold move for Actavis, as Forest Labs substantially expands its therapeutic end-markets, its addressable health care markets, and its balance sheet. There are definitely rich opportunities for operational and financial synergy here, but successful execution on this premium deal is an absolute must.

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Actavis PLC Buys Pricey Lumber with Forest Labs

Seeking Alpha: Ipsen In Good Shape

Most American investors are familiar with large European drug companies like Sanofi and Novartis (NVS), but the mid-cap drugmakers like Ipsen (OTCPK:IPSEY) don't get as much attention. That's unfortunate, as Ipsen is one of several high-quality smaller European pharmaceutical companies.

Ipsen shares don't look significantly underpriced today, but there could some developments that could drive shares higher. Phase III data on tasquinimod could make this drug a viable alternative in the crowded prostate cancer space, and Ipsen may be on the prowl for licensing or acquisition opportunities to take advantage of a new U.S. oncology sales infrastructure. I'd more interested in these shares closer to EUR 30, but they look like a decent enough hold at today's level.

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Ipsen In Good Shape

The Motley Fool: Wall Street Has Taken A Sharp Turn Into Forest Laboratories, Inc.

Institutional investors and sell-side analysts are rather infamous for gnat-like attention spans and the capacity to dramatically change their opinions in relatively short periods of time. So, too, has it been with Forest Labs (NYSE: FRX  ) , though it certainly requires mentioning that Forest Labs has done a lot of work on its own to affect that change of opinion. Forest Labs announced a significant cost-cutting program and then followed it up with the nearly $3 billion purchase of Aptalis, both of which significantly impact the company's long term revenue and margin prospects.

I'm not totally sold on the company's "Project Rejuvenate", nor do I believe that all of the company's "Next Nine" products will live up to management's hopes. With that, I'm a little concerned that investor enthusiasm for the restructuring program at Forest Labs is getting caught up with excitement over similar programs at AstraZeneca, Valeant (NYSE: VRX  ) , Endo, and Amgen -- and perhaps overdoing things.

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Wall Street Has Taken A Sharp Turn Into Forest Laboratories, Inc.

Seeking Alpha: Valeant Adds Solta Medical To Its Dermatology Franchise

While it's better to be right, experienced investors know better than to throw away a lucky break. My Alpha-Rich call to buy Solta Medical (SLTM) around $2.30 is not going to go down as one of my favorite picks. While I discussed at some length the risks that ongoing execution issues would keep Solta from reaching its potential, I thought management was close to turning the corner. As it turns out, management found still more corners and this was an exceedingly "meh" pick (down about 8%).

Then along came Valeant (VRX) to save the day.

Valeant and Solta Medical announced on Monday that they had reached an agreement whereby Valeant will acquire the company for $2.92 a share in cash, or a total deal value of $250 million. With this deal, Valeant adds dermatology and aesthetics assets that I believe are better than they appear, while Solta's board gives shareholders an exit strategy with some modicum of grace. Assuming investors who bought around $2.30 sell out at the stated price, they'll get an absolute return of almost 27% and an annualized return of close to 59% - not so bad for a story that was not really developing as I'd hoped.

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Valeant Adds Solta Medical To Its Dermatology Franchise.

The Motley Fool: Cooper Leveraging Share Gains For Eye Opening Growth

Cooper (NYSE: COO  ) , or more formally "The Cooper Companies" is a sort of odd duck in the med-tech world. It's fairly well-respected by eye care rivals like Johnson & Johnson (NYSE: JNJ  ) and Novartis (NYSE: NVS  ) ; it has done well in the market (up more than 280% over five years and about 55% over the past 12 months); and it's well-followed and well-owned on the Street.
Even so, it doesn't generate much pizzazz with individual investors, and there's not much coverage of it out there. Some of that may be due to valuation -- as Cooper rarely trades at a multiple I'd call cheap -- but this is a story likely to feature strong market share gains and meaningful margin/free cash flow leverage, and those tend to be the stocks that outperform.

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http://www.fool.com/investing/general/2013/09/06/cooper-leveraging-share-gains-for-eye-opening-grow.aspx

Seeking Alpha: Can Tiny Synergetics See A Big Surge?

Having made some solid capital gains from various ophthalmology and niche med-tech companies in the past, I looked into Synergetics (SURG) hoping to find an interesting growth opportunity that the Street has simply not caught on to yet. While I did find a decent company with some growth and capital appreciation potential, the magnitude of that potential was maybe not quite what I was hoping to find. Though I intend to monitor this company in the future to see whether they can capitalize on any disruptions at Valeant's (VRX) Bausch + Lomb business, I'm not sure I see quite enough opportunity today to merit a strong recommendation.

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Can Tiny Synergetics See A Big Surge?