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24900.0 | 2019-08-27 00:00:00 UTC | Should You Buy AbbVie for the Dividend? | ABBV | https://www.nasdaq.com/articles/should-you-buy-abbvie-for-the-dividend-2019-08-27 | nan | nan | AbbVie Inc (NYSE: ABBV) has been on a downward spiral since early 2018. Year to date, the company's share price has decreased by about 26%. This prolonged slump is unprecedented for AbbVie, at least since the firm spun off from Abbott Laboratories (NYSE: ABT). Despite these headwinds, it is hard to ignore AbbVie's stellar dividend history, and its juicy 6.1% dividend. However, a company's ability to sustain its dividends is a function of its earnings prospects. Can AbbVie continue to generate the income necessary to keep its dividends intact?
Image source: Getty Images
Humira and beyond
AbbVie's recent struggles started with the disappointing results from a study on the effects of rovalpituzumab tesirine, better known as ROVA-T, as a treatment for lung cancer. The negative results meant that AbbVie's nearly $6 billion deal with Stemcentrx was more or less a waste of money. Sure, the deal did include other clinical compounds, but none nearly as promising as ROVA-T. Investors have also been worried about the pharma company's top line exposure to Humira. Though Humira has been AbbVie's top selling drug for a while -- spearheading the firm's revenue growth -- it is now facing stiff competition in Europe. As a result, AbbVie's international revenues will decline in the coming years. However, the company is aware of these obstacles and has made several moves to adjust accordingly.
First, the prophecies of doom regarding Humira's declining prospects may have been a bit exaggerated. The company expects its top selling product to remain one of the leaders in the immunology market, and for that matter, one of the world's best selling drugs, for at least a few more years. This may not be enough to offset Humira's declining revenues in Europe, as we learned when the firm released its latest financial results. US sales of Humira increased by about 8% during AbbVie's second quarter, but its international sales decreased by 35%, resulting in a net decrease of 6% year over year. Still, these figures aren't as bad as one might have expected. Second, AbbVie has other drugs it can count on to keep its revenues afloat, one of which is Venclexta, a treatment for second-line chronic lymphocytic leukemia. Sales of Venclexta in 2018 were $344 million, which was more than double what they were in 2017. Another product AbbVie plans to rely on moving forward is Imbruvica. In 2018, sales of Imbruvica came in at $3.59 billion, a nearly 40% increase from 2017. Year to date, Venclexta and Imbruvica have generated revenues of $320 million and $2.12 billion, respectively. The firm expects both of these drugs to be key growth drivers in the future. Their combined revenues will likely double within the next half a decade or so, according to the pharma company.
AbbVie merges with Allergan
Perhaps the biggest move AbbVie made recently was its blockbuster merger with Allergan (NYSE: AGN) in a cash-and-stock deal valued at $63 billion. Allergan has had its own problems in recent years. The Botox maker's revenues have been declining with no signs of better things to come. From AbbVie's perspective, this merger will help achieve one major goal, namely to decrease its top line exposure to Humira. Synergy issues between the two companies aside, detractors will argue that Allergan suffers from the same problem that has plagued AbbVie: an over reliance on one product line (its Botox business). There are also concerns over whether AbbVie may have paid a bit too much for this acquisition. The $63 billion price-tag included a $20 billion premium on Allergan's market value. While all these objections carry some weight, the deal has a strong upside potential. AbbVie's diversification into new areas of the pharmaceutical market by way of this acquisition is commendable. It will help the firm pursue entirely new avenues to keep its earnings growing.
Should you buy?
AbbVie has increased its quarterly dividend payouts by 167.5% since it split from Abbott in 2013, and the company generates more than enough cash to cover its dividend payments. Although sales of Humira will decline abroad, and will eventually encounter competition in the US, the firm possesses several up-and-coming drugs that will generate billions of dollars in sales, and an entirely new portfolio of products via its merger with Allergan. Clearly, AbbVie isn't for every investor, but with a (relatively) attractive future earnings potential, the pharma company still looks like an excellent pick for those looking for top dividend stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Though Humira has been AbbVie's top selling drug for a while -- spearheading the firm's revenue growth -- it is now facing stiff competition in Europe. Synergy issues between the two companies aside, detractors will argue that Allergan suffers from the same problem that has plagued AbbVie: an over reliance on one product line (its Botox business). Clearly, AbbVie isn't for every investor, but with a (relatively) attractive future earnings potential, the pharma company still looks like an excellent pick for those looking for top dividend stocks. | US sales of Humira increased by about 8% during AbbVie's second quarter, but its international sales decreased by 35%, resulting in a net decrease of 6% year over year. AbbVie Inc (NYSE: ABBV) has been on a downward spiral since early 2018. This prolonged slump is unprecedented for AbbVie, at least since the firm spun off from Abbott Laboratories (NYSE: ABT). | US sales of Humira increased by about 8% during AbbVie's second quarter, but its international sales decreased by 35%, resulting in a net decrease of 6% year over year. AbbVie merges with Allergan Perhaps the biggest move AbbVie made recently was its blockbuster merger with Allergan (NYSE: AGN) in a cash-and-stock deal valued at $63 billion. Clearly, AbbVie isn't for every investor, but with a (relatively) attractive future earnings potential, the pharma company still looks like an excellent pick for those looking for top dividend stocks. | US sales of Humira increased by about 8% during AbbVie's second quarter, but its international sales decreased by 35%, resulting in a net decrease of 6% year over year. Clearly, AbbVie isn't for every investor, but with a (relatively) attractive future earnings potential, the pharma company still looks like an excellent pick for those looking for top dividend stocks. AbbVie Inc (NYSE: ABBV) has been on a downward spiral since early 2018. |
24901.0 | 2019-08-25 00:00:00 UTC | Better Buy: AbbVie vs. Johnson & Johnson | ABBV | https://www.nasdaq.com/articles/better-buy%3A-abbvie-vs.-johnson-johnson-2019-08-25 | nan | nan | AbbVie (NYSE: ABBV) and Johnson & Johnson (NYSE: JNJ) partner on one of the biggest cancer drugs in the world. At the same time, the two pharmaceutical companies compete tooth-and-nail against each other in the immunology market.
J&J has been the bigger winner so far in 2019 even with its stock down slightly year to date. That's because AbbVie's shares have plunged nearly 30% as investors worry about threats to its top-selling drug, Humira. But which of these two big pharma stocks is the better pick going forward?
Image source: Getty Images.
The case for AbbVie
AbbVie has known for years that sales for its blockbuster immunology drug, Humira, would one day begin to slip. That day has come, with biosimilars to Humira hitting the market in Europe last year. AbbVie's strategy to overcome the headwinds for Humira has proven to be a pretty good one so far.
The company's 2015 acquisition of Pharmacyclics brought Imbruvica into its lineup. Market researcher EvaluatePharma projects that the blood cancer drug will be the No. 5 best-selling drug in the world by 2024 with annual sales of $9.5 billion. AbbVie will share the revenue with Pharmacyclics' partner, Johnson & Johnson.
AbbVie's investment in research and development has also produced some big wins. These wins include another blood cancer drug, Venclexta, that could generate peak sales of at least $2 billion. AbbVie thinks that Orilissa, which is already approved for treating endometriosis and could pick up another approval in treating uterine fibroids, could deliver another $2 billion in annual sales in the future.
Humira also now has two worthy successors. AbbVie won FDA approval of Skyrizi (risankizumab) in April 2019 for treating plaque psoriasis. It followed up earlier this month with FDA approval for Rinvoq (upadacitinib) in treating rheumatoid arthritis. EvaluatePharma ranked Rinvoq and Skyrizi as the No. 2 and No. 3 biggest new drug launches of 2019, respectively.
AbbVie plans to acquire Allergan for $63 billion to further reduce its dependence on Humira. The deal will enable AbbVie to gain a lineup including blockbuster drug Botox and promising eye-disease candidate abicipar.
Many investors still aren't convinced AbbVie is on the right track, though. As a result, its stock trades at a little over seven times expected earnings. The drop in AbbVie's share price has also pushed its dividend yield to a mouthwatering 6.4%.
The case for Johnson & Johnson
Johnson & Johnson faces its own challenges with its top-selling drug, Remicade. Sales for the immunology drug are sliding in the wake of biosimilar competition. One key difference between J&J and AbbVie, though, is that Remicade currently contributes 5% of J&J's total sales, while Humira contributes nearly 59% of AbbVie's total sales.
This highlights a major strength for Johnson & Johnson -- its diversification. J&J is a big pharma company, but it's also a big consumer healthcare company and a big medical device maker. Even if Johnson & Johnson encounters headwinds with one segment of its business, there are two other multibillion-dollar segments that can help pick up the slack. As a case in point, the company's medical device segment stood out as one of the bright spots in J&J's second quarter.
That's not to say that Johnson & Johnson's pharmaceutical segment is performing horribly. Despite the declining sales for Remicade and prostate cancer drug Zytiga, the segment still continues to generate overall revenue growth.
Sales for immunology drugs Stelara and Tremfya are soaring. Imbruvica's momentum benefits Johnson & Johnson just as it does AbbVie. J&J's multiple myeloma drug Darzalex is already on track to make close to $3 billion this year and could generate peak annual sales of more than $8 billion.
Johnson & Johnson is also able to use its strong financial position to make strategic acquisitions that bolster its growth prospects. The company acquired Swiss drugmaker Actelion in 2017 to get its pulmonary hypertension drugs. J&J acquired Auris Health earlier this year to strengthen its position in the expanding robotic surgical systems market.
We can't discuss the case for J&J without mentioning its dividend. The company's dividend currently yields 2.9%. More importantly, J&J's track record when it comes to dividends is impressive, with 57 consecutive years of dividend increases.
Better buy
Johnson & Johnson has probably never been a bad pick for investors. The company's stature in the healthcare sector and its long history of growth and dividend hikes are reassuring. However, I think that AbbVie is the better pick right now.
My view is that the market is undervaluing the potential for AbbVie to overcome Humira's declining sales. With its super-high dividend yield, AbbVie doesn't have to deliver much growth in its share price for investors to enjoy solid total returns.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The deal will enable AbbVie to gain a lineup including blockbuster drug Botox and promising eye-disease candidate abicipar. With its super-high dividend yield, AbbVie doesn't have to deliver much growth in its share price for investors to enjoy solid total returns. AbbVie (NYSE: ABBV) and Johnson & Johnson (NYSE: JNJ) partner on one of the biggest cancer drugs in the world. | The case for AbbVie AbbVie has known for years that sales for its blockbuster immunology drug, Humira, would one day begin to slip. With its super-high dividend yield, AbbVie doesn't have to deliver much growth in its share price for investors to enjoy solid total returns. AbbVie (NYSE: ABBV) and Johnson & Johnson (NYSE: JNJ) partner on one of the biggest cancer drugs in the world. | AbbVie (NYSE: ABBV) and Johnson & Johnson (NYSE: JNJ) partner on one of the biggest cancer drugs in the world. The case for AbbVie AbbVie has known for years that sales for its blockbuster immunology drug, Humira, would one day begin to slip. That's because AbbVie's shares have plunged nearly 30% as investors worry about threats to its top-selling drug, Humira. | The case for AbbVie AbbVie has known for years that sales for its blockbuster immunology drug, Humira, would one day begin to slip. AbbVie (NYSE: ABBV) and Johnson & Johnson (NYSE: JNJ) partner on one of the biggest cancer drugs in the world. That's because AbbVie's shares have plunged nearly 30% as investors worry about threats to its top-selling drug, Humira. |
24902.0 | 2019-08-20 00:00:00 UTC | IXJ, LLY, ABBV, DHR: Large Outflows Detected at ETF | ABBV | https://www.nasdaq.com/articles/ixj-lly-abbv-dhr%3A-large-outflows-detected-at-etf-2019-08-20 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Global Healthcare ETF (Symbol: IXJ) where we have detected an approximate $52.0 million dollar outflow -- that's a 2.4% decrease week over week (from 35,750,000 to 34,900,000). Among the largest underlying components of IXJ, in trading today Lilly (Eli) & Co (Symbol: LLY) is down about 0.7%, AbbVie Inc (Symbol: ABBV) is up about 2.1%, and Danaher Corp (Symbol: DHR) is lower by about 0.2%. For a complete list of holdings, visit the IXJ Holdings page » The chart below shows the one year price performance of IXJ, versus its 200 day moving average:
Looking at the chart above, IXJ's low point in its 52 week range is $53.77 per share, with $63.755 as the 52 week high point — that compares with a last trade of $61.18. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of IXJ, in trading today Lilly (Eli) & Co (Symbol: LLY) is down about 0.7%, AbbVie Inc (Symbol: ABBV) is up about 2.1%, and Danaher Corp (Symbol: DHR) is lower by about 0.2%. For a complete list of holdings, visit the IXJ Holdings page » The chart below shows the one year price performance of IXJ, versus its 200 day moving average: Looking at the chart above, IXJ's low point in its 52 week range is $53.77 per share, with $63.755 as the 52 week high point — that compares with a last trade of $61.18. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of IXJ, in trading today Lilly (Eli) & Co (Symbol: LLY) is down about 0.7%, AbbVie Inc (Symbol: ABBV) is up about 2.1%, and Danaher Corp (Symbol: DHR) is lower by about 0.2%. For a complete list of holdings, visit the IXJ Holdings page » The chart below shows the one year price performance of IXJ, versus its 200 day moving average: Looking at the chart above, IXJ's low point in its 52 week range is $53.77 per share, with $63.755 as the 52 week high point — that compares with a last trade of $61.18. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of IXJ, in trading today Lilly (Eli) & Co (Symbol: LLY) is down about 0.7%, AbbVie Inc (Symbol: ABBV) is up about 2.1%, and Danaher Corp (Symbol: DHR) is lower by about 0.2%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Global Healthcare ETF (Symbol: IXJ) where we have detected an approximate $52.0 million dollar outflow -- that's a 2.4% decrease week over week (from 35,750,000 to 34,900,000). For a complete list of holdings, visit the IXJ Holdings page » The chart below shows the one year price performance of IXJ, versus its 200 day moving average: Looking at the chart above, IXJ's low point in its 52 week range is $53.77 per share, with $63.755 as the 52 week high point — that compares with a last trade of $61.18. | Among the largest underlying components of IXJ, in trading today Lilly (Eli) & Co (Symbol: LLY) is down about 0.7%, AbbVie Inc (Symbol: ABBV) is up about 2.1%, and Danaher Corp (Symbol: DHR) is lower by about 0.2%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Global Healthcare ETF (Symbol: IXJ) where we have detected an approximate $52.0 million dollar outflow -- that's a 2.4% decrease week over week (from 35,750,000 to 34,900,000). For a complete list of holdings, visit the IXJ Holdings page » The chart below shows the one year price performance of IXJ, versus its 200 day moving average: Looking at the chart above, IXJ's low point in its 52 week range is $53.77 per share, with $63.755 as the 52 week high point — that compares with a last trade of $61.18. |
24903.0 | 2019-08-20 00:00:00 UTC | AbbVie's Latest FDA Approval Is Its Most Important Immunology Win Since Humira | ABBV | https://www.nasdaq.com/articles/abbvies-latest-fda-approval-is-its-most-important-immunology-win-since-humira-2019-08-20 | nan | nan | You might not have noticed it, but AbbVie (NYSE: ABBV) is on a roll -- at least when it comes to winning drug approvals. Since the beginning of 2019, the big biotech has racked up U.S. Food and Drug Administration (FDA) approvals for a combination of Imbruvica and Gazyva in treating chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL), a combination of Venclexta and Gazyva as a first-line treatment for CLL/SLL, and Skyrizi in treating plaque psoriasis.
