SPDR® S&P Pharmaceuticals ETF

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.

In 2019, JNJ stock’s 12% return has lagged the S&P’s 27% return by a wide margin. JNJ has lagged the SPDR S&P Pharmaceuticals ETF (XPH) by 2%.

The acquisition of Celgene (CELG) by Bristol-Myers Squibb (BMY) brings together both the company’s leading franchises.

Eli Lilly and Company (LLY) stock has fallen a marginal ~0.1% so far in September, and its closing price was $105.59 on September 24.

On September 14, Allergan (AGN) announced the acquisition of Bonti Inc., a clinical-stage biotechnology company.

The SPDR S&P Pharmaceuticals ETF holds ~5.0% of its total investments in Eli Lilly and Company (LLY).

Pfizer (PFE) and Merck announced in a press release today positive top-line results for their JAVELIN Renal 101 study, which evaluated a combination of Bavencio (avelumab) and Inlyta (axitinib).

On August 1, Pfizer announced that the European Commission approved Xeljanz for the treatment of ulcerative colitis.

Elanco reported revenues of $792.1 million in Q2 2018, representing 1.0% YoY growth from $784.8 million in Q2 2017.

Allergan (AGN) surpassed Wall Street analysts’ estimates for earnings per share (or EPS) and revenues, reporting non-GAAP EPS of $4.42 on revenues of $4.1 billion.

Leading US pharmaceutical company Eli Lilly (LLY) specializes in human pharmaceuticals and animal health.

Pfizer (PFE) announced in a press release yesterday that the European Commission has approved its marketing authorization application for Xeljanz in combination with methotrexate for active psoriatic arthritis.

Pfizer (PFE) reports revenue in two business segments: Innovative Health and Essential Health.

Allergan’s (AGN) US Specialized Therapeutics segment includes revenue from the US sales of specialized products.

The 54th Annual Meeting of the American Society of Clinical Oncology (or ASCO) was held in Chicago from June 1 to June 5.

Allergan’s US Specialized Therapeutics business revenues rose 6.5% to $1.6 billion during 1Q18, compared to $1.5 billion during 1Q17.

Allergan’s earnings per share are estimated to be $3.36 for 1Q18, compared to earnings per share of $3.35 for 1Q17.

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

Wall Street analysts estimate Bristol-Myers Squibb’s top line to rise 6.5% to ~$5.2 billion in 1Q18.

Eli Lilly and Co. reported revenues of ~$5.7 billion for 1Q18 today, reflecting 9% growth from 1Q17.

Eli Lilly and Company’s (LLY) Human Pharmaceuticals segment includes the endocrine products Humalog, Humulin, and Forteo.

Merck reported 3% growth in revenues to ~$10.4 billion during 4Q17 as compared to 4Q16.

Bristol-Myers Squibb’s (BMY) revenue grew 4% to $5.5 billion in 4Q17, driven by 2% operational revenue growth and a 2% boost from foreign currency translation.

A few products in Pfizer’s (PFE) portfolio reported declining sales in 4Q17 following their loss of market share to the competition.

Eli Lilly’s valuation In 4Q17, Eli Lilly and Company (LLY) surpassed Wall Street analysts’ EPS (earnings per share) and revenue estimates of $1.07 and ~$5.9 billion, respectively, reporting EPS of $1.14 on revenue of ~$6.2 billion. The above chart shows Eli Lilly’s EPS and revenue since 1Q16. In fiscal 2017, Eli Lilly reported EPS of $4.28 on […]

Pfizer (PFE) reported 1% growth in revenues to $13.7 billion during 4Q17 as compared to revenues of $13.6 billion during 4Q16.

Elanco is expected to report growth in revenues during 4Q17, following strong sales and a favorable impact of foreign exchange.

Johnson & Johnson (JNJ) reported ~48.0% of its total revenues from the Pharmaceuticals business during 4Q17, making it the company’s largest revenue contributor.

Wall Street analysts expect Pfizer’s (PFE) revenues to increase ~0.7% to $13.72 billion during 4Q17—compared to revenues of $13.63 billion during 4Q16.

Johnson & Johnson’s (JNJ) Pharmaceutical segment contributes more than 45% to total revenues. In 4Q17, it’s expected to report growth in operating revenues.

Merck’s (MRK) Animal Health segment’s total revenues increased ~16% to $1 billion in 3Q17 compared to $865 million in 3Q16.

Recent developments reported by Mylan (MYL) include commercial developments as well as product developments. Let’s take a closer look.

On December 27, 2017, Johnson & Johnson (JNJ) was trading at a forward price-to-earnings multiple of ~17.8x compared to the industry average of 15.8x.

Eli Lilly’s human pharmaceuticals segment contributed ~87% of Eli Lilly’s total revenues in 3Q17.

In this final series of our three-part series, we’ll be looking at the last seven stocks among the top 18 cheap stocks in the S&P 500 for 2018.

Merck & Co.’s (MRK) Gardasil franchise reported total sales of $675 million in3Q17, a 22% fall compared to $860 million in 3Q16.

In 3Q17, Pfizer’s (PFE) Celebrex generated revenues of $212 million, a ~9% increase on a year-over-year (or YoY) basis and a 19% increase on a quarter-over-quarter basis.

Eli Lilly’s (LLY) new products include Basaglar, Cyramza, Jardiance, Lartruvo, Olumiant, Taltz, and Trulicity.

Analysts expect Merck’s (MRK) revenues for 3Q17 to be around $10,546 million, nearly a 0.1% increase as compared to the revenues of $10,536 million reported for 3Q16.

