iShares US Pharmaceuticals

In 2018, the global pharmaceutical industry stood at $1.2 trillion, and experts expect $1.5 trillion by 2023. Here’s everything investors need to know.

Merck & Co.’s (MRK) Keytruda generated revenues of $1.9 billion in the third quarter, reflecting an ~80% YoY growth.

Pfizer’s dividend yield is 3.15%. The company’s historical dividend yield was 3.53% in 2017, while the five-year average yield is 3.44%.

Nineteen analysts currently track Pfizer stock. The consensus rating for Pfizer stands at 2.63, which represents a “hold.”

Pfizer has divided its product portfolio into two segments: Innovative Health and Essential Health. It reports revenue for both these segments.

On September 21, 23 analysts tracked Allergan (AGN) stock. Four analysts recommended a “strong buy,” and 12 analysts recommended a “buy.”

In this article, we’ll compare the EPS growth rates of Eli Lilly (LLY), Pfizer (PFE), Merck & Co. (MRK), Allergan (AGN), and GlaxoSmithKline (GSK).

Eli Lilly and Company reports its business revenue under two segments: the Human Pharmaceutical segment and Elanco, the Animal Health segment.

In this series, we’ll discuss Allergan’s valuation, segment and product performances, recent developments, and analyst recommendations.

Cialis reported revenues of $538.7 million in Q2 2018, a YoY 14.0% decrease compared to revenues of $627.3 million in Q1 2017.

Pfizer (PFE) announced in a press release today that the European Commission has approved Trazimera for HER2 overexpressing breast cancer and HER2 overexpressing gastric or gastroesophageal junction adenocarcinoma.

Analysts expect Allergan’s second-quarter revenue to fall ~2.5% to $3.9 million compared to its revenue of $4.0 million in the second quarter of 2017.

Pfizer (PFE) released its 1Q18 earnings today, reporting another strong quarter for the Innovative health business.

In 2018, stock markets, especially in the pharmaceutical sector, have seen heightened volatility.

Merck’s Relebactam is an investigational drug for the treatment of certain forms of imipenem-non-susceptible bacterial infections.

Merck & Co. stock has fallen ~6.4% in 1Q18, while it’s fallen ~5.2% YTD (year-to-date) as of April 6, 2018.

Merck (MRK) reported 3% growth in revenues to $10.4 billion during 4Q17 as compared to revenues of $10.1 billion in 4Q16.

Pfizer (PFE) reported revenue of $13.7 billion in 4Q17, a 1% rise compared to $13.6 billion in 4Q16.

Analysts are estimating EPS of $8.01 on revenues of ~$80.9 billion for Johnson & Johnson in 2018.

Analysts expect Eli Lilly to report EPS of $1.07 on revenues of ~$5.9 billion during 4Q17.

On January 3, 2018, the FDA approved the inclusion of real-world data in Invega Sustenna’s product label, based on the PRIDE study.

Wall Street analysts expect Pfizer’s (PFE) top line to increase ~0.7% to ~$13.72 billion in 4Q17. The EPS is expected to increase to $0.56 for 4Q17.

For 3Q17, Merck surpassed Wall Street analysts’ estimates for EPS but missed the revenue estimate. It reported EPS of $1.11 on revenues of $10.3 billion.

Mylan’s (MYL) Rest of the World segment includes revenues from third-party sales of generics products and specialty segment products reported from countries including New Zealand, India, Japan, and Australia as well as emerging markets including Asia, Brazil, Africa, and the Middle East.

In 3Q17, Jazz Pharmaceuticals’ (JAZZ) Xyrem generated revenue of $303.9 million, which reflected a rise of ~6% on a YoY (year-over-year) basis.

Eli Lilly (LLY) surpassed analysts’ estimates for EPS and revenues and reported EPS of $1.05 on revenues of $5.7 billion in 3Q17.