On Friday, AbbVie added another key FDA approval with a positive decision for Rinvoq (upadacitinib) in treating rheumatoid arthritis. This latest FDA approval is AbbVie's biggest regulatory victory so far this year. And it just might be the most important immunology win for the company since Humira.
Image source: Getty Images.
Better than Humira
Humira has emerged as the gold standard in treating rheumatoid arthritis. However, Rinvoq appears to be even better than its predecessor.
AbbVie announced results last year from the Select-Compare phase 3 clinical study evaluating Rinvoq versus Humira in treating rheumatoid arthritis. The company used five different clinical outcome measurements to compare its two drugs. Rinvoq scored better than Humira on all five measures of efficacy.
Three of those outcomes were based on the American College of Rheumatology's measurements of improvement in the systems of rheumatoid arthritis -- ACR20, ACR50, and ACR70, which indicate 20%, 50%, and 70% improvement, respectively. Seventy-one percent of patients taking Rinvoq achieved an ACR20 response, compared with 63% of patients taking Humira. Rinvoq looked even more impressive on ACR50 response rate, with 45% of patients achieving the level of improvement versus 29% for patients receiving Humira. Nearly twice as many patients taking Rinvoq achieved an ACR70 response than those on Humira (25% compared to 13%).
In addition, a significantly higher percentage of patients receiving Rinvoq achieved clinical remission (29%) than patients receiving Humira (18%). Low disease activity was observed in 45% of patients taking Rinvoq compared to 29% of patients taking Humira.
To put icing to the cake, Rinvoq is more convenient to take than Humira. While Humira is an injection, Rinvoq is an oral medication taken once daily. Even better, AbbVie designed the packaging for Rinvoq to make it really easy for individuals with rheumatoid arthritis to get pills from the bottle. This design was so effective that it was awarded the Arthritis Foundation Ease of Use Commendation.
But not bigger than Humira
Since Rinvoq is more effective and more convenient to take than Humira, can it surpass Humira in sales? The chances are slim. Humira reigns as the best-selling drug in the world, racking up sales of nearly $20 billion last year. The dynamics in the immunology market are very different than when Humira began its climb to the top. However, Rinvoq appears very likely to become AbbVie's biggest immunology drug after Humira.
Earlier this year, market researcher EvaluatePharma ranked upadacitinib as the No. 2 most valuable pipeline drug in development. It also projected that upadacitinib would be the second-biggest new drug launch of 2019. At the time, EvaluatePharma estimated that the drug would generate sales of $2.2 billion by 2024. Now, however, EvaluatePharma has a more optimistic outlook for upadacitinib, projecting sales of $2.5 billion by 2024.
AbbVie plans to launch upadacitinib in the U.S. under the brand name Rinvoq later in August. The drugmaker has expectations that are even more upbeat than EvaluatePharma's. AbbVie executives have stated that they expect Rinvoq will achieve peak annual sales in the ballpark of $6.5 billion.
Not all of those sales will be made in treating rheumatoid arthritis, though. AbbVie is also evaluating Rinvoq in late-stage clinical studies targeting atopic dermatitis, Crohn's disease, giant cell arteritis, psoriatic arthritis, and ulcerative colitis. The company is also conducting a phase 2 clinical study of the drug in treating axial spondyloarthritis.
Other arrows in AbbVie's quiver
Humira certainly casts a long shadow over AbbVie. Rinvoq is a critical component of the company's strategy to offset declining sales for its top drug as it faces competition from biosimilar rivals. However, AbbVie also has several other arrows in its quiver in addition to Rinvoq.
AbbVie's blood cancer drugs Imbruvica and Venclexta continue to enjoy strong momentum. The company expects Orilissa will be a blockbuster in the future in its currently approved indication of managing endometriosis pain and potentially in treating uterine fibroids. AbbVie thinks that Skyrizi will deliver sales of close to $5 billion, although that's more optimistic than some analysts predict.
The company is also counting on the pending acquisition of Allergan to reduce its dependence on Humira. AbbVie anticipates that the transaction will close in early 2020.
AbbVie stock currently trades at only a little over seven times expected earnings. Many investors clearly aren't convinced that the company's efforts to overcome the headwinds for Humira will work out. But if Rinvoq achieves the success AbbVie is hoping for, this stock likely won't remain this cheap.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie announced results last year from the Select-Compare phase 3 clinical study evaluating Rinvoq versus Humira in treating rheumatoid arthritis. AbbVie is also evaluating Rinvoq in late-stage clinical studies targeting atopic dermatitis, Crohn's disease, giant cell arteritis, psoriatic arthritis, and ulcerative colitis. You might not have noticed it, but AbbVie (NYSE: ABBV) is on a roll -- at least when it comes to winning drug approvals. | AbbVie announced results last year from the Select-Compare phase 3 clinical study evaluating Rinvoq versus Humira in treating rheumatoid arthritis. You might not have noticed it, but AbbVie (NYSE: ABBV) is on a roll -- at least when it comes to winning drug approvals. On Friday, AbbVie added another key FDA approval with a positive decision for Rinvoq (upadacitinib) in treating rheumatoid arthritis. | AbbVie announced results last year from the Select-Compare phase 3 clinical study evaluating Rinvoq versus Humira in treating rheumatoid arthritis. However, Rinvoq appears very likely to become AbbVie's biggest immunology drug after Humira. You might not have noticed it, but AbbVie (NYSE: ABBV) is on a roll -- at least when it comes to winning drug approvals. | On Friday, AbbVie added another key FDA approval with a positive decision for Rinvoq (upadacitinib) in treating rheumatoid arthritis. You might not have noticed it, but AbbVie (NYSE: ABBV) is on a roll -- at least when it comes to winning drug approvals. This latest FDA approval is AbbVie's biggest regulatory victory so far this year. |
24904.0 | 2019-08-19 00:00:00 UTC | 5 Biggest New Drug Approvals Potentially on the Way in 2019 | ABBV | https://www.nasdaq.com/articles/5-biggest-new-drug-approvals-potentially-on-the-way-in-2019-2019-08-19 | nan | nan | AbbVie (NYSE: ABBV) and Novartis (NYSE: NVS) scored key drug approvals by the U.S. Food and Drug Administration (FDA) earlier this year. Each of the two companies landed products in market researcher EvaluatePharma's top-five list of the biggest new drugs approved so far in 2019.
But what about important FDA approvals that could be on the way in the remaining months of the year? EvaluatePharma also ranked the five biggest potential new drug approvals on the way in 2019. AbbVie and Novartis made this list, too. So did big biotech Celgene (NASDAQ: CELG) and three smaller drugmakers, Acceleron Pharma (NASDAQ: XLRN), Ardelyx (NASDAQ: ARDX) and Intra-Cellular Therapies (NASDAQ: ITCI). Here's which of these companies' pipeline candidates ranked on EvaluatePharma's list.
Image source: Getty Images.
1. Upadacitinib
EvaluatePharma ranked AbbVie's Skyrizi as the No. 1 new drug approved so far this year. Another immunology drug from AbbVie, upadacitinib, took the top spot on the market researcher's list of the biggest new drug approvals on the way.
Actually, this top drug on EvaluatePharma's list isn't on the way to FDA approval anymore. On Friday, the FDA gave a thumbs-up to upadacitinib, which AbbVie plans to sell under the brand name Rinvoq. EvaluatePharma projects that the drug will generate annual sales of more than $2.5 billion by 2024. AbbVie, however, thinks that upadacitinib could ultimately reach peak annual sales of $6.5 billion.
2. Brolucizumab
Novartis landed drugs in the No. 3 and No. 4 positions on EvaluatePharma's ranking of new drugs approved so far in 2019. The Swiss pharmaceutical company's wet age-related macular degeneration (AMD) drug brolucizumab ranked No. 2 among the top potential new drug approvals on the way this year, according to EvaluatePharma.
The FDA accepted Novartis' filing for brolucizumab on April 15. Since the company used a priority review voucher, the review process should be completed within six months, with an FDA decision on the way by mid-October. EvaluatePharma estimates that the wet AMD drug, assuming it's approved, could make nearly $1.2 billion annually by 2024. GlobalData analysts project that brolucizumab could reach peak annual sales of between $4.1 billion and $7 billion.
3. Lumateperone
Intra-Cellular Therapies could be headed for a game-changing year if its schizophrenia drug lumateperone wins FDA approval. EvaluatePharma views lumateperone as the third-biggest potential new drug approval ahead in the back half of 2019.
However, this one is really iffy. The FDA canceled an advisory committee meeting in July and pushed back the PDUFA date (the deadline for completing its review of a drug) from Sept. 27, 2019, to Dec. 27, 2019. The agency also requested additional data related to toxicity findings in animals in preclinical studies. If lumateperone goes on to win approval, though, EvaluatePharma expects the drug will rack up annual sales of more than $1.1 billion by 2024.
4. Luspatercept
Luspatercept landed at No. 4 on EvaluatePharma's list. Acceleron originally developed the drug, but Celgene partnered with the small biotech in 2011 and is advancing luspatercept through the regulatory approval process.
Celgene filed for FDA approval of luspatercept in treating beta-thalassemia and in treating myelodysplastic syndromes (MDS)-associated anemia. The FDA should make its decision on the beta-thalassemia indication by Dec. 4, 2019, with a decision on the MDS indication expected by April 4, 2020. EvaluatePharma projects that the drug will generate annual sales of close to $1.1 billion by 2024.
5. Tenapanor
Small biotech Ardelyx should be only a few weeks away from some big news. The FDA is scheduled to announce an approval decision for tenapanor in treating irritable bowel syndrome with constipation (IBS-C) by Sept. 12, 2019.
EvaluatePharma expects that the drug could pull in nearly $700 million annually by 2024 if it's approved. Ardelyx hopes that the IBS-C is only the first of two approved indications for tenapanor. The company is also evaluating the drug in a phase 3 clinical study for treating hyperphosphatemia in patients with end-stage renal disease (ESRD) who are on dialysis.
Big impacts
FDA approvals for lumateperone and tenapanor would definitely have huge impacts for Intra-Cellular Therapies and Ardelyx. Neither company has an approved product on the market yet.
Bristol-Myers Squibb is in the process of acquiring Celgene. The FDA approvals for luspatercept are more important to this deal now that U.S. regulators are requiring BMS to sell Celgene's blockbuster psoriasis and psoriatic arthritis drug Otezla.
Novartis is embroiled in a scandal over its use of falsified preclinical data in its FDA application package for gene therapy Zolgensma. Approval for potential massive blockbuster brolucizumab could help reassure investors about the big pharma stock.
AbbVie faces declining sales for Humira, currently the top-selling drug in the world. FDA approval for upadacitinib is an enormously important component of the company's strategy to offset its issues with Humira.
The bottom line is that these big new drug approvals potentially on the way in the rest of 2019 (or in the case of upadacitinib, already approved) could be bigger to the companies involved than meets the eye.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE: ABBV) and Novartis (NYSE: NVS) scored key drug approvals by the U.S. Food and Drug Administration (FDA) earlier this year. AbbVie and Novartis made this list, too. Upadacitinib EvaluatePharma ranked AbbVie's Skyrizi as the No. | AbbVie (NYSE: ABBV) and Novartis (NYSE: NVS) scored key drug approvals by the U.S. Food and Drug Administration (FDA) earlier this year. AbbVie and Novartis made this list, too. Upadacitinib EvaluatePharma ranked AbbVie's Skyrizi as the No. | AbbVie (NYSE: ABBV) and Novartis (NYSE: NVS) scored key drug approvals by the U.S. Food and Drug Administration (FDA) earlier this year. Another immunology drug from AbbVie, upadacitinib, took the top spot on the market researcher's list of the biggest new drug approvals on the way. AbbVie and Novartis made this list, too. | AbbVie (NYSE: ABBV) and Novartis (NYSE: NVS) scored key drug approvals by the U.S. Food and Drug Administration (FDA) earlier this year. AbbVie and Novartis made this list, too. Upadacitinib EvaluatePharma ranked AbbVie's Skyrizi as the No. |
24905.0 | 2019-08-15 00:00:00 UTC | 13 High-Yield Dividend Stocks to Watch | ABBV | https://www.nasdaq.com/articles/13-high-yield-dividend-stocks-to-watch-2019-08-15 | nan | nan | High-yield dividend stocks have gained even more allure lately in the face of shrinking bond yields. However, while a handful are ready buys right now, several more sport alluring yields - at least 5%, and up into the double digits - but need a little more time to simmer before it's time to dip in.
Patience is a virtue in life. That's particularly true in the investing world. It's even true across investing disciplines. Sober value investors wait for their price before buying, but disciplined market technicians also know to wait for the proper setup before trading.
Sometimes, you need to wait for a fundamental catalyst to make your trade worth making. Other times, it's simply a matter of waiting for the right price. But the key is having the self-control to wait for your moment. Lack of patience can be a portfolio killer.
"We tell our clients during the onboarding process that we won't be investing their entire portfolio on day one," explains Chase Robertson, Managing Partner of Houston-based RIA Robertson Wealth Management. "We tend to average into our portfolios over time as market conditions warrant, and we're not opposed to having large cash positions. Our clients thank us in the end."
Today, we're going to look at 13 high-yield dividend stocks to keep on your watch list. All are stocks yielding over 5% that you probably could buy today, but all have their own unique quirks that might make it more prudent to watch them a little longer rather than jump in with both feet.
SEE ALSO: 57 Dividend Stocks You Can Count On in 2019
Las Vegas Sands
Market value: $39.9 billion
Dividend yield: 6.0%
In the company's own words, casino operator Las Vegas Sands (LVS, $51.79) is the "global leader in integrated resort development and operation."
While that might sound like a grand claim, it's hard to argue. The company owns a vast portfolio of gaming hotels and resorts in the United States and Asia. Some of its iconic properties include the Venetian Resort Hotel Casino on the Las Vegas Strip, the Venetian Macao Resort Hotel, the Plaza Macao and Four Seasons Hotel Macao, among others.
Las Vegas Sands isn't just a high-yield dividend stock - it's a payout growth machine, too. The company has hiked its cash distribution at a 17.4% annualized clip between 2012 and the first half of 2019.
Las Vegas Sands' greatest strength over the past decade has, unfortunately, become its greatest weakness today. The company gets the lion's share of its revenues and earnings from Asia, and specifically China. As of the second quarter, 61% of LVS's earnings before interest, taxes, depreciation and amortization (EBITDA) came from the Chinese territory of Macao, with another 27% coming from Singapore. A paltry 12% came from its investments in the United States.
An intrepid investor could snap up some shares of LVS today, as the shares are already down about 23% from their 52-week highs. But much has changed in just the month since we highlighted its cash-generating qualities. Given the political unrest in neighboring Hong Kong and the unpredictable effects of the ongoing trade war, it might be prudent to put the stock on your list of stocks to watch for now instead.
SEE ALSO: The Berkshire Hathaway Portfolio: All 48 Buffett Stocks
Starwood Property Trust
Market value: $6.5 billion
Dividend yield: 8.3%
Starwood Property Trust (STWD, $23.07) is a mortgage real estate investment trust (mREIT), sporting an attractive 8.2% yield.
Mortgage REITs have been a difficult asset class to trade in recent years. They effectively play the so-called carry trade, borrowing short-term and using the proceeds to buy higher-yielding, longer-dated mortgage securities. For years, higher short-term borrowing costs (because the Federal Reserve was raising interest rates) have crimped returns, and many mREITs were forced to lower their dividends as a result. Furthermore, fears that the housing market may be overheated have made some investors wary of mortgage products, which has sapped demand for mortgage REITs.
This is where Starwood gets interesting. The Federal Reserve has changed course and has started to lower interest rates, albeit grudgingly. In his last press conference, Chairman Jerome Powell indicated that his 0.25% reduction was a "mid-cycle adjustment" rather than a wholehearted embrace of lower rates.