Johnson & Johnson (JNJ) reported a 2.9% increase in its revenues at constant exchange rates in 2Q17.

Pfizer (PFE) reported revenues of ~$12.9 billion in 2Q17, which was ~2% lower than its revenues of ~$13.2 billion in 2Q16.

For 2Q17, Keytruda reported revenues of $881 million, which represents 183% growth at constant exchange rates.

Eli Lilly and Co.’s (LLY) cardiovascular franchise includes two drugs—Cialis and Effient. These drugs comprise ~15.0% of the company’s total revenues.

Bristol Myers Squibb’s (BMY) cardiovascular portfolio includes the blockbuster drug Eliquis.

Jazz Pharmaceuticals expects Defitelio to report revenues in the range of $130 million to $150 million globally in 2017.

On August 3, JAZZ managed to secure regulatory approval from the FDA for its innovative drug, Vyxeos, as a treatment option for two types of acute myeloid leukemia.

Bristol-Myers Squibb’s (BMY) virology portfolio includes drugs for the treatment of chronic viral diseases and infections such as hepatitis B, hepatitis C, and HIV.

Allergan’s revenues are driven by the strong performance of products under its key brands as well as the inclusion of revenues from LifeCell and other acquisitions.

Pharmaceutical ETFs Pharmaceutical ETFs are securities designed for investors who do not have the capacity to hold many stocks but are interested in diversification of their investments within the pharmaceutical sector. Besides diversification, ETFs have other benefits, such as the ability to sell short, buy on margin, and purchase a single unit. Also, the expense […]

There are a few products in Pfizer’s (PFE) portfolio that are losing market share due to competition.

In 1Q17, Allergan’s US Specialized Therapeutics segment revenues rose 14.1% to $1.48 billion, as compared to $1.30 billion in 1Q16.

Cialis sales decreased over 7% to $533.6 million during 1Q17, compared to $576.7 million for 1Q16.

Johnson & Johnson’s Consumer segment’s revenue rose 1.0% year-over-year to $3.2 billion in 1Q17. This rise included an operational rise of 0.8% and the positive impact of foreign exchange.

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 total sales for MRK’s Gardasil franchise during 4Q16 totaled $542 million, an increase of ~9% over $497 million for 4Q15.

Mylan’s fall in revenues was driven by lower sales and lower wholesale purchases of the EpiPen Auto-Injector in anticipation of the generic version.

With the loss of patent protection for its flagship drug, Lipitor, Pfizer’s revenue fell to $48.8 billion in 2015, compared to $67 billion in 2010.

Since its launch in February 2015, Pfizer’s Ibrance has quickly captured the advanced breast cancer market and has reached more than 40,000 patients.

Januvia and Janumet together contributed about 14.7% of Merck’s (MRK) total revenues for 3Q16, an ~0.9% decrease compared to 3Q15.

CheckMate-141 Bristol-Myers Squibb’s (BMY) CheckMate-141 evaluated Opdivo for the treatment of squamous cell carcinoma of the head and neck. The study was stopped after meeting the primary endpoint in January 2016. The drug is under priority review by the FDA with an action date set for November 11, 2016. With similar approved indications, Opdivo and Merck’s (MRK) […]

Gardasil, a vaccine for the prevention of strains of the human papillomavirus (or HPV) that are sexually transmitted, is Merck & Co.’s leading vaccines franchise.

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.

The market was pleased with the merger deal between Horizon Pharma (HZNP) and Raptor Pharmaceuticals. HZNP shares rose to $18.89 on September 12.

Eli Lilly and Co.’s (LLY) animal health company, Elanco, reported an increase of 2% in revenues at $860 million in 2Q16—compared to $841 million in 2Q15.

In addition to industry-specific risks faced by all generic pharmaceutical players, Akorn (AKRX) faces certain company-specific risks.

Januvia and Janumet are two blockbuster drugs in Merck’s (MRK) diabetes franchise.

In 1Q16, Horizon Pharm’s sales on a YoY basis grew by 81% to $205 million. During that period, its adjusted EBITDA jumped annually by 122% to $72 million.

Januvia and Janumet are Merck & Co.’s (MRK) blockbuster diabetes drugs. They’re are used to lower blood sugar levels in patients with Type 2 diabetes.

Merck & Co.’s (MRK) current valuation is neither high nor low. Its valuation multiple has followed the industry’s overall trend over the last five years.

Eli Lilly’s (LLY) cardiovascular franchise contributed ~15.5% of the company’s total revenues in 1Q16.

Over the past 18 months, Horizon Pharma has acquired three orphan drugs. The acquisition of Hyperion Therapeutics in May 2015 gave it Ravicti and Buphenyl.

The business strategies of both Mallinckrodt and Valeant reflect what the former refers to as “Acquire to Invest.”

According to Teva, the biggest challenge for its OTC segment is foreign exchange fluctuations. It generates all of its revenue in non-US dollars and then reports back in US dollars.

Mylan takes an M&A strategy to save time related to compliance activities for obtaining regulatory approvals across various international markets.

Mylan is a leading pharmaceutical company that operates in more than 140 countries and operates across five different therapeutic areas.

Mylan NV is the generic drug leader in the US prescription drug market with blockbuster drugs such as Perforomist, Ultiva, and Emsam.

The PE ratio for global big pharma increased from 14.9x in 2011 to 26x in 2014. This trend is a measure of increasing investor confidence.