Tags: biogen | amgen | nektar | pharmaceutical

Expert: Time Appears Ripe for Pharmaceutical Stocks

By    |   Tuesday, 24 July 2012 06:09 PM

“Important” drugmakers, such as Biogen Idec Inc., Amgen Inc. and Nektar Therapeutics, appear to be having a strong summer, as evidenced by the second-quarter earnings that have been released so far and expectations of soon-to-be-released results, as well as new clinical trials for certain drugs, Dennis Askew wrote for the SmallCap Network.

Askew noted that these stocks are not inexpensive but that they should be cornerstones of portfolios.

Biogen Idec Inc. reported that its second-quarter revenue increased 18 percent to $1.42 billion from $1.21 billion in the second quarter of last year. Sales of its multiple sclerosis (MS) and Crohn’s disease drug, Tysabri (natalizumab), fell to $280.4 million in the most-recent quarter from $281.4 million last year. Biogen Idec co-markets the drug with Elan Corp. Plc. However, the decrease in Tysabri sales was more than offset by an increase in sales of the MS drug Avonex (interferon beta-1a), which increased to $762.1 million from $659.2 million.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

Net income for the second quarter of 2012 totaled $386.8 million, up from $288.0 million in the second quarter of last year. Diluted net earnings per share increase 36 percent to $1.61 in the most-recent quarter.

Second-quarter non-GAAP diluted earnings were $439.1 million, or $1.82 per share, compared with $332.2 million, or $1.36 per share, last year.

The firm also increased its full-year guidance for non-GAAP diluted earnings per share to more than $6.20 from the more than $6.15 expected when the company announced its first-quarter earnings. However, the guidance for GAAP diluted earnings per share was lowered to above $5.44 from above $5.54. The firm still expects revenue growth to be in the mid-single digits relative to 2011.

“At the midpoint of a pivotal year, we continue to succeed in the marketplace and track against our goals,” said George Scangos, Biogen Idec’s chief executive officer.

“There has been strong uptake of the Avonex Pen and Avostartgrip titration-dosing kit in both the United States and European Union,” he continued. “We have a busy nine months ahead of us preparing for the BG-12 launch and four pivotal trial data readouts -- for our long-lasting blood factors VIII and IX for hemophilia, dexpramipexole for ALS and PEGylated interferon beta-1a for multiple sclerosis.”

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

Askew likes Amgen, which will announce its results July 26, because the company launched an awareness campaign for patients with cancer and their caregivers, called Chemotherapy: Myths or Facts, in late June. The campaign features Emmy-nominated actress and breast cancer survivor Maura Tierney, who noted that the campaign “encourages patients and caregivers to ask a lot of questions, arming themselves with as much information as possible to take charge of their journey.”

Regarding Nektar Therapeutics, Askew noted that the firm began enrollment in a Phase II withdrawal study of NKTR-181, an investigational novel mu-opioid analgesic designed to reduce central nervous system-mediated side effects and to reduce the risk of abuse. The trial will assess the efficacy, safety and tolerability of the drug in patients with moderate to severe chronic pain from osteoarthritis of the knee.

"As a new mu-opioid analgesic molecule, NKTR-181 has the potential to transform the treatment of chronic pain by using a molecular approach to reduce the risk of traditional opioid therapy while preserving its analgesic benefit," said Dr. Robert Medve, the company's senior vice president and chief medical officer. "We are excited to be advancing this molecule into Phase 2 testing in chronic pain patients."

Askew noted that profit taking based on Moody’s Investors Service’s downgrade of Germany might be an opening to buy expensive stocks, and these pharmaceutical stocks “are as fundamental to many portfolios as energy ‘plays’ with dividends and Treasurys.”

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Tuesday, 24 July 2012 06:09 PM
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