We'll see. Fed hawkishness last year was a major driver of the fourth-quarter selloff, and Powell will want to avoid a repeat of that. So, further rate-reductions are likely, particularly given that central bank rates are negative in much of the rest of the developed world.
Lower rates would be a boon to leveraged mortgage REITs like Starwood. Though it might be more prudent to wait for Powell to show his cards before making a major new investment.
Interestingly, while part of Starwood's portfolio is invested in residential mortgage-backed securities (MBSes), the bulk of its portfolio is in commercial and infrastructure lending, as well as commercial MBSes. So, while most mortgage REITs are tied to the housing market, Starwood is far more tied to the commercial real estate market. That's neither good nor bad, but it is something to consider before buying. If you're bearish on commercial real estate, you might want to be patient and wait for your moment before striking.
SEE ALSO: All 30 Dow Stocks Ranked: The Analysts Weigh In
Tanger Factory Outlet
Market value: $1.4 billion
Dividend yield: 9.6%
Traditional suburban malls are in decline, under constant attack from changing consumer tastes and from the relentless growth of Amazon.com and other online retailers.
But outlet malls are a different story. Outlet malls tend to occupy cheaper land on the fringes of major cities, and they generally require less in the way of construction build out. They also tend to be shopping "destinations." You generally don't drive all the way to an outlet mall to buy a single sweater or a pair of shoes. You go to make a day of it, and many outlet malls tend to cater to tourists who drive into town specifically to shop at the outlet mall. No retail format can truly claim to be "Amazon-proof," but outlet malls are as close as you can reasonably get.
This brings us to Tanger Factory Outlet (SKT, $14.80). This REIT owns 39 upscale outlet shopping centers spread across 20 states and Canada totaling over 14 million square feet of retail space. It counts Nike (NKE), Under Armour (UAA) and Ralph Lauren (RL) among its largest tenants, though its largest single tenant accounts for less than 7% of its total rents.
A wave of retail bankruptcies in recent years has made investors wary of retail and mall REITs. And in an outright recession, Tanger would almost certainly see its occupancy rate drop from its current 96%. But once the dust settled, Tanger likely would be one of the first to rebound. The outlet mall is simply too important as distribution channel for most clothing and apparel brands.
Tanger has climbed into the ranks of truly high-yield dividend stocks in large part because shares have been trending lower for three years now. As a result, the company now yields close to 10%. That means anyone considering buying today is effectively trying to catch that proverbial falling knife.
Instead, investors should wait for profits and occupancy to stabilize before trying their luck with this one.
SEE ALSO: A Dozen Great REITs for Income AND Diversification
Ford
Market value: $35.9 billion
Dividend yield: 6.7%
Automakers have been a tricky sector to navigate in recent years. Investors have been enamored with electric vehicle makers like Tesla (TSLA), and for good reason. Though still profitless, Tesla boasts impressive autonomous driving technology, and the company stands to benefit from government mandates to reduce the use of fossil fuels.
The emphasis on electric cars has turned traditional automakers like Ford (F, $9.00) into something of a pariah of late. But the bigger factor weighing on the stock price is simply that we are now late in the economic cycle, and past "peak auto." With the yield curve spending a good part of this year inverted, chances are good that we get at least a mild recession within the next year or two. Auto sales tend to fall precipitously during recessions.
Ford is a truly cheap stock. It trades at less than seven times analysts' expectations of future profits (less than half as pricey as Standard & Poor's 500-stock index), and it yields well north of 6%. And despite its reputation, Ford is hardly the dinosaur legacy automaker that many investors believe it to be. It's a major investor in electric truck maker Rivian, and the company will soon be selling an all-electric F-150. Goldman Sachs even calls it a Strong Buy right this very minute.
All the same, it might be wise to wait for an economic slowdown and the slide in Ford's stock price that would likely follow. While the stock is cheap today, it might be even cheaper (and closer to a true bottom) a year from now.
SEE ALSO: 5 'Strong Buy' Dividend Stocks With High Upside
Bed Bath & Beyond
Market value: $1.0 billion
Dividend yield: 8.6%
Retail has been a treacherous place to invest in recent years. Even in a strong economy, 2017 saw more than 20 major retail bankruptcies, including major players such as Toys R Us. More than a dozen significant retailers filed for bankruptcy in 2018, including Sears, David's Bridal and Mattress Firm. And 2019 hasn't seen much of a respite, with over 15 major retailers pushed into bankruptcy so far, including Gymboree and Barney's New York.
Home goods retailer Bed Bath & Beyond (BBBY, $7.88) isn't in danger of going out of business in the immediate future. But the company has struggled of late and announced earlier this year that it would be closing at least 40 stores. Relentless growth from online competitors like Amazon.com (AMZN) and stepped-up competition from Target (TGT), Walmart (WMT) and other mass-market brick-and-mortar retailers have made for a difficult competitive landscape. And all of this at a time when the economy is actually growing at a nice clip.
BBBY shares have tanked by around 90% since 2015, which has pushed its dividend yield north of 8%. But there are reasons to believe the bloodletting might be over - among them, a trio of activist investors recently forced some changes to the board of directors and management team.
But before you rush in, you might want to give the new team at least a few quarters under their belt. Retail is a brutal business even during calmer times. A little patience here would only be prudent.
SEE ALSO: The 20 Best Small-Cap Dividend Stocks to Buy
Altria
Market value: $85.7 billion
Dividend yield: 7.0%
The high-yield dividend stocks of the tobacco industry have been resilient survivors during the past 50 years. While smoking rates have plummeted around the world, the major brands have managed to stay relevant by raising prices and cutting costs.
The best-run operators, such as Marlboro maker Altria (MO, $45.87), have managed to chug along despite a difficult environment and have managed to reward their patient shareholders with regular dividend hikes. Altria has hiked its dividend every year without interruption for nearly half a century, and the shares yield an attractive 7% at current prices.
All the same, the popularity of vaping has come as a new shock to the industry. Nielsen reported annualized volume declines of 3.5% to 5% throughout 2018. But the declines have accelerated this year, and recent Nielsen data saw volumes declining at an 11.5% rate during one four-week stretch this past spring.
Big Tobacco benefits from the popularity of vaping, but margins tend to be smaller than on traditional cigarettes. Furthermore, there is a growing concern that much of the growth in vaping is due to underage smokers picking up the habit. The U.S. Food and Drug Administration has stepped up its regulation and has gone so far as to order some vaping products removed from store shelves.
It remains to be seen how hard the regulators crack down or if traditional cigarette volumes continue to shrink at an accelerated pace. Like Ford, Goldman likes Altria right now. But it might make sense to watch Altria and the other Big Tobacco players for another quarter or two before committing. The shares have been in near-continuous decline since 2017, and trying to catch a proverbial falling knife is a good way to cut your hands.
SEE ALSO: The 25 Best Low-Fee Mutual Funds to Buy Now
UBS Group
Market value: $37.2 billion
Dividend yield: 6.7%
Bank stocks have been pariahs ever since the 2008 meltdown, and European banks have looked even more rickety than their American peers. With interest rates stuck in the gutter for most of the past decade - and with most banks being forced to reduce their risk taking following the crash - banks simply haven't been as profitable as they used to be.
Long suffering financial-stock shareholders got just a hint of optimism when it looked like the world's central banks were dead set on raising interest rates and tightening policy a year ago. But with growth no slowing, those hopes are long gone. Central banks are cutting rates again, which is a major headwind for bank profitability.
However, at some point, a stock gets simply too cheap to ignore, and Swiss bank UBS Group (UBS, $10.16) is getting awfully close. UBS trades at 7.5 times forward earnings and yields a whopping 6.7%.
With Brexit looming and with the possibility of a global recession on the horizon, it might make sense to watch UBS for a while before pulling the trigger. There's an unusually large number of macro events that could really blow up the banking sector at the moment, so there's no need to rush in.
SEE ALSO: 39 European Dividend Aristocrats for International Income Growth
AMC Entertainment
Market value: $1.1 billion
Dividend yield: 7.5%
Retail isn't the only industry to be disrupted by the internet. Between piracy, the availability of cheap, large-screen TVs and the limitless amount of content to stream via Netflix (NFLX) and other services, the movie theater simply isn't the draw it used to be.
Furthermore, sales today tend to be lumpier and more dependent on blockbuster sequels, reboots and superhero franchises. If today is a new golden era for TV programming, it's something of a swoon for movies.
All of this has weighed on the price of AMC Entertainment (AMC, $10.75), which owns a chain of 637 theaters with 8,114 screens in the United States and another 369 theaters with 2,977 screens internationally.
Making a difficult situation worse, AMC has seen its debt levels explode in recent years as it went on a consolidation spree, and it has lost money in two of the past three years. Not surprisingly, the shares have lost almost 70% of their value since the end of 2016.
The continued pounding in shares has resulted in a yield north of 7%. But perhaps AMC can weather the storm. It was one of the first chains to go higher-end, installing luxury recliners in many of its theaters to compete with the likes of Alamo Drafthouse. And the company continues to innovate. In its most recentearnings call AMC said it was considering using its theaters to broadcast live sporting events. Imagine having a Super Bowl party in the movie theater.
All the same, it might be wise to give this stock a quarter or two to find its legs. The shares have been in almost continuous decline for nearly three years, and in fact, we flagged it as a dangerous dividend play a year ago. You could have gone broke trying to call that bottom. For now, wait for signs of a real turnaround.
Antero Midstream
Market value: $3.5 billion
Dividend yield: 17.8%
Investors have been wary of the energy sector ever since the steep selloff of 2014-16. Even midstream pipeline companies - high-yield dividend stocks that merely transported commodities, and thus were thought to be immune to price swings in crude oil and natural gas - took their lumps. Once bitten, twice shy, investors fled the sector and have been reluctant to return.
Given the volatility in the energy sector again in 2019, that's not an unreasonable sentiment. But plenty of energy stocks are worth keeping an eye on.
One in particular is Antero Midstream (AM, $6.90). Antero owns and operates pipeline assets serving two of the lowest-cost natural gas and natural gas liquids (NGL) basins in North America: the Marcellus and Utica shales. Antero is a relatively small player, with a little more than 300 miles of gathering pipelines and 275 miles of freshwater pipelines. But the company is growing like a weed, and at current prices, it yields a whopping 17.04%.
A distribution yield that high simply isn't sustainable, as it means a punishingly high cost of capital. So, either Antero's share price needs to recover ... or the distribution needs to be cut.
An intrepid investor might be willing to wade in today at current prices. After all, the company raised its distribution as recently as July, and in the company's lastearnings call management indicated the distribution was safe for the foreseeable future.
Still, it might be prudent to wait another quarter or two. Continued weakness in natural gas pricing may cause Antero Midstream's partner, Antero Resources (AR), to scale back production, which could potentially slash Antero Midstream's income. For now, put this company on your list of stocks to watch.
SEE ALSO: How Well Do You Know Dividends?
Iron Mountain
Market value: $8.8 billion
Dividend yield: 8.0%
For a stodgy document storage company, Iron Mountain (IRM, $30.61) has been surprisingly adept at pushing the envelope. It convinced the IRS to accept its conversion to a REIT back in 2014 despite the fact that its activities as a landlord are questionable at best. Its countless racks stacked to the sky with document boxes certainly have little in common with apartment or office buildings.
Still, the move allowed the company to avoid corporate income tax, and it now sports a robust dividend yield of 8.0%.
Investors have been viewing Iron Mountain with an increasingly skeptical eye, as there are fears that the move to digitization by companies will crimp growth. This is true, of course, but large enterprises also tend to be slow to make major changes, and the cash flows from Iron Mountain's existing clients is sticky.
Furthermore, the company isn't resting on its laurels. Iron Mountain is busily expanding into data centers and cloud storage and is also expanding its presence overseas.
Iron Mountain has trended lower for most of 2019, so investors may want to wait for an uptrend before committing capital. And with bond yields plunging to new lows, they might not want to wait for too long on this "boring but beautiful business." High-yield dividend stocks like IRM won't go unnoticed in this environment forever.
Weyerhaeuser
Market value: $18.3 billion
Dividend yield: 5.6%
Weyerhaeuser (WY, $24.50) is one of the oldest and most successful timber REITs. It's also historically been a high yielder and currently yields about 5.5%.
Timber has unique qualities that very few other asset classes have. It's cyclical, and when construction slows, so does demand for fresh lumber. But here's the thing: Trees don't just sit there. They grow. So, during stretches of low demand, unharvested timberland actually becomes more valuable as the trees continue to mature.
That's a great long-term investment thesis. But it's the short-term twists and bends that will give you heartburn. During the 2008 meltdown, Weyerhaeuser's stock price lost 80% of its value. During the 2000-02 bear market, it lost about 30% of its value.
With the economy potentially slowing and the trade war with China lingering, it might make sense to be patient in Weyerhaeuser and wait for a significant pullback.
SEE ALSO: The 13 Best REITs to Buy in 2019
AbbVie
Market value: $93.5 billion
Dividend yield: 6.7%
Pharmaceuticals are a tough business these days. Between patent expirations, pushback from government regulators and insurance companies, and an aging population of patients that are tapped out financially, this is one of the most challenging environments in recent memory.
Not surprisingly, AbbVie (ABBV, $63.50) has had a rough ride. Apart from the factors plaguing the rest of the industry, it also is staring at a ticking patent-cliff clock for blockbuster drug Humira, and Wall Street hasn't been particularly receptive to the company's recent purchase of Botox maker Allergan. The shares have been in decline for most of 2019 and are more than 35% below their 52-week highs. Meanwhile, the dividend yield has crept up and is now sitting at a lofty 6.7%.
AbbVie trades at a ridiculously cheap 6.9 times forward earnings. At that price, there's probably not a lot of downside left in the stock. Furthermore, if the economy really is starting to get shaky, pharma stocks such as ABBV are considered defensive plays. AbbVie's generosity with cash is a bonus, too. It has raised its payout for 47 consecutive years, which includes the time it was part of Abbott Laboratories (ABT) before its 2013 split. That makes AbbVie a longtime Dividend Aristocrat.
All the same, ABBV is the proverbial falling knife at the moment. Rather than try to catch it this second, it might make more sense to give it time to form a bottom.
Oxford Lane Capital
Market value: $426.3 million
Distribution rate: 16.2%*
Expenses: 9.72%**
Oxford Lane Capital (OXLC, $10.02) might give you a headache no matter when you buy in.
Oxford Lane is a closed-end fund (CEF) that invests primarily in collateralized loan obligations (CLOs), which are pools of loans that have been packaged into tradable securities. CLOs earned themselves a bad reputation, as they and other exotic products helped blow up the world economy in 2008.
Clearly, you should tread carefully in this sector.
But investor revulsion toward CLOs helps to explain why the yields are so high today. At current prices, OXLC offers up a whopping 16.2% distribution rate - but note that a not-insignificant chunk of that will be eaten by expenses.
The appeal of collateralized loan obligations is that they reduce the risk of any single borrower by spreading the risk across a diversified pool. But during times of stress and rising delinquencies, CLOs can and do lose money. The underlying loans tend to be to riskier corporate borrowers that aren't always the most financially stable. With the global economy looking a little wobbly, this probably isn't the best time for a major new allocation.
Keep Oxford Lane on your watch list and consider it for purchase next time it sells off. During the energy rout of 2014 to 2016, OXLC saw its stock price drop by more than 60%. But in the ensuing recovery, the shares rose by more than 60%, and that doesn't include the value of dividends paid.
* Distribution rate can be a combination of dividends, interest income, realized capital gains and return of capital, and is an annualized reflection of the most recent payout. Distribution rate is a standard measure for CEFs.