Gilead’s Harvoni Harvoni is one of Gilead Sciences’ (GILD) largest-selling drugs. A combination of Ledipasvir and Sofosbuvir, it is approved for the treatment of hepatitis C infections. Harvoni’s importance The above chart shows Harvoni revenue over the last few quarters. During 3Q17, Harvoni contributed ~15% of Gilead’s revenue, and in 2Q17, it contributed ~21%. Harvoni […]

This segment’s revenues rose 18.7% YoY (year-over-year) to $1.72 billion in 3Q17, compared with $1.45 billion in 3Q16.

Synergy only started earning revenues after the launch of Trulance in March 2017. Prior to that, Synergy hadn’t earned any revenues.

Keytruda (pembrolizumab) is a prescription medicine from Merck’s (MRK) immuno-oncology franchise used for the treatment of various tumors.

In 2Q17, Jazz Pharmaceuticals’ (JAZZ) Xyrem generated revenues of ~$298 million, which represents ~6% growth YoY and ~10% growth QoQ.

Eli Lilly (LLY) surpassed Wall Street estimates in 2Q17, reporting earnings per share of $1.11 on revenues of ~$5.8 billion. Analysts estimated that the company would report EPS of $1.05 on revenues of $5.6 billion.

In 1H17, Sulperazon reported revenues of ~$232 million for 15% growth on a YoY basis.

Segment-wise performance Johnson & Johnson (JNJ) reported 2.9% growth in operating revenue between 2Q16 and 2Q17. However, the company missed analysts’ 2Q17 estimate and reported revenue of $18.8 billion due to a 1% foreign exchange impact. Analysts had forecast revenue of $19 billion. Johnson & Johnson’s business is broken down into the pharmaceuticals segment, consumer […]

In 2Q17, Merck’s (MRK) Zepatier generated revenues of ~$517 million compared to $112 million in 2Q16.

A 9-mg dose of JAZZ’s Xyrem, which contains 1,640 mg of sodium, has caused physicians to be reluctant to prescribe the drug to ~20% of their patients.

Pfizer (PFE) reported a 2% decline in its top line for its 2Q17 earnings, which were released on August 1.

Pfizer (PFE) is set to release its 2Q17 earnings on August 1, 2017. Analysts estimate earnings per share of $0.66 on revenues of ~$13.1 billion for 2Q17.

Bristol-Myers Squibb’s top line rose nearly 6% to ~$5.1 billion in 2Q17 due to operational growth of 7% in its revenue.

Eli Lilly and Company (LLY) released its 2Q17 earnings on July 25, 2017, reporting an 8.0% rise in its top line to $5.8 billion for 2Q17 compared to 2Q16.

Headquartered in New York City, Bristol-Myers Squibb (BMY) is a leading American pharmaceutical company.

In 2016, Pfizer’s (PFE) Chantix reported revenues of ~$842 million, which represents a ~25% YoY (year-over-year) rise.

For 2Q17, analysts estimate that Eli Lilly will post EPS of $1.05 and revenues of $5.6 billion.

Pharmaceutical segment Johnson & Johnson’s (JNJ) pharmaceutical segment comprises its immunology, infectious disease, neuroscience, oncology, cardiovascular and metabolic, and pulmonary hypertension franchises. Immunology franchise The major blockbuster drugs under the immunology franchise are Remicade, Stelara, and Simponi/Simponi Aria. The immunology franchise reported revenue of $3 billion in 2Q17, including an operational decrease of ~1.9% and a […]

In 2016, Merck’s (MRK) Animal Health segment reported revenues of ~$3.5 billion, which reflected ~4% growth year-over-year.

Johnson & Johnson’s (JNJ) Consumer Healthcare segment includes the baby care, oral care, skincare, over-the-counter products, women’s health, and wound care franchises.

For 2Q17, Wall Street analysts estimate AGN’s EPS (earnings per share) to come in at $3.93, which would be a 17.5% growth over 2Q16.

Zoetis (ZTS) stock has risen ~17.3% in 2Q17, while it has risen ~15.4% year-to-date as of July 7, 2017.

Merck & Co.’s (MRK) Anacetrapib is an investigational drug developed for the treatment of hypercholesterolemia. The drug also reduces the risk of cardiovascular disease.

Pfizer (PFE) has started a Phase 1 clinical trial to evaluate an investigational vaccine for protection against Group B streptococcus in infants younger than three months.