** This figure includes a 4.91% baseline expense that includes management, as well as a 5.75% interest expense that will vary over time.
Charles Sizemore was long IRM, LVS and MO as of this writing.
SEE ALSO: Cheap CEFs: 7 Closed-End Funds With Unusually Low Fees
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | SEE ALSO: The 13 Best REITs to Buy in 2019 AbbVie Market value: $93.5 billion Dividend yield: 6.7% Pharmaceuticals are a tough business these days. Not surprisingly, AbbVie (ABBV, $63.50) has had a rough ride. AbbVie trades at a ridiculously cheap 6.9 times forward earnings. | SEE ALSO: The 13 Best REITs to Buy in 2019 AbbVie Market value: $93.5 billion Dividend yield: 6.7% Pharmaceuticals are a tough business these days. Not surprisingly, AbbVie (ABBV, $63.50) has had a rough ride. AbbVie trades at a ridiculously cheap 6.9 times forward earnings. | SEE ALSO: The 13 Best REITs to Buy in 2019 AbbVie Market value: $93.5 billion Dividend yield: 6.7% Pharmaceuticals are a tough business these days. Not surprisingly, AbbVie (ABBV, $63.50) has had a rough ride. AbbVie trades at a ridiculously cheap 6.9 times forward earnings. | SEE ALSO: The 13 Best REITs to Buy in 2019 AbbVie Market value: $93.5 billion Dividend yield: 6.7% Pharmaceuticals are a tough business these days. Not surprisingly, AbbVie (ABBV, $63.50) has had a rough ride. AbbVie trades at a ridiculously cheap 6.9 times forward earnings. |
24906.0 | 2019-08-14 00:00:00 UTC | Oversold Conditions For AbbVie (ABBV) | ABBV | https://www.nasdaq.com/articles/oversold-conditions-for-abbvie-abbv-2019-08-14 | nan | nan | Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Wednesday, shares of AbbVie Inc (Symbol: ABBV) entered into oversold territory, hitting an RSI reading of 29.0, after changing hands as low as $63.50 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 39.0. A bullish investor could look at ABBV's 29.0 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABBV shares:
Looking at the chart above, ABBV's low point in its 52 week range is $63.31 per share, with $100.23 as the 52 week high point — that compares with a last trade of $63.50.
Find out what 9 other oversold stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Wednesday, shares of AbbVie Inc (Symbol: ABBV) entered into oversold territory, hitting an RSI reading of 29.0, after changing hands as low as $63.50 per share. A bullish investor could look at ABBV's 29.0 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABBV shares: Looking at the chart above, ABBV's low point in its 52 week range is $63.31 per share, with $100.23 as the 52 week high point — that compares with a last trade of $63.50. | A bullish investor could look at ABBV's 29.0 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABBV shares: Looking at the chart above, ABBV's low point in its 52 week range is $63.31 per share, with $100.23 as the 52 week high point — that compares with a last trade of $63.50. In trading on Wednesday, shares of AbbVie Inc (Symbol: ABBV) entered into oversold territory, hitting an RSI reading of 29.0, after changing hands as low as $63.50 per share. | In trading on Wednesday, shares of AbbVie Inc (Symbol: ABBV) entered into oversold territory, hitting an RSI reading of 29.0, after changing hands as low as $63.50 per share. A bullish investor could look at ABBV's 29.0 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABBV shares: Looking at the chart above, ABBV's low point in its 52 week range is $63.31 per share, with $100.23 as the 52 week high point — that compares with a last trade of $63.50. | In trading on Wednesday, shares of AbbVie Inc (Symbol: ABBV) entered into oversold territory, hitting an RSI reading of 29.0, after changing hands as low as $63.50 per share. A bullish investor could look at ABBV's 29.0 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABBV shares: Looking at the chart above, ABBV's low point in its 52 week range is $63.31 per share, with $100.23 as the 52 week high point — that compares with a last trade of $63.50. |
24907.0 | 2019-08-13 00:00:00 UTC | 5 Biggest New Drugs Approved in 2019 So Far | ABBV | https://www.nasdaq.com/articles/5-biggest-new-drugs-approved-in-2019-so-far-2019-08-13 | nan | nan | Biopharmaceutical investors like blockbuster drugs. And so far in 2019, there have been several new drugs to enter the market that hold the potential to generate $1 billion or more in annual sales over the next few years.
Market researcher EvaluatePharma recently issued its half-year report that ranked the biggest new drugs approved by the U.S. Food and Drug Administration (FDA) year to date. AbbVie (NYSE: ABBV), Johnson & Johnson (NYSE: JNJ), Novartis (NYSE: NVS), and Pfizer (NYSE: PFE) each claimed at least one drug on the list. Here are the five biggest new drugs approved in 2019 so far.
Image source: Getty Images.
1. Skyrizi
AbbVie's Skyrizi landed at No. 1 on EvaluatePharma's ranking. The drug won FDA approval in April for treating plaque psoriasis. AbbVie launched the drug in May with a list price of $59,000.
EvaluatePharma projects that Skyrizi will generate annual sales of $3.2 billion by 2024. AbbVie has even higher hopes, predicting the drug could achieve peak annual sales of $5 billion. The competition in the psoriasis market is fierce, though. The safer bet is on a more conservative estimate for Skyrizi.
2. Vyndaqel
Pfizer tried -- and failed -- to win FDA approval for Vyndaqel in treating rare genetic disease transthyretin familial amyloid polyneuropathy (TTR-FAP) back in 2012. But the big drugmaker didn't give up on the drug. Pfizer announced overwhelmingly positive results for Vyndaqel last year in treating heart disease caused by TTR amyloidosis. The company's persistence paid off with an FDA approval in the indication in May 2019.
Vyndaqel has been approved in Europe since 2011 in treat TTR-FAP, but it hasn't been a huge commercial success. U.S. approval of the drug should create a different story for Pfizer, though. EvaluatePharma expects Vyndaqel will rake in $2.1 billion by 2024.
3. Zolgensma
Novartis paid $8.7 billion last year to acquire AveXis. That deal brought spinal muscular atrophy (SMA) drug Zolgensma into Novartis' pipeline. The FDA approved the gene therapy in May 2019.
Zolgensma has already been highly controversial. Novartis set the price tag for the gene therapy at a whopping $2.1 million, making Zolgensma the most expensive drug ever. Also, the FDA recently revealed that Novartis used falsified preclinical data in its application package for the drug. Despite the controversies, EvaluatePharma is bullish about Zolgensma's market potential: It pegs the gene therapy's 2024 sales at nearly $1.6 billion.
4. Mayzent
Novartis also claims another new drug in the top five. Mayzent won FDA approval in March, becoming the first oral drug to treat secondary progressive multiple sclerosis (SPMS) patients with active disease.
EvaluatePharma projects that Mayzent could pull in $1.3 billion annually by 2024. Novartis CEO Vasant Narasimhan stated in the big drugmaker's Q2 conference call in July that the drug was off to a great start. Narasimhan said his company believes that Mayzent is "the first choice now for active SPMS for healthcare providers in the United States."
5. Balversa
Johnson & Johnson's Balversa ranked at No. 5 on EvaluatePharma's list of the biggest new drugs approved so far this year. The FDA gave a thumbs-up to the drug in April for treating advanced or metastatic bladder cancer.
Balversa's approval marks another advance for personalized medicine, also known as precision medicine. While there have been other precision medicine therapies approved for other types of cancer, J&J's drug was the first to win FDA approval in bladder cancer. EvaluatePharma thinks that Balversa could make nearly $1.2 billion by 2024.
Which drugmaker is helped the most?
You might think that Novartis would feel the biggest impact of these drugmakers, considering that it landed two drugs in the top five ranking. There's no question that Zolgensma and Mayzent should make a big difference for the Swiss pharma company.
However, AbbVie arguably will be helped the most by its new drug. If Skyrizi racks up annual sales of $3.2 billion within the next five years as EvaluatePharma projects, the drug's sales would represent nearly 10% of AbbVie's 2018 revenue. With the company's top-selling drug, Humira, facing biosimilar competition in Europe, Skyrizi is critical for AbbVie's success.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE: ABBV), Johnson & Johnson (NYSE: JNJ), Novartis (NYSE: NVS), and Pfizer (NYSE: PFE) each claimed at least one drug on the list. Skyrizi AbbVie's Skyrizi landed at No. AbbVie launched the drug in May with a list price of $59,000. | AbbVie (NYSE: ABBV), Johnson & Johnson (NYSE: JNJ), Novartis (NYSE: NVS), and Pfizer (NYSE: PFE) each claimed at least one drug on the list. Skyrizi AbbVie's Skyrizi landed at No. AbbVie launched the drug in May with a list price of $59,000. | AbbVie (NYSE: ABBV), Johnson & Johnson (NYSE: JNJ), Novartis (NYSE: NVS), and Pfizer (NYSE: PFE) each claimed at least one drug on the list. If Skyrizi racks up annual sales of $3.2 billion within the next five years as EvaluatePharma projects, the drug's sales would represent nearly 10% of AbbVie's 2018 revenue. Skyrizi AbbVie's Skyrizi landed at No. | * David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and AbbVie wasn't one of them! AbbVie (NYSE: ABBV), Johnson & Johnson (NYSE: JNJ), Novartis (NYSE: NVS), and Pfizer (NYSE: PFE) each claimed at least one drug on the list. Skyrizi AbbVie's Skyrizi landed at No. |
24908.0 | 2019-08-12 00:00:00 UTC | SDY, AMCA: Big ETF Outflows | ABBV | https://www.nasdaq.com/articles/sdy-amca%3A-big-etf-outflows-2019-08-12 | nan | nan | Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR S&P Dividend ETF (SDY), where 13,200,000 units were destroyed, or a 6.7% decrease week over week. Among the largest underlying components of SDY, in morning trading today AT&T (T) is off about 0.1%, and Abbvie (ABBV) is lower by about 0.8%.
And on a percentage change basis, the ETF with the biggest outflow was the iShares Russell 1000 Pure U.S. Revenue ETF (AMCA), which lost 150,000 of its units, representing a 37.5% decline in outstanding units compared to the week prior. Among the largest underlying components of AMCA, in morning trading today AT&T (T) is down about 0.1%, and UnitedHealth Group (UNH) is lower by about 0.6%.
VIDEO: SDY, AMCA: Big ETF Outflows
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of SDY, in morning trading today AT&T (T) is off about 0.1%, and Abbvie (ABBV) is lower by about 0.8%. And on a percentage change basis, the ETF with the biggest outflow was the iShares Russell 1000 Pure U.S. Revenue ETF (AMCA), which lost 150,000 of its units, representing a 37.5% decline in outstanding units compared to the week prior. Among the largest underlying components of AMCA, in morning trading today AT&T (T) is down about 0.1%, and UnitedHealth Group (UNH) is lower by about 0.6%. | Among the largest underlying components of SDY, in morning trading today AT&T (T) is off about 0.1%, and Abbvie (ABBV) is lower by about 0.8%. Among the largest underlying components of AMCA, in morning trading today AT&T (T) is down about 0.1%, and UnitedHealth Group (UNH) is lower by about 0.6%. VIDEO: SDY, AMCA: Big ETF Outflows The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of SDY, in morning trading today AT&T (T) is off about 0.1%, and Abbvie (ABBV) is lower by about 0.8%. Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR S&P Dividend ETF (SDY), where 13,200,000 units were destroyed, or a 6.7% decrease week over week. And on a percentage change basis, the ETF with the biggest outflow was the iShares Russell 1000 Pure U.S. Revenue ETF (AMCA), which lost 150,000 of its units, representing a 37.5% decline in outstanding units compared to the week prior. | Among the largest underlying components of SDY, in morning trading today AT&T (T) is off about 0.1%, and Abbvie (ABBV) is lower by about 0.8%. Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR S&P Dividend ETF (SDY), where 13,200,000 units were destroyed, or a 6.7% decrease week over week. And on a percentage change basis, the ETF with the biggest outflow was the iShares Russell 1000 Pure U.S. Revenue ETF (AMCA), which lost 150,000 of its units, representing a 37.5% decline in outstanding units compared to the week prior. |
24909.0 | 2019-08-12 00:00:00 UTC | 10 Medical Marijuana Stocks to Cure Your Portfolio | ABBV | https://www.nasdaq.com/articles/10-medical-marijuana-stocks-to-cure-your-portfolio-2019-08-12 | nan | nan | Editor’s note: This story was previously published in April 2019. It has since been updated and republished.
Invariably, no other investment class generates as much interest and controversy as marijuana stocks. Within a generation, toward legalization shifted dramatically from strongly opposed to mostly supportive. This is largely due to demographics, as the more progressive millennials replace older Americans in positions of influence.
Additionally, marijuana stocks represent a viable economic channel that can help bridge the gap for many states’ financial issues. For instance, green-friendly enjoys significant tax revenues from its botanical industry. I don’t see this trend changing for the worse anytime soon, as awareness and popularity is only increasing.
Of course, cannabis isn’t without its controversies. Primarily, the federal government classifies marijuana as a Schedule I drug, putting it on par with hardcore narcotics like cocaine. Thus, no matter how liberal some states become toward their agricultural ambitions, the specter of federal oversight and crackdowns keeps many entrepreneurs and businesses away.
However, we have one critical exception to the rule: marijuana stocks that specialize in medicinal and therapeutic benefits. For one thing, medical cannabis mitigates the stereotypical image of potheads and general no-gooders. Plus, people experiment with pharmaceuticals all the time. Why not allow these same patients the choice for natural alternatives?
More critically for marijuana stocks, the medicinal aspect offers the best chance for international acceptance. Currently, very few jurisdictions allow recreational weed. Given the abundance of traditional and conservative nations, a green world is unlikely. But as Thailand and South Korea demonstrated, medical cannabis is a much .
As a result, you want exposure not just to marijuana stocks, but also to the therapeutic element. Here are 10 names to consider:
AbbVie (ABBV)
Whenever you have a discussion about cannabis stocks, chances are, AbbVie (NYSE:) isn’t the first name you think about. One of the healthcare sector’s blue chips, ABBV stock has soared on its vast therapeutic pipeline. We’re talking mainstream solutions for common ailments and diseases like arthritis and plaque psoriasis.
Source: Shutterstock
Still, AbbVie maintains some botanical credibility with its Marinol therapy. A synthetic cannabis-based drug, Marinol addresses chemotherapy-related side effects, such as vomiting or nausea. In addition, it helps restore appetite among AIDS patients.
Of course, you should note that Marinol isn’t among AbbVie’s top-selling products. Therefore, you’re only getting limited exposure to cannabis with ABBV stock. But based on the extreme volatility of marijuana stocks, that isn’t such a bad gig.
Emerald Health Therapeutics (EMHTF)
Not that I would know, but growing cannabis allegedly isn’t rocket science. With the right conditions, the right equipment and a reasonable car, anyone can grow their stash. But cultivating the plant so that it addresses specific ailments and symptoms? That takes real effort, which is where Emerald Health Therapeutics (OTCMKTS:) comes in.
Source: Shutterstock
Rather than just pumping out the green stuff, Emerald deliberately seeks out the strains most effective in addressing patients’ needs. The company provides a wide of strains, which range in weight, tetrahydrocannabinol (THC) content, and cannabidiol (CBD) strength. Their impressive portfolio should lift EMHTF stock over the long run, as interest in CBD products accelerates.
It’s important to be careful with pot stocks, though. On a year-to-date basis, EMHTF stock is down nearly 40%. While all cannabis stocks suffer volatility risk, Emerald’s concentration on medicinal weed should help mitigate downside pressure.
Aurora Cannabis (ACB)
I’ve spent a lot of time discussing Aurora Cannabis (NYSE:), and I don’t mean to keep double-dipping into this company. Still, I keep going back for a reason: ACB stock is an excellent play within the medical-marijuana market.
A key factor in my bullishness for Aurora is its management team. In my view, they’re making smart decisions through their acquisitive strategy.
Rather than merely focusing on outright capacity, they’re looking out over the horizon. Aurora’s buyout of Whistler Medical Marijuana gave the organization significant leverage in medical cannabis due to Whistler’s extensive .
Furthermore, ACB stock is a strong performer. Since the January opener, shares have skyrocketed roughly 70% before plummeting but still has added 24% this year. The inevitable correction should be only temporary. Among marijuana stocks, Aurora is exceptionally well-positioned for sustainable growth.
Cronos Group (CRON)
One of the top names among major marijuana stocks, Cronos Group (NASDAQ:) naturally attracts a lot of attention. This time, though, they’re attracting the wrong kind.
Source: Shutterstock
Prior to its earnings report for the second quarter, I worried about the company’s .
Hit or exceed it, and management can stave off criticism, but speculators looking for a discounted price may want to put CRON stock back on their radar. Since the beginning of March, Cronos has shed more than 28%. However, the magnitude of volatility has declined noticeably in the past few days.
Plus, Cronos has international legitimacy among medicinally focused cannabis stocks. Featuring partnerships and joint ventures across five continents, the company is ahead of the game.
CannTrust (CTST)
In business, even the green kind, you can’t get ahead of yourself. So while lucrative opportunities exist in the international sector, CannTrust (NYSE:) remains firmly committed to winning its native Canadian market.
At the same time, CannTrust can’t afford to ignore the rest of the world. Although Canada becoming the first to legalize recreational weed generated headlines, our northern neighbors alone can’t support this burgeoning industry.
Therefore, management has focused on the growth and capacity narrative to compete effectively at home and, later, abroad.
To achieve the second leg of this journey, CannTrust teamed up with Denmark’s to distribute medical cannabis products in that country.
It also inked a partnership with an Australian firm for similar distribution arrangements. While it’s not the most common name among marijuana stocks, CTST stock provides a risky, but viable, opportunity.
Innovative Industrial Properties (IIPR)
Most marijuana stocks focus on the industry’s front face; namely, production. As I mentioned earlier, marijuana isn’t that difficult to grow. So long as you have the green light legally, the physical barrier to entry is relatively short.
But the real challenge, though, is finding a consistent source of financing. This is where Innovative Industrial Properties (NYSE:) lends a helping hand.
Despite momentum toward legalization, several financial institutions shy away from cannabis ventures.
Innovative Industrial plugs the gap, offering critical capital through its leaseback business model.
Thanks to the company’s tremendous utility, IIPR stock has lit up the markets. Shares are currently up 123% YTD. Technically, IIPR may have gotten a bit overheated. That said, I wouldn’t get too greedy looking for the perfect entry point. Innovative Industrial levers a proven business model that is only increasing in relevancy.
Terra Tech (TRTC)
Everyone recognizes cannabis stocks for two things: their incredible potential and their equally incredible volatility. Unfortunately, stakeholders of medical-cannabis producer Terra Tech (OTCMKTS:) find themselves in the latter category.
So far this year, TRTC stock is down around 35%.
And the bad news doesn’t end there. Unlike many other marijuana stocks, Terra Tech has had trouble generating top-line growth.
In its most recent earnings report for the second quarter, 2019 the. After two consecutive down quarters, this could signal that TRTC is redeemable.
So why take a bet on TRTC stock? First, its vertically integrated organization may facilitate significant efficiencies as political momentum increases. Second, I dig their leadership team. The head execs are experts in finance, which should prove beneficial in properly navigating TRTC across choppy waters.
Charlotte’s Web (CWBHF)
When most people look at Charlotte’s Web (OTCMKTS:), they’re thinking that they missed the boat. After all, CWBHF stock has jumped 78% since the beginning of this year.
Source: Shutterstock
From the opening price of April, Charlotte’s Web shares gained a ridiculous 16%.
As much as I love marijuana stocks, I’m fairly certain that this cannabis firm is due for a pullback. But once that occurs, I wouldn’t waste too much time squabbling over the granularity.
Instead, I’d consider what our own Matt McCall had to say. Thanks to the popularity of CBD, Charlotte’s Web’s CBD-based products could be distributed across channels.
Unquestionably, such an event would launch CWBHF stock into the stratosphere. Moreover, because most CBD products contain no trace of THC, they don’t fall under severe federal guidelines. Therefore, don’t get too greedy looking for an ideal price point when CWBHF corrects.
Cannabis Science (CBIS)
On paper, Cannabis Science (OTCMKTS:) represents the next evolution among cannabis stocks: pharmaceutical firms that devote their time and research exclusively toward medical marijuana.
Not only that, this is a much-needed development that could lift CBIS stock, as well as the entire botanical industry.
For decades, people unquestionably trusted the mainstream healthcare and pharmaceutical network.
However, the rapidly escalating has proven that well-intentioned medical professionals can lever a tragic impact. One of the underlying causes of this crisis is the addictiveness of prescribed medicines.
Organizations like Cannabis Science can potentially mitigate this situation with naturally sourced therapies free of psychoactive side-effects. That’s the allure for CBIS stock. However, shares trade for less than .03 cents a pop, so this is only for the risk-tolerant.
GW Pharmaceuticals (GWPRF)
On a surface level, GW Pharmaceuticals (OTCMKTS:) brings a lot of positives to the table. As pioneers among medicinally-concentrated marijuana stocks, they lever substantial credibility.
Source: Shutterstock
Their drug for addressing symptoms associated with multiple sclerosis achieved better-than-expected results. This only encourages other companies to pursue cannabis-based therapies for many other diseases.
That’s the good news. The not-so-pleasant side of the coin, though, is market performance. While no one mistakes cannabis stocks as stable investment platforms, GWPRF stock is rough for even hardened botanical veterans.
In December of last year, shares fell off a cliff before rebounding back toward low-earth orbit. Since then, it has added 69% so it’s a really volatile stock.
So is GWPRF stock worth a look now? Although I like how the company has stabilized, I don’t care for its low volume. But GW Pharmaceuticals is a penny stock with underappreciated talents. If you have the nerve and the patience, it’s worth your consideration.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Here are 10 names to consider: AbbVie (ABBV) Whenever you have a discussion about cannabis stocks, chances are, AbbVie (NYSE:) isn’t the first name you think about. One of the healthcare sector’s blue chips, ABBV stock has soared on its vast therapeutic pipeline. Source: Shutterstock Still, AbbVie maintains some botanical credibility with its Marinol therapy. | Here are 10 names to consider: AbbVie (ABBV) Whenever you have a discussion about cannabis stocks, chances are, AbbVie (NYSE:) isn’t the first name you think about. One of the healthcare sector’s blue chips, ABBV stock has soared on its vast therapeutic pipeline. Source: Shutterstock Still, AbbVie maintains some botanical credibility with its Marinol therapy. | Here are 10 names to consider: AbbVie (ABBV) Whenever you have a discussion about cannabis stocks, chances are, AbbVie (NYSE:) isn’t the first name you think about. One of the healthcare sector’s blue chips, ABBV stock has soared on its vast therapeutic pipeline. Source: Shutterstock Still, AbbVie maintains some botanical credibility with its Marinol therapy. | Here are 10 names to consider: AbbVie (ABBV) Whenever you have a discussion about cannabis stocks, chances are, AbbVie (NYSE:) isn’t the first name you think about. One of the healthcare sector’s blue chips, ABBV stock has soared on its vast therapeutic pipeline. Source: Shutterstock Still, AbbVie maintains some botanical credibility with its Marinol therapy. |
24910.0 | 2019-08-11 00:00:00 UTC | 3 Embarrassingly Cheap Dividend Stocks | ABBV | https://www.nasdaq.com/articles/3-embarrassingly-cheap-dividend-stocks-2019-08-11 | nan | nan | What's better than a stock that pays you to own it? How about a stock that pays you to own it and is also really cheap?
Many investors, especially retirees, love dividend stocks because they pay out dividends on a regular basis. Some dividend stocks can be quite pricey because investors like them so much. But not all of them. Three dividend stocks appear to be embarrassingly cheap right now: AbbVie (NYSE: ABBV), CVS Health (NYSE: CVS), and Gilead Sciences (NASDAQ: GILD).
Image source: Getty Images.
1. AbbVie
AbbVie pays a mouthwatering dividend yield of nearly 6.6%. The big pharma stock is also dirt cheap right now, with shares trading at less than seven times expected earnings. Is there a catch with AbbVie? Of course.
Investors are worried about declining sales for Humira, with the drug already facing biosimilar competition in Europe and on the way for the U.S. market by 2023. Humira currently generates around 58% of AbbVie's total revenue.
However, AbbVie's planned acquisition of Allergan will significantly reduce its dependence on Humira. Even better, the company has several current drugs and pipeline candidates that should help offset the declining sales for Humira.
AbbVie's cancer drugs Imbruvica and Venclexta continue to enjoy strong momentum. Orilissa should become a blockbuster success in treating endometriosis and uterine fibroids. New immunology drugs Skyrizi and upadacitinib are also likely to generate billions of dollars in additional sales over the next few years.
2. CVS Health
CVS Health's dividend yield currently stands at 3.61%, a level that would catch any income-oriented investor's eye. The healthcare giant could also be viewed as a bargain, with its shares trading at a little over eight times expected earnings.
There are a couple of reasons behind CVS Health's low valuation. Many were skeptical about the company's acquisition of Aetna last year. With several presidential candidates advocating changes that would negatively impact the health insurance industry, doubts about the wisdom of the Aetna deal have intensified.
In addition, some investors continue to be worried about the potential threat that Amazon might pose to pharmacy retailers. The e-commerce leader's acquisition of online pharmacy PillPack signaled that it's serious about trying to disrupt the pharmacy market as it has other areas.
So far, though, CVS Health has been rocking along. The company recently announced second-quarter results that were much better than expected and raised its outlook for full-year 2019.
3. Gilead Sciences
Gilead Sciences is something of a rarity: a biotech that pays a dividend. The company's dividend yields 3.85%. Its stock is also attractively valued, with shares trading at eight times expected earnings.
The story for Gilead over the last couple of years or so has centered around the sinking sales for its hepatitis C virus (HCV) drug franchise. Gilead's revenue and earnings fell quarter after quarter, as the biotech faced increasing competition in the HCV market and fewer patients were available because so many have been cured of hepatitis C thanks in large part to Gilead's drugs.
Now, however, Gilead appears to have turned a new page. The biotech returned to revenue growth in the first quarter of 2019 and continued its momentum in Q2. Gilead's resurgence has been powered primarily by its blockbuster HIV drug, Biktarvy.
The company could soon enter a new market. Gilead plans to file for approval for filgotinib in treating rheumatoid arthritis later this year. It's also seeking to expand its dominance in HIV and boost its oncology presence.
Two downsides to these bargain dividend stocks
AbbVie, CVS Health, and Gilead offer high dividend yields and are inexpensive relative to most stocks on the market. However, each stock also comes with a couple of big downsides.
First, none of these stocks is likely to deliver huge earnings growth in the near future. Wall Street analysts project low double-digit-percentage earnings growth over the next five years for all three stocks.
Second, each stock faces significant risks. AbbVie is embarking on its biggest acquisition ever, and it doesn't have a great track record overall when it comes to dealmaking. Both AbbVie and Gilead face stiff competition and the possibility that their pipeline candidates won't be successful. CVS Health is in the midst of integrating Aetna at a time of considerable uncertainty for pharmacy retailers and health insurers.
High-dividend yields and bargain share prices usually can't be obtained with sizzling earnings growth and low risk. Investors must be willing to accept those trade-offs before buying AbbVie, CVS Health, or Gilead Sciences.
10 stocks we like better than Gilead Sciences
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David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Gilead Sciences wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights owns shares of AbbVie and Gilead Sciences. The Motley Fool owns shares of and recommends Amazon and Gilead Sciences. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Three dividend stocks appear to be embarrassingly cheap right now: AbbVie (NYSE: ABBV), CVS Health (NYSE: CVS), and Gilead Sciences (NASDAQ: GILD). AbbVie AbbVie pays a mouthwatering dividend yield of nearly 6.6%. Is there a catch with AbbVie? | Three dividend stocks appear to be embarrassingly cheap right now: AbbVie (NYSE: ABBV), CVS Health (NYSE: CVS), and Gilead Sciences (NASDAQ: GILD). Two downsides to these bargain dividend stocks AbbVie, CVS Health, and Gilead offer high dividend yields and are inexpensive relative to most stocks on the market. AbbVie AbbVie pays a mouthwatering dividend yield of nearly 6.6%. | Three dividend stocks appear to be embarrassingly cheap right now: AbbVie (NYSE: ABBV), CVS Health (NYSE: CVS), and Gilead Sciences (NASDAQ: GILD). Two downsides to these bargain dividend stocks AbbVie, CVS Health, and Gilead offer high dividend yields and are inexpensive relative to most stocks on the market. AbbVie AbbVie pays a mouthwatering dividend yield of nearly 6.6%. | Investors must be willing to accept those trade-offs before buying AbbVie, CVS Health, or Gilead Sciences. Three dividend stocks appear to be embarrassingly cheap right now: AbbVie (NYSE: ABBV), CVS Health (NYSE: CVS), and Gilead Sciences (NASDAQ: GILD). AbbVie AbbVie pays a mouthwatering dividend yield of nearly 6.6%. |
24911.0 | 2019-08-11 00:00:00 UTC | 3 Top Stocks With High Dividend Yields | ABBV | https://www.nasdaq.com/articles/3-top-stocks-with-high-dividend-yields-2019-08-11 | nan | nan | For dividend stocks, yield is king. But there are other considerations investors should be aware of before scanning the stock market for high-yielding companies. Quality of yield is important, for instance, but so are a company's prospects. A high yield, after all, may not mean much if the stock itself is about to tank.
With this in mind, we asked three of our Motley Fool contributors for their recommendations of high-yielding stocks with solid prospects. They came back with Philip Morris International (NYSE: PM), BP (NYSE: BP), and AbbVie (NYSE: ABBV). Here's why they think these dividend stocks are good buys right now.
High-yielding dividend stocks can be found across many industries. Image source: Getty Images.
A classic tobacco play with a low valuation and a high yield
Leo Sun (Philip Morris International): Philip Morris International was spun off from Altria (NYSE: MO) 11 years ago. PMI subsequently generated all of its revenue overseas, while Altria stayed in the United States. The spinoff allowed PMI to tap into higher-growth overseas markets with higher smoking rates than the U.S., but it also exposed it to tough currency headwinds and unpredictable regional challenges.
Yet PMI continued to grow as it raised prices to offset lower shipments, expanded into fresh markets such as heated tobacco products, and rewarded shareholders by increasing its dividend every year since its split with Altria.
PMI now pays a forward dividend yield of 5.5%, compared with the average S&P yield of 1.9%. That payout will account for about 89% of its adjusted EPS forecast for the year -- a bit high, but easily sustainable.
PMI's revenue rose annually across all of its global regions, except Latin America and Canada, on a constant currency basis last quarter. It offset its 3.6% decline in global cigarette shipments with price increases and the expansion of its iQOS heated tobacco business -- which grew its shipments 37% annually. Its operating margin also expanded as it cut costs.
PMI expects its adjusted EPS to grow 9% this year on a constant currency basis, and it trades at less than 15 times forward earnings. That stable growth rate, low multiple, and high yield should set a floor under PMI's stock if the broader market tumbles.
Bucking the trend in oil
John Bromels (BP): Oil and gas giant BP has long offered one of the highest dividend yields among the oil majors, and earlier this year it managed to wrest the mantle of highest yield in Big Oil from rival Royal Dutch Shell. But after a rare earnings miss in Q2, Shell's share price tumbled, which bumped its dividend yield just high enough to retake the crown from BP, with a 6.57% yield compared with BP's 6.56%.
Of course, the difference of a hundredth of 1% is hardly worth noting. What is worth noting is that BP managed to post an earnings beat in Q2, thanks to higher liquids production, higher sequential refining margins, and lower exploration write-offs than in the prior quarter. BP is also continuing its share buyback program, repurchasing $125 million worth of shares in the first half of 2019, with more likely to come later in the year. These are all things that should make shareholders smile.
In spite of the earnings beat, though, BP's shares are down 3.9% since the announcement, possibly because of management's expectation that upstream production will be lower in Q3 as a result of seasonal turnaround, maintenance activities, and disruption caused by Hurricane Barry. The company also predicted that lower margins would hurt its refining business. However, management maintained its 2019 full-year guidance, indicating these problems shouldn't have too big of an impact on the company's bottom line.
With its juicy yield, a shareholder-friendly management, and recent outperformance compared with its peers, BP is a top pick for investors looking to add some oil and gas exposure to a balanced portfolio.
This big pharma is a big bargain
Keith Speights (AbbVie): You might think that a stock that pays a 6.5% dividend yield would have horrible growth prospects. But that's not the case for AbbVie.
Sure, the company's top-selling drug, Humira, faces competition from biosimilars in Europe. Total sales for Humira slipped 6.1% year over year in the second quarter as a result of this challenge. However, Humira is on track to rank as one of the best-selling drugs in the world at least through 2024. Biosimilars hit the U.S. market beginning in 2023.
In the meantime, AbbVie has plenty of arrows in its quiver to offset the declining sales for Humira. Blood cancer drugs Imbruvica and Venclexta continue to gain impressive momentum. AbbVie expects Orilissa to be a blockbuster in treating endometriosis pain and uterine fibroids. Recently approved psoriasis drug Skyrizi should achieve peak annual sales of at least $3 billion, according to analysts, although AbbVie projects peak sales of $5 billion.
There's an even bigger potential blockbuster waiting in the wings. AbbVie expects FDA approval of rheumatoid arthritis drug upadacitinib within the next couple of months. The drugmaker expects peak sales of $6.5 billion for upadacitinib.
AbbVie also plans to close on its pending acquisition of Allergan (NYSE: AGN) by early 2020. Although there has been some skepticism about the deal, it definitely reduces AbbVie's dependence on Humira and diversifies its product lineup considerably.
The big pharma company's shares currently trade at less than 7 times expected earnings. I expect AbbVie to deliver average annual earnings growth in the mid-single digits. With its attractive dividend and modest earnings growth potential, AbbVie looks like a bargain.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | They came back with Philip Morris International (NYSE: PM), BP (NYSE: BP), and AbbVie (NYSE: ABBV). This big pharma is a big bargain Keith Speights (AbbVie): You might think that a stock that pays a 6.5% dividend yield would have horrible growth prospects. But that's not the case for AbbVie. | They came back with Philip Morris International (NYSE: PM), BP (NYSE: BP), and AbbVie (NYSE: ABBV). This big pharma is a big bargain Keith Speights (AbbVie): You might think that a stock that pays a 6.5% dividend yield would have horrible growth prospects. But that's not the case for AbbVie. | This big pharma is a big bargain Keith Speights (AbbVie): You might think that a stock that pays a 6.5% dividend yield would have horrible growth prospects. They came back with Philip Morris International (NYSE: PM), BP (NYSE: BP), and AbbVie (NYSE: ABBV). But that's not the case for AbbVie. | This big pharma is a big bargain Keith Speights (AbbVie): You might think that a stock that pays a 6.5% dividend yield would have horrible growth prospects. They came back with Philip Morris International (NYSE: PM), BP (NYSE: BP), and AbbVie (NYSE: ABBV). But that's not the case for AbbVie. |
24912.0 | 2019-08-06 00:00:00 UTC | Allergan Boosts 2019 Guidance While Waiting to be Acquired by AbbVie | ABBV | https://www.nasdaq.com/articles/allergan-boosts-2019-guidance-while-waiting-to-be-acquired-by-abbvie-2019-08-06 | nan | nan | It's been an eventful year for Allergan (NYSE: AGN). That's to be expected, with AbbVie announcing in June that it plans to acquire the drugmaker for $63 billion.
Allergan added another twist to its eventful 2019 when it announced its second-quarter results before the market opened on Tuesday. Here's what you need to know from the Q2 update.
Image source: Getty Images.
By the numbers
Allergan announced Q2 revenue of $4.09 billion, a slight decline from the $4.12 billion in the year-ago quarter. But revenue was still higher than the average analysts' estimate of $3.94 billion.
The drugmaker announced a net loss in the second quarter of $5.37 per share under generally accepted accounting principles (GAAP). This represented significant deterioration from the net loss of $1.39 per share in the year-ago quarter.
On the other hand, the bottom line looked much better on a non-GAAP (adjusted) basis. The company reported Q2 adjusted net income of $4.38 per share, versus $4.42 in the prior-year period. This beat the average analysts' earnings estimate of $4.35 per share.
Behind the numbers
There were plenty of positives in the second quarter. Botox cosmetic sales increased by 6.7% year over year to $252.4 million, with therapeutic sales for the drug climbing 5.9% to $447 million. Vraylar sales soared 71.7% to $196.1 million. Viibryd/Fetzima sales jumped 24.3% year over year to $107.8 million. Sales for Lo Loestrin increased 13.8% to $145.5 million.
But there were also quite a few weak spots in Q2. CoolSculpting sales fell 27.1% from the prior-year period to $78.9 million. Sales for Alloderm dropped 5.5% to $101.2 million. Restasis net revenue slipped 2.3% to $310.9 million.
Allergan's wider net loss was primarily driven by higher expenses. Research and development costs increased nearly 15% to $447 million on a non-GAAP basis, while selling, general, and administrative expenses rose 2.5% to $1.16 billion. The company attributed the increases to higher direct-project spending related to product launches.
There were also several milestones in the second quarter:
Food and Drug Administration approval for the expanded use of Vraylar in treating depressive episodes associated with bipolar 1 disorder in adults.
FDA approval of Botox in treating pediatric patients 2 years and older with upper limb spasticity.
FDA clearance for the CoolTone body contouring device.
Looking ahead
Allergan now expects revenue for full-year 2019 between $15.425 billion and $15.625 billion, up from its previous guidance of $15.125 billion to $15.425 billion. The company also projected a GAAP net loss per share for full-year 2019 greater than $12.03, compared with a net loss of greater than $5.70 provided in its previous outlook. Allergan continues to anticipate non-GAAP earnings per share of at least $16.55 for the year.
Look for lots of activity on the commercialization and regulatory fronts. Allergan plans to launch CoolTone in the second half of 2019. An FDA decision on Botox in treating pediatric patients with lower limb spasticity is expected by Q4 of this year. An approval for migraine drug ubrogepant is anticipated by December 2019. Allergan also expects the FDA to approve bimatoprost sustained-release in the first half of 2020.
In addition, a European decision for abicipar in treating neovascular age-related macular degeneration is expected in the second half of 2020.
And the big development for Allergan is the pending acquisition by AbbVie. That deal is expected to close in early 2020.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | That's to be expected, with AbbVie announcing in June that it plans to acquire the drugmaker for $63 billion. And the big development for Allergan is the pending acquisition by AbbVie. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. | That's to be expected, with AbbVie announcing in June that it plans to acquire the drugmaker for $63 billion. And the big development for Allergan is the pending acquisition by AbbVie. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. | That's to be expected, with AbbVie announcing in June that it plans to acquire the drugmaker for $63 billion. And the big development for Allergan is the pending acquisition by AbbVie. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. | That's to be expected, with AbbVie announcing in June that it plans to acquire the drugmaker for $63 billion. And the big development for Allergan is the pending acquisition by AbbVie. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. |
24913.0 | 2019-08-04 00:00:00 UTC | These 5 Prescription Drugs Will Generate a Jaw-Dropping $62.3 Billion in 2024 | ABBV | https://www.nasdaq.com/articles/these-5-prescription-drugs-will-generate-a-jaw-dropping-%2462.3-billion-in-2024-2019-08-04 | nan | nan | America has a serious drug problem. Apart from the raging opioid crisis that's forecast to claim the lives of nearly half a million people over the next decade, the country is also reeling from the exorbitant costs associated with specialty medicines. By 2024, the top five best-selling medicines are projected to generate a staggering $62.3 billion in worldwide revenue, with the lion's share of these sales coming from American consumers, according to a report by EvaluatePharma.
To put this jaw-dropping figure into context, the National Football League -- which is America's most popular sport by a country mile -- has designs on growing its annual revenue to over $20 billion by 2024. Furthermore, the burgeoning U.S. cannabis market is on track to grow into a $30 billion industry by 2024. These two highly lucrative businesses combined won't come anywhere close to the stately revenue figure of big pharma's top five best-selling medicines during this period.
Image Source: Getty Images.
Which prescription drugs make this esteemed list? Here's a quick rundown of the five medicines expected to become the industry's biggest earners in the next decade.
The top five
Merck's (NYSE: MRK) cancer-fighting immunotherapy Keytruda tops this list, with a projected revenue haul of $17 billion by the end of 2024. Merck's Keytruda is also the drug with fastest pace of sales growth on this list, thanks to its ability to grab several key new indications over the prior two years.
AbbVie's (NYSE: ABBV) flagship anti-inflammatory medicine Humira is predicted to slip to second place on this list, with an estimated 2024 revenue forecast of $12.4 billion. In 2018, this drug blew away the rest of the field with a gobsmacking $19.9 billion in global sales.
Bristol-Myers Squibb (NYSE: BMY) and Pfizer's (NYSE: PFE) next-generation blood-thinner, Eliquis, is a close third, with 2024 sales expected to hit a monstrous $12 billion. Bristol and Pfizer raked in a whopping $6.4 billion from Eliquis in 2018.
Bristol's PD-1 inhibitor, Opdivo, a rival to Merck's Keytruda, is slated to generate a healthy $11.3 billion by 2024. Once upon a time, Bristol's Opdivo was widely predicted to top this list, but a major miss in advanced lung cancer opened the door for Merck's Keytruda to become the undisputed champion of the PD-1 inhibitor space.
AbbVie and Johnson & Johnson's (NYSE: JNJ) game-changing blood cancer drug Imbruvica is set to occupy fifth place, with an estimated revenue haul of $9.5 billion. Now, AbbVie and J&J's Imbruvica might ultimately slip out of the top five. There are several new drugs gunning for Imbruvica's most lucrative indications, and Pfizer's breast cancer drug Ibrance should also bring home no less than $9 billion in annual sales by 2024.
The investing picture
Even though a whopping 70% of Americans reportedly support a single-payer system like Medicare for all that would undermine the commercial prospects of these five drugs, it's highly unlikely that the U.S. healthcare system will radically alter course in the wake of the next election cycle. The pharmaceutical industry has an extremely powerful lobbying presence in Washington D.C., which directly influences the pace and scope of legislation regulating the industry as a whole. That's the stark reality of the political landscape -- despite the growing popularity among the electorate for cost-saving measures such as hard caps on prescription drug prices or the elimination of pharmacy benefit managers.
Investors, in kind, shouldn't be overly concerned about owning any of these elite drugmakers heading into the next decade. After all, AbbVie, Bristol, J&J, Merck, and Pfizer all sport top-notch shareholder rewards programs, and their growth prospects should remain fairly healthy as well. AbbVie, for instance, currently offers a juicy 6.5% dividend yield, which is basically unheard of for a Dividend Aristocrat. So if you're on the prowl for a top-notch income and growth play, these blue-chip drugmakers are definitely worth a look.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie's (NYSE: ABBV) flagship anti-inflammatory medicine Humira is predicted to slip to second place on this list, with an estimated 2024 revenue forecast of $12.4 billion. AbbVie and Johnson & Johnson's (NYSE: JNJ) game-changing blood cancer drug Imbruvica is set to occupy fifth place, with an estimated revenue haul of $9.5 billion. Now, AbbVie and J&J's Imbruvica might ultimately slip out of the top five. | AbbVie's (NYSE: ABBV) flagship anti-inflammatory medicine Humira is predicted to slip to second place on this list, with an estimated 2024 revenue forecast of $12.4 billion. AbbVie and Johnson & Johnson's (NYSE: JNJ) game-changing blood cancer drug Imbruvica is set to occupy fifth place, with an estimated revenue haul of $9.5 billion. Now, AbbVie and J&J's Imbruvica might ultimately slip out of the top five. | AbbVie and Johnson & Johnson's (NYSE: JNJ) game-changing blood cancer drug Imbruvica is set to occupy fifth place, with an estimated revenue haul of $9.5 billion. AbbVie's (NYSE: ABBV) flagship anti-inflammatory medicine Humira is predicted to slip to second place on this list, with an estimated 2024 revenue forecast of $12.4 billion. Now, AbbVie and J&J's Imbruvica might ultimately slip out of the top five. | AbbVie's (NYSE: ABBV) flagship anti-inflammatory medicine Humira is predicted to slip to second place on this list, with an estimated 2024 revenue forecast of $12.4 billion. AbbVie and Johnson & Johnson's (NYSE: JNJ) game-changing blood cancer drug Imbruvica is set to occupy fifth place, with an estimated revenue haul of $9.5 billion. Now, AbbVie and J&J's Imbruvica might ultimately slip out of the top five. |
24914.0 | 2019-08-02 00:00:00 UTC | iShares U.S. Healthcare ETF Experiences Big Outflow | ABBV | https://www.nasdaq.com/articles/ishares-u.s.-healthcare-etf-experiences-big-outflow-2019-08-02 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares U.S. Healthcare ETF (Symbol: IYH) where we have detected an approximate $28.9 million dollar outflow -- that's a 1.4% decrease week over week (from 10,900,000 to 10,750,000). Among the largest underlying components of IYH, in trading today Amgen Inc (Symbol: AMGN) is up about 0.5%, AbbVie Inc (Symbol: ABBV) is off about 0.5%, and Anthem Inc (Symbol: ANTM) is lower by about 1.2%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average:
Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $191.60. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of IYH, in trading today Amgen Inc (Symbol: AMGN) is up about 0.5%, AbbVie Inc (Symbol: ABBV) is off about 0.5%, and Anthem Inc (Symbol: ANTM) is lower by about 1.2%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $191.60. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of IYH, in trading today Amgen Inc (Symbol: AMGN) is up about 0.5%, AbbVie Inc (Symbol: ABBV) is off about 0.5%, and Anthem Inc (Symbol: ANTM) is lower by about 1.2%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $191.60. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of IYH, in trading today Amgen Inc (Symbol: AMGN) is up about 0.5%, AbbVie Inc (Symbol: ABBV) is off about 0.5%, and Anthem Inc (Symbol: ANTM) is lower by about 1.2%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares U.S. Healthcare ETF (Symbol: IYH) where we have detected an approximate $28.9 million dollar outflow -- that's a 1.4% decrease week over week (from 10,900,000 to 10,750,000). For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $191.60. | Among the largest underlying components of IYH, in trading today Amgen Inc (Symbol: AMGN) is up about 0.5%, AbbVie Inc (Symbol: ABBV) is off about 0.5%, and Anthem Inc (Symbol: ANTM) is lower by about 1.2%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $191.60. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). |
24915.0 | 2019-08-01 00:00:00 UTC | Thursday 8/1 Insider Buying Report: ABBV, WTRE | ABBV | https://www.nasdaq.com/articles/thursday-8-1-insider-buying-report%3A-abbv-wtre-2019-08-01 | nan | nan | Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.