Eli Lilly (LLY) announced that the US Food and Drug Administration (or FDA) approved the Humalog Junior KwikPen for finer dose adjustments in the treatment of patients with diabetes on June 13, 2017.

Pfizer (PFE), a pharmaceutical giant headquartered in New York City, reported EPS (earnings per share) of $0.69 on revenues of ~$12.8 billion for 1Q17.

Pfizer (PFE) reported a 2% fall in its top line for 1Q17 as part of its latest earnings announcement on May 2, 2017.

Oncology contributes around 18.0% to Eli Lilly’s (LLY) total revenues. Key drugs in this segment include Alimta, Erbitux, and Cyramza.

The idea behind Obamacare was that it would embody legislation not only providing but mandating healthcare coverage for nearly everyone in the US.

The US healthcare system is unique in the developed world as it lacks a uniform system and, according to Emanuel, had been largely inefficient before Obamacare.

The US pharmaceutical sector is made up of different areas geared toward the development, production, and marketing of drugs. Let’s take a look at some of the sector’s 1Q17 mergers and acquisitions.

Johnson & Johnson’s Medical Devices segment contributed nearly 35% to the company’s total revenues.

Bristol-Myers Squibb’s (BMY) cardiovascular segment consists of its key drug, Eliquis. The segment contributed nearly 18.0% to the company’s total revenues in 4Q16.

Johnson & Johnson’s (JNJ) pharmaceuticals segment consists of its immunology, infectious disease, neuroscience, oncology, and cardiovascular and metabolics franchises.

Mylan’s recent commercial developments include the acquisition of the Cold-EEZE brand from ProPhase Labs and the acquisition of Meda AB.

Mylan has been embroiled in a controversy over whether its EpiPen is classified as a generic or a branded product and whether its 500.0% price hike is justified.

Pfizer plans to use avelumab, a PD-L1 (programmed death-ligand 1) class immuno-oncology product, as a backbone therapy in its immuno-oncology programs.

On October 6, 2016, the California, US-based ICU Medical entered into a definitive agreement to acquire Hospira’s Global Infusion System business.

Bristol-Myers Squibb’s (BMY) cardiovascular segment consists of key drug Eliquis. This segment contributed nearly 18% of total revenues for 3Q16.

On October 6, 2016, Pfizer (PFE) announced one deal to “off-load” all of the global infusion therapy business known as “Hospira Infusion Systems.”

Analyst recommendations for BMY Bristol-Myers Squibb (BMY) is a leading immuno-oncology company. According to a Bloomberg consensus of 26 brokerage firms recorded on October 5, 2016, 42.3% of analysts recommended Bristol as a “buy” and 50% of analysts issued a “hold” rating for the company. Around 7.7% of analysts rated the stock as a “sell.” The […]

While Clinton aims to retain and bolster the Affordable Care Act, Trump wants to replace it with a new act that encourages free-market competition.

Products with declining revenues So far, we’ve discussed growth trends and positive growth products for Pfizer (PFE). Let’s now discuss the products that hampered growth. The overall share of revenues for the Essential Health business increased to 46% of total revenues in 2Q16 from 44% of total revenues in 2Q15, driven by revenue growth from […]

Pfizer-Anacor deal On June 23, 2016, Pfizer (PFE) completed the acquisition of Anacor Pharmaceuticals (ANAC). The stock transaction is valued at $99.25 per Anacor share, resulting in a total enterprise value of ~$5.2 billion. What is Anacor? Anacor is a California-based biopharmaceutical company. It is focused on developing and commercializing boron-based drugs for the treatment […]

Pfizer-Medivation deal On September 27, 2016, Pfizer (PFE) completed the acquisition of Medivation (MDVN). The stock transaction is valued at $81.50 per Medivation share, resulting in a total enterprise value of ~$14 billion. What is Medivation? Medivation is a California-based biopharmaceutical company. It is focused on developing and commercializing innovative therapies for the treatment of […]

On August 24, Pfizer (PFE) announced its acquisition of AstraZeneca’s (AZN) small-molecule anti-infective portfolio, which is primarily outside the United States.