At AbbVie (ABBV), a filing with the SEC revealed that on Tuesday, Director Roxanne S. Austin bought 10,000 shares of ABBV, at a cost of $66.35 each, for a total investment of $663,500. AbbVie is trading up about 0.1% on the day Thursday. Before this latest buy, Austin made one other buy in the past twelve months, purchasing $776,250 shares at a cost of $67.50 each.
And at Watford Holdings (WTRE), there was insider buying on Wednesday, by Chief Executive Officer John F. Rathgeber who purchased 25,000 shares at a cost of $20.12 each, for a trade totaling $502,915. Before this latest buy, Rathgeber made one other buy in the past year, purchasing $249,278 shares at a cost of $24.93 each. Watford Holdings is trading up about 5.4% on the day Thursday.
VIDEO: Thursday 8/1 Insider Buying Report: ABBV, WTRE
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | VIDEO: Thursday 8/1 Insider Buying Report: ABBV, WTRE The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. At AbbVie (ABBV), a filing with the SEC revealed that on Tuesday, Director Roxanne S. Austin bought 10,000 shares of ABBV, at a cost of $66.35 each, for a total investment of $663,500. AbbVie is trading up about 0.1% on the day Thursday. | VIDEO: Thursday 8/1 Insider Buying Report: ABBV, WTRE The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. At AbbVie (ABBV), a filing with the SEC revealed that on Tuesday, Director Roxanne S. Austin bought 10,000 shares of ABBV, at a cost of $66.35 each, for a total investment of $663,500. AbbVie is trading up about 0.1% on the day Thursday. | At AbbVie (ABBV), a filing with the SEC revealed that on Tuesday, Director Roxanne S. Austin bought 10,000 shares of ABBV, at a cost of $66.35 each, for a total investment of $663,500. AbbVie is trading up about 0.1% on the day Thursday. VIDEO: Thursday 8/1 Insider Buying Report: ABBV, WTRE The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | At AbbVie (ABBV), a filing with the SEC revealed that on Tuesday, Director Roxanne S. Austin bought 10,000 shares of ABBV, at a cost of $66.35 each, for a total investment of $663,500. AbbVie is trading up about 0.1% on the day Thursday. VIDEO: Thursday 8/1 Insider Buying Report: ABBV, WTRE The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. |
24916.0 | 2019-07-30 00:00:00 UTC | Why Neurocrine Biosciences Stock Is Jumping Today | ABBV | https://www.nasdaq.com/articles/why-neurocrine-biosciences-stock-is-jumping-today-2019-07-30 | nan | nan | What happened
Shares of Neurocrine Biosciences (NASDAQ: NBIX) were trading almost 10% higher as of 12:20 p.m. EDT Tuesday after the biotech company announced better-than-expected second-quarter results after the market closed on Monday.
So what
One good quarter (or one bad quarter, for that matter) doesn't really mean a lot in the grand scheme of things. However, for a small biotech with its first drug on the market, an exceptionally strong quarter can significantly improve investors' confidence. That's what is happening with Neurocrine.
Image source: Getty Images.
Ingrezza, the company's tardive dyskinesia drug, is certainly outperforming expectations: Its sales in Q2 were $180.5 million, up 86% year over year. The biotech also generated slightly over $3 million in revenue from its collaborations.
Neurocrine's total revenue of $183.6 million also came in well above analysts' consensus estimate of $163.14 million. And it delivered an upside surprise with earnings of $51.3 million, or $0.54 per share. Wall Street analysts were expecting Q2 earnings of $0.11 per share.
Now what
It's certainly great news that prescriptions for Ingrezza are continuing to grow, and Neurocrine could have more wins on the way.
AbbVie plans to file this year for FDA approval of elagolix, a drug developed by Neurocrine, as a treatment for uterine fibroids. Elagolix is already approved to manage endometriosis pain, and is marketed by AbbVie under the brand name Orilissa.
Neurocrine also anticipates an FDA approval decision by April 26, 2020, on opicapone as an adjunctive therapy to levodopa/carbidopa in treating Parkinson's disease. In addition, the biotech intends to meet with FDA soon about advancing its congenital adrenal hyperplasia (CAH) drug candidate, NBI-74788, to the next phase of clinical testing. If all goes well for Neurocrine, it could have three FDA-approved treatments in four indications by the end of 2020.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie plans to file this year for FDA approval of elagolix, a drug developed by Neurocrine, as a treatment for uterine fibroids. Elagolix is already approved to manage endometriosis pain, and is marketed by AbbVie under the brand name Orilissa. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. | AbbVie plans to file this year for FDA approval of elagolix, a drug developed by Neurocrine, as a treatment for uterine fibroids. Elagolix is already approved to manage endometriosis pain, and is marketed by AbbVie under the brand name Orilissa. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. | AbbVie plans to file this year for FDA approval of elagolix, a drug developed by Neurocrine, as a treatment for uterine fibroids. Elagolix is already approved to manage endometriosis pain, and is marketed by AbbVie under the brand name Orilissa. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. | AbbVie plans to file this year for FDA approval of elagolix, a drug developed by Neurocrine, as a treatment for uterine fibroids. Elagolix is already approved to manage endometriosis pain, and is marketed by AbbVie under the brand name Orilissa. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. |
24917.0 | 2019-07-30 00:00:00 UTC | Neurocrine Biosciences Posts Sizzling Sales Growth in Q2 | ABBV | https://www.nasdaq.com/articles/neurocrine-biosciences-posts-sizzling-sales-growth-in-q2-2019-07-30 | nan | nan | Neurocrine Biosciences (NASDAQ: NBIX) shareholders should be pleased with the stock so far in 2019. The biotech's share price is up more than 30% year to date. And it reported solid revenue growth in its first-quarter results announced in April.
Anyone wondering if Neurocrine could keep the momentum going got a strong affirmative when the company announced its second-quarter results after the market closed on Monday. It again delivered a solid performance.
Image source: Getty Images.
By the numbers
Top-line performance improved significantly in the second quarter. Revenue jumped nearly 90% year over year to $183.6 million. Analysts estimated that the company's revenue for the Q2 would come in at $163.14 million.
The biopharmaceutical company reported net income under generally accepted accounting principles (GAAP) of $51.3 million, or $0.54 per share. This was a major improvement over the prior-year period when the company announced a net loss of $5.9 million, or $0.07 per share. Analysts were expecting Q2 adjusted earnings of $0.11 per share.
Neurocrine ended the second quarter with cash, cash equivalents, and short-term investments of $766.5 million as of June 30, 2019.
Behind the numbers
Most of the revenue in Q2 was generated by the tardive dyskinesia drug Ingrezza. Sales for Ingrezza jumped 86% year over year to $180.5 million. The company also reported collaboration revenue of a little over $3 million.
This sales growth for Ingrezza also drove the company's net income higher. And it benefited from a $21 million gain from its equity investment in Voyager Therapeutics.
But spending increased significantly in the second quarter. Research and development (R&D) jumped 67% year over year to $61.7 million. Part of this increase was related to the acceptance by the Food and Drug Administration of the New Drug Application for opicapone. Sales, general, and administrative (SG&A) expenses also increased 33% year over year to $80.8 million, driven primarily by the expansion of Neurocrine's sales force and other promotional efforts.
Looking ahead
Neurocrine projects that its operating expenses for full-year 2019 will be between $658 million and $688 million. Ongoing expenses for SG&A and R&D are now anticipated to be between $540 million and $570 million, lower than the company's previous guidance range of $550 million to $600 million.
The company has several pipeline developments to watch in the not-too-distant future. Its partner AbbVie should file for FDA approval of elagolix in treating uterine fibroids later this year. The FDA is scheduled to make an approval decision on opicapone as an adjunctive therapy to levodopa/carbidopa in patients with Parkinson's disease by April 26, 2020. Neurocrine also plans to talk with the FDA in the third quarter of this year about advancing its NBI-74788 program in adult patients with congenital adrenal hyperplasia.
All of this activity has CEO Kevin Gorman pretty fired up. "We are pleased with this exciting progress and remain on track to have three FDA-approved treatments in four indications by 2020," Gorman said.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Its partner AbbVie should file for FDA approval of elagolix in treating uterine fibroids later this year. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. Anyone wondering if Neurocrine could keep the momentum going got a strong affirmative when the company announced its second-quarter results after the market closed on Monday. | Its partner AbbVie should file for FDA approval of elagolix in treating uterine fibroids later this year. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. And it reported solid revenue growth in its first-quarter results announced in April. | Its partner AbbVie should file for FDA approval of elagolix in treating uterine fibroids later this year. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. Revenue jumped nearly 90% year over year to $183.6 million. | Its partner AbbVie should file for FDA approval of elagolix in treating uterine fibroids later this year. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. Revenue jumped nearly 90% year over year to $183.6 million. |
24918.0 | 2019-07-29 00:00:00 UTC | Biotech Stocks Facing FDA Decision In August 2019 | ABBV | https://www.nasdaq.com/articles/biotech-stocks-facing-fda-decision-in-august-2019-2019-07-29 | nan | nan | (RTTNews) - After having had a banner year for new drug approvals in 2018, hitting a record number of 59, it looks like the pace of FDA approval is slowing down this year. Only 16 new drugs have been greenlighted so far this year compared to 26 during the same period last year.
On July 24, 2019, the FDA approved the glucagon nasal powder Baqsimi from Eli Lilly (LLY) for patients with severe hypoglycemia. Baqsim is the first needle-free treatment for severe hypoglycemia to be given the regulatory nod.
Some of the newsworthy stories of July on the regulatory front that merit mention are the approval of the first Lyrica generics, and the FDA taking significant action to protect women from breast implant-associated anaplastic large cell lymphoma (BIA-ALCL).
On July 19, 2019, the FDA approved multiple applications for first generics of Pfizer's Lyrica for the management of neuropathic pain.
The FDA granted approvals for the generic versions of Lyrica to Alembic Pharma, Alkem Laboratories, Amneal Pharmaceuticals, Dr. Reddy's Laboratories, InvaGen Pharmaceuticals, MSN Laboratories Ltd., Rising Pharmaceuticals, Inc., Sciegen Pharmaceuticals Inc., and Teva Pharmaceuticals. Lyrica lost patent protection in June of this year. The drug, which is Pfizer's second bestseller, recorded sales of $4.6 billion in 2018.
On July 24, 2019, the FDA requested Allergan to recall specific models of its textured breast implants from the U.S. market due to the risk of breast implant-associated anaplastic large cell lymphoma. As of July 6, 2019, a total of 573 cases of breast implant-associated anaplastic large cell lymphoma and 33 patient deaths due to that cancer have been reported worldwide.
Now, let's take a look at the companies that await a ruling from the FDA in August 2019.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | On July 24, 2019, the FDA approved the glucagon nasal powder Baqsimi from Eli Lilly (LLY) for patients with severe hypoglycemia. Some of the newsworthy stories of July on the regulatory front that merit mention are the approval of the first Lyrica generics, and the FDA taking significant action to protect women from breast implant-associated anaplastic large cell lymphoma (BIA-ALCL). As of July 6, 2019, a total of 573 cases of breast implant-associated anaplastic large cell lymphoma and 33 patient deaths due to that cancer have been reported worldwide. | Some of the newsworthy stories of July on the regulatory front that merit mention are the approval of the first Lyrica generics, and the FDA taking significant action to protect women from breast implant-associated anaplastic large cell lymphoma (BIA-ALCL). On July 24, 2019, the FDA requested Allergan to recall specific models of its textured breast implants from the U.S. market due to the risk of breast implant-associated anaplastic large cell lymphoma. As of July 6, 2019, a total of 573 cases of breast implant-associated anaplastic large cell lymphoma and 33 patient deaths due to that cancer have been reported worldwide. | (RTTNews) - After having had a banner year for new drug approvals in 2018, hitting a record number of 59, it looks like the pace of FDA approval is slowing down this year. Some of the newsworthy stories of July on the regulatory front that merit mention are the approval of the first Lyrica generics, and the FDA taking significant action to protect women from breast implant-associated anaplastic large cell lymphoma (BIA-ALCL). The FDA granted approvals for the generic versions of Lyrica to Alembic Pharma, Alkem Laboratories, Amneal Pharmaceuticals, Dr. Reddy's Laboratories, InvaGen Pharmaceuticals, MSN Laboratories Ltd., Rising Pharmaceuticals, Inc., Sciegen Pharmaceuticals Inc., and Teva Pharmaceuticals. | (RTTNews) - After having had a banner year for new drug approvals in 2018, hitting a record number of 59, it looks like the pace of FDA approval is slowing down this year. Some of the newsworthy stories of July on the regulatory front that merit mention are the approval of the first Lyrica generics, and the FDA taking significant action to protect women from breast implant-associated anaplastic large cell lymphoma (BIA-ALCL). Lyrica lost patent protection in June of this year. |
24919.0 | 2019-07-29 00:00:00 UTC | Noteworthy Monday Option Activity: SYNA, ABBV, VGR | ABBV | https://www.nasdaq.com/articles/noteworthy-monday-option-activity%3A-syna-abbv-vgr-2019-07-29 | nan | nan | Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Synaptics Inc (Symbol: SYNA), where a total of 2,466 contracts have traded so far, representing approximately 246,600 underlying shares. That amounts to about 47.1% of SYNA's average daily trading volume over the past month of 523,280 shares. Especially high volume was seen for the $35 strike call option expiring September 20, 2019, with 1,010 contracts trading so far today, representing approximately 101,000 underlying shares of SYNA. Below is a chart showing SYNA's trailing twelve month trading history, with the $35 strike highlighted in orange:
AbbVie Inc (Symbol: ABBV) saw options trading volume of 55,778 contracts, representing approximately 5.6 million underlying shares or approximately 47% of ABBV's average daily trading volume over the past month, of 11.9 million shares. Especially high volume was seen for the $70 strike call option expiring September 20, 2019, with 15,274 contracts trading so far today, representing approximately 1.5 million underlying shares of ABBV. Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange:
And Vector Group Ltd (Symbol: VGR) saw options trading volume of 6,240 contracts, representing approximately 624,000 underlying shares or approximately 46.8% of VGR's average daily trading volume over the past month, of 1.3 million shares. Especially high volume was seen for the $12.50 strike call option expiring August 16, 2019, with 5,149 contracts trading so far today, representing approximately 514,900 underlying shares of VGR. Below is a chart showing VGR's trailing twelve month trading history, with the $12.50 strike highlighted in orange:
For the various different available expirations for SYNA options, ABBV options, or VGR options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $70 strike call option expiring September 20, 2019, with 15,274 contracts trading so far today, representing approximately 1.5 million underlying shares of ABBV. Below is a chart showing SYNA's trailing twelve month trading history, with the $35 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) saw options trading volume of 55,778 contracts, representing approximately 5.6 million underlying shares or approximately 47% of ABBV's average daily trading volume over the past month, of 11.9 million shares. Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange: And Vector Group Ltd (Symbol: VGR) saw options trading volume of 6,240 contracts, representing approximately 624,000 underlying shares or approximately 46.8% of VGR's average daily trading volume over the past month, of 1.3 million shares. | Below is a chart showing SYNA's trailing twelve month trading history, with the $35 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) saw options trading volume of 55,778 contracts, representing approximately 5.6 million underlying shares or approximately 47% of ABBV's average daily trading volume over the past month, of 11.9 million shares. Especially high volume was seen for the $70 strike call option expiring September 20, 2019, with 15,274 contracts trading so far today, representing approximately 1.5 million underlying shares of ABBV. Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange: And Vector Group Ltd (Symbol: VGR) saw options trading volume of 6,240 contracts, representing approximately 624,000 underlying shares or approximately 46.8% of VGR's average daily trading volume over the past month, of 1.3 million shares. | Below is a chart showing SYNA's trailing twelve month trading history, with the $35 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) saw options trading volume of 55,778 contracts, representing approximately 5.6 million underlying shares or approximately 47% of ABBV's average daily trading volume over the past month, of 11.9 million shares. Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange: And Vector Group Ltd (Symbol: VGR) saw options trading volume of 6,240 contracts, representing approximately 624,000 underlying shares or approximately 46.8% of VGR's average daily trading volume over the past month, of 1.3 million shares. Especially high volume was seen for the $70 strike call option expiring September 20, 2019, with 15,274 contracts trading so far today, representing approximately 1.5 million underlying shares of ABBV. | Below is a chart showing SYNA's trailing twelve month trading history, with the $35 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) saw options trading volume of 55,778 contracts, representing approximately 5.6 million underlying shares or approximately 47% of ABBV's average daily trading volume over the past month, of 11.9 million shares. Especially high volume was seen for the $70 strike call option expiring September 20, 2019, with 15,274 contracts trading so far today, representing approximately 1.5 million underlying shares of ABBV. Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange: And Vector Group Ltd (Symbol: VGR) saw options trading volume of 6,240 contracts, representing approximately 624,000 underlying shares or approximately 46.8% of VGR's average daily trading volume over the past month, of 1.3 million shares. |
24920.0 | 2019-07-26 00:00:00 UTC | AbbVie Boosts FY19 Adj. EPS Outlook - Quick Facts | ABBV | https://www.nasdaq.com/articles/abbvie-boosts-fy19-adj.-eps-outlook-quick-facts-2019-07-26 | nan | nan | (RTTNews) - While reporting financial results for the second quarter, biopharmaceutical company AbbVie Inc. (ABBV) on Friday raised its adjusted earnings guidance for the full-year 2019.