The acquisition of Pall has allowed Danaher to strengthen its presence in the life sciences market.

With the acquisition of Baxter’s marketed vaccines, Pfizer (PFE) gained access to NeisVac-C and FSME-IMMUN/TicoVac.

Johnson & Johnson is classified into three business segments—Pharmaceuticals segment, Consumer segment, and Medical Devices segment.

Bristol-Myers Squibb’s (BMY) cardiovascular segment consists of its key drug Eliquis. This segment contributed nearly 78% of total revenues for 2Q16.

Pfizer acquired Bamboo Therapeutics, a biotechnology company focused on developing gene therapy for treating rare diseases.

On June 23, 2016, Pfizer (PFE) completed the acquisition of Anacor Pharmaceuticals (ANAC).

Vyxeos would offer commercial synergies to the Jazz Pharmaceuticals portfolio in the form of a complementary targeted prescriber base of AML patients who undergo HSCT.

On June 29, 2016, Horizon Pharma was trading at a forward EV-to-EBITDA multiple of 4.67x, which is at a discount when compared with peers.

Pfizer (PFE) announced the acquisition of Anacor Pharmaceuticals (ANAC) on May 16, 2016. The deal closed on June 23, 2016.

In the Pfizer-Anacor merger, which was completed on June 23, 2016, the stock transaction is valued at $99.25 per Anacor share.

Pfizer (PFE) completed the acquisition of Anacor Pharmaceuticals (ANAC) on June 23, 2016. The acquisition will strengthen Pfizer’s portfolio of inflammatory disease products.

The European Medicines Agency’s CHMP (Committee for Medicinal Products for Human Use) recommended the suspension of Alkem’s Riluzole Alkem on June 24, 2016.

The European Medicines Agency’s CHMP gave a negative recommendation to Novartis’s Arzerra for use as a maintenance treatment for CLL on June 23, 2016.

Bristol-Myers Squibb’s (BMY) Cardiovascular segment includes the key drug Eliquis. The segment contributed nearly 16.7% of total revenues for 1Q16.

The total contribution from Mallinckrodt’s Specialty Generics segment in fiscal 2Q16 stood at $264.4 million, which represents a 27% YoY decline.

Pfizer (PFE) reported an increase of ~19.7% in revenue during 1Q16. Revenue came in at $13.0 billion for 1Q16 as compared to $10.9 billion for 1Q15.

The overall share of revenue for Pfizer’s Established Products segment decreased to 44.6% in 1Q16 from 48.8% for 1Q15.

The US labor market has shown tremendous resilience amid concerns over various issues, like aging demographics.

Novartis (NVS) released its 1Q16 earnings on April 21, 2016. It reported top-line growth of 1% at constant exchange rates for 1Q16—compared to 1Q15.

The overall business of Johnson & Johnson (JNJ) is classified into three business segments: pharmaceuticals, consumer, and medical devices.

As Jazz Pharmaceuticals’ (JAZZ) second-largest drug, Erwinaze earned $203 million, or ~15% of total net sales, in fiscal 2015.

Some of the challenges the pharmaceutical industry faces include R&D failures, changes in regulatory procedures, litigation, patent expiries, and foreign currency movements.

The Checkmate-205 study is the phase II study that compares safety and efficacy of Opdivo in the treatment of patients with relapsed or refractory classical Hodgkin lymphoma

Opdivo is a part of Bristol-Myers Squibb’s (BMY) alliance with Ono Pharmaceutical, and it reported revenues of $942 million in 2015.

After the Vidara merger in September 2014, Horizon Pharma gained access to Actimmune, which has been approved by the FDA for CGD and SMO.

On February 10, 2016, Mylan (MYL) announced its decision to acquire Meda AB for a consideration of $9.9 billion through a public offer.

JNJ has surpassed all estimates for EPS in the past, and analysts estimate that JNJ will generate an EPS of $1.65 on revenues of ~$17.5 billion in 1Q16.

According to estimates by Evaluate Pharma, a whopping $120 billion in sales was lost to patent expirations between 2009 and 2014.