For fiscal 2019, AbbVie now projects adjusted earnings in a range of $8.82 to $8.92 per share, up from the prior guidance range of $8.73 to $8.83 per share.
On average, analysts polled by Thomson Reuters expect the company to report earnings of $8.82 per share for the year. Analysts' estimates typically exclude special items.
The company's 2019 adjusted earnings guidance excludes $3.13 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - While reporting financial results for the second quarter, biopharmaceutical company AbbVie Inc. (ABBV) on Friday raised its adjusted earnings guidance for the full-year 2019. For fiscal 2019, AbbVie now projects adjusted earnings in a range of $8.82 to $8.92 per share, up from the prior guidance range of $8.73 to $8.83 per share. On average, analysts polled by Thomson Reuters expect the company to report earnings of $8.82 per share for the year. | (RTTNews) - While reporting financial results for the second quarter, biopharmaceutical company AbbVie Inc. (ABBV) on Friday raised its adjusted earnings guidance for the full-year 2019. For fiscal 2019, AbbVie now projects adjusted earnings in a range of $8.82 to $8.92 per share, up from the prior guidance range of $8.73 to $8.83 per share. On average, analysts polled by Thomson Reuters expect the company to report earnings of $8.82 per share for the year. | (RTTNews) - While reporting financial results for the second quarter, biopharmaceutical company AbbVie Inc. (ABBV) on Friday raised its adjusted earnings guidance for the full-year 2019. For fiscal 2019, AbbVie now projects adjusted earnings in a range of $8.82 to $8.92 per share, up from the prior guidance range of $8.73 to $8.83 per share. The company's 2019 adjusted earnings guidance excludes $3.13 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items. | (RTTNews) - While reporting financial results for the second quarter, biopharmaceutical company AbbVie Inc. (ABBV) on Friday raised its adjusted earnings guidance for the full-year 2019. For fiscal 2019, AbbVie now projects adjusted earnings in a range of $8.82 to $8.92 per share, up from the prior guidance range of $8.73 to $8.83 per share. On average, analysts polled by Thomson Reuters expect the company to report earnings of $8.82 per share for the year. |
24921.0 | 2019-07-26 00:00:00 UTC | Bristol-Myers Gets Positive CHMP Opinion For Empliciti | ABBV | https://www.nasdaq.com/articles/bristol-myers-gets-positive-chmp-opinion-for-empliciti-2019-07-26 | nan | nan | (RTTNews) - Bristol-Myers Squibb Co. (BMY) said that the Committee for Medicinal Products for Human Use or CHMP of the European Medicines Agency has adopted a positive opinion on a Type-II variation application for Empliciti or elotuzumab plus pomalidomide and low-dose dexamethasone for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI), and have demonstrated disease progression on the last therapy.
The CHMP recommendation will now be reviewed by the European Commission, which has the authority to approve medicines for the European Union.
Bristol-Myers Squibb and AbbVie are co-developing Empliciti, with Bristol-Myers Squibb solely responsible for commercial activities.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Bristol-Myers Squibb and AbbVie are co-developing Empliciti, with Bristol-Myers Squibb solely responsible for commercial activities. (RTTNews) - Bristol-Myers Squibb Co. (BMY) said that the Committee for Medicinal Products for Human Use or CHMP of the European Medicines Agency has adopted a positive opinion on a Type-II variation application for Empliciti or elotuzumab plus pomalidomide and low-dose dexamethasone for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI), and have demonstrated disease progression on the last therapy. The CHMP recommendation will now be reviewed by the European Commission, which has the authority to approve medicines for the European Union. | Bristol-Myers Squibb and AbbVie are co-developing Empliciti, with Bristol-Myers Squibb solely responsible for commercial activities. (RTTNews) - Bristol-Myers Squibb Co. (BMY) said that the Committee for Medicinal Products for Human Use or CHMP of the European Medicines Agency has adopted a positive opinion on a Type-II variation application for Empliciti or elotuzumab plus pomalidomide and low-dose dexamethasone for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI), and have demonstrated disease progression on the last therapy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Bristol-Myers Squibb and AbbVie are co-developing Empliciti, with Bristol-Myers Squibb solely responsible for commercial activities. (RTTNews) - Bristol-Myers Squibb Co. (BMY) said that the Committee for Medicinal Products for Human Use or CHMP of the European Medicines Agency has adopted a positive opinion on a Type-II variation application for Empliciti or elotuzumab plus pomalidomide and low-dose dexamethasone for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI), and have demonstrated disease progression on the last therapy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Bristol-Myers Squibb and AbbVie are co-developing Empliciti, with Bristol-Myers Squibb solely responsible for commercial activities. (RTTNews) - Bristol-Myers Squibb Co. (BMY) said that the Committee for Medicinal Products for Human Use or CHMP of the European Medicines Agency has adopted a positive opinion on a Type-II variation application for Empliciti or elotuzumab plus pomalidomide and low-dose dexamethasone for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI), and have demonstrated disease progression on the last therapy. The CHMP recommendation will now be reviewed by the European Commission, which has the authority to approve medicines for the European Union. |
24922.0 | 2019-07-26 00:00:00 UTC | 5 Things You Need to Know From AbbVie's Q2 Earnings Results | ABBV | https://www.nasdaq.com/articles/5-things-you-need-to-know-from-abbvies-q2-earnings-results-2019-07-26 | nan | nan | AbbVie (NYSE: ABBV) needed some good news: Its announcement late last month of a plan to acquire Allergan went over like a lead balloon on Wall Street, and its stock price is down 25% so far this year. Investors continue to worry about the slumping sales of the big pharma company's top-selling drug Humira.
However, the drugmaker gave shareholders a reason to smile when it reported its second-quarter results before the market opened Friday -- because they were better than most analysts expected. Here are five things you need to know about AbbVie's Q2 earnings update.
Image source: Getty Images.
1. Revenue was down, but not as far as expected
AbbVie's total revenue slipped 0.3% year over year to $8.255 billion. But this total was a little better than the average forecast of Wall Street analysts, which was $8.1 billion. On an operational basis, AbbVie's revenue even rose by 1.5% year over year.
Granted, none of this will cause anyone to pop the corks on the champagne. However, AbbVie can use any good news it can get right now.
2. Humira's U.S. growth was not enough to offset European shrinkage
The main story for AbbVie is still Humira. The good news from Q2 was that U.S. sales for the immunology drug increased by 7.7% year over year to $3.8 billion. The bad news was that international sales for Humira plunged 35.2% from the prior-year period to $1.1 billion. As a result, Humira's total global net revenue fell 6.1% year over year to $4.9 billion.
The problem, of course, is that Humira now faces competition in Europe from biosimilars. The year-over-year comparisons should look a lot better in 2020, but that doesn't make things better right now. And investors know that 2023 -- when biosimilars to Humira will go on sale in the U.S. -- is just around the corner.
3. Sales of its blood cancer drugs kept growing
In its first-quarter earnings results, there was one bright spot for AbbVie: The performance for its blood cancer drugs Imbruvica and Venclexta. That story continued in Q2 as sales of both treatments gained momentum.
Revenues from Imbruvica jumped 29.3% year over year to $1.1 billion. Venclexta generated sales of $169 million, up from $151 million in Q1. And sales should pick up even more in the wake of the FDA's recent decision to approve the use of Venclexta in combination with Gazyva as a first-line treatment for chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL).
4. HCV treatment sales grew weaker
AbbVie is slugging it out with Gilead Sciences in the hepatitis C virus (HCV) market. Both companies have seen their HCV drug sales slide, however, as the population of people needing treatment shrinks.
In Q2, combined sales for AbbVie's HCV drugs Mavyret and Viekira fell 19.4% year over year to $784 million. The decline was even worse in international markets, where HCV revenue plunged 29.5%.
5. Management is guiding for higher adjusted earnings
AbbVie's most encouraging news was that it was raising its full-year 2019 adjusted earnings per share (EPS) guidance. The company now expects adjusted EPS of $8.82 to $8.92, higher than its previous guidance range of $8.73 to $8.83. The midpoint of AbbVie's new range represents year-over-year growth of 12.1%. The guidance boost came after AbbVie delivered adjusted EPS of $2.26 in Q2, well above the consensus Wall Street estimate of $2.21.
The company lowered its full-year GAAP EPS guidance, though. AbbVie projects GAAP diluted EPS in 2019 will be between $5.69 and $5.79, down from its previous outlook of $7.26 to $7.36. However, the difference stemmed largely from a non-cash charge the company recorded for the new immunology drug Skyrizi.
Big developments on the way
Speaking of Skyrizi, AbbVie continues to have great expectations for its new psoriasis drug. The company reported sales of Skyrizi totaled $48 million in its first quarter on the market. AbbVie eagerly awaits approval for another potential blockbuster immunology drug, upadacitinib. Market researcher EvaluatePharma forecasts that upadacitinib will be the second-biggest drug launched in 2019.
But looming largest on the horizon for AbbVie is its pending acquisition of Allergan. CEO Rick Gonzalez talked up the deal, calling it "a transformative transaction that will provide scale and diversity to our business and position AbbVie for top-tier performance over the long term." The acquisition is expected to close in early 2020.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE: ABBV) needed some good news: Its announcement late last month of a plan to acquire Allergan went over like a lead balloon on Wall Street, and its stock price is down 25% so far this year. CEO Rick Gonzalez talked up the deal, calling it "a transformative transaction that will provide scale and diversity to our business and position AbbVie for top-tier performance over the long term." Here are five things you need to know about AbbVie's Q2 earnings update. | In Q2, combined sales for AbbVie's HCV drugs Mavyret and Viekira fell 19.4% year over year to $784 million. Management is guiding for higher adjusted earnings AbbVie's most encouraging news was that it was raising its full-year 2019 adjusted earnings per share (EPS) guidance. AbbVie (NYSE: ABBV) needed some good news: Its announcement late last month of a plan to acquire Allergan went over like a lead balloon on Wall Street, and its stock price is down 25% so far this year. | Revenue was down, but not as far as expected AbbVie's total revenue slipped 0.3% year over year to $8.255 billion. Sales of its blood cancer drugs kept growing In its first-quarter earnings results, there was one bright spot for AbbVie: The performance for its blood cancer drugs Imbruvica and Venclexta. In Q2, combined sales for AbbVie's HCV drugs Mavyret and Viekira fell 19.4% year over year to $784 million. | AbbVie (NYSE: ABBV) needed some good news: Its announcement late last month of a plan to acquire Allergan went over like a lead balloon on Wall Street, and its stock price is down 25% so far this year. Here are five things you need to know about AbbVie's Q2 earnings update. Revenue was down, but not as far as expected AbbVie's total revenue slipped 0.3% year over year to $8.255 billion. |
24923.0 | 2019-07-26 00:00:00 UTC | AbbVie Earnings: ABBV Stock Pops on Q2 Beat | ABBV | https://www.nasdaq.com/articles/abbvie-earnings%3A-abbv-stock-pops-on-q2-beat-2019-07-26 | nan | nan | AbbVie earnings for the second quarter of 2019 have ABBV stock up on Friday.
Source: Shutterstock
AbbVie (NYSE:) reported earnings per share of $2.26 for the second quarter of the year. This is an increase over the company’s earnings per share of $2.00 from the same time last year. It was also good news for ABBV stock by beating out Wall Street’s earnings per share estimate of $2.21 for the quarter.
Net income reported in the AbbVie earnings release for the second quarter of 2019 comes in at $741 million. This is a drop from the company’s net income of $1.98 billion reported in the second quarter of the previous year.
The AbbVie earnings report for the second quarter of the year also has operating income coming in at $3.40 billion. That’s better than the biopharmaceutical company’s operating income of $2.76 billion reported in the same period of the year prior.
AbbVie earnings for the second quarter of 2019 have it bringing in revenue of . This is down from the company’s revenue of $8.28 billion reported in the second quarter of 2018. Despite this, it was still a boon to ABBV stock by coming in above analysts’ revenue estimate of $8.10 billion for the period.
The most recent AbbVie earnings report also includes an update to its 2019 outlook. The company is now expecting earnings per share for the year to range from $8.82 to $8.92. The previous guidance was for earnings per share between $8.73 and $8.83. Wall Street is looking for earnings per share of $8.82 for the year.
ABBV stock was up 2% as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Source: Shutterstock AbbVie (NYSE:) reported earnings per share of $2.26 for the second quarter of the year. It was also good news for ABBV stock by beating out Wall Street’s earnings per share estimate of $2.21 for the quarter. Despite this, it was still a boon to ABBV stock by coming in above analysts’ revenue estimate of $8.10 billion for the period. | It was also good news for ABBV stock by beating out Wall Street’s earnings per share estimate of $2.21 for the quarter. The AbbVie earnings report for the second quarter of the year also has operating income coming in at $3.40 billion. AbbVie earnings for the second quarter of 2019 have ABBV stock up on Friday. | Source: Shutterstock AbbVie (NYSE:) reported earnings per share of $2.26 for the second quarter of the year. It was also good news for ABBV stock by beating out Wall Street’s earnings per share estimate of $2.21 for the quarter. The AbbVie earnings report for the second quarter of the year also has operating income coming in at $3.40 billion. | Source: Shutterstock AbbVie (NYSE:) reported earnings per share of $2.26 for the second quarter of the year. The AbbVie earnings report for the second quarter of the year also has operating income coming in at $3.40 billion. AbbVie earnings for the second quarter of 2019 have ABBV stock up on Friday. |
24924.0 | 2019-07-24 00:00:00 UTC | 3 Top Healthcare Stocks to Buy in July | ABBV | https://www.nasdaq.com/articles/3-top-healthcare-stocks-to-buy-in-july-2019-07-24 | nan | nan | The demand for high-quality healthcare remains strong in good times and in bad. That makes the sector a great place for investors to search for stock ideas.
Which stocks do we favor for the long term? We asked a team of Motley Fool contributors to weigh in, and they picked AbbVie (NYSE: ABBV), Intercept Pharmaceuticals (NASDAQ: ICPT), and Inogen (NASDAQ: INGN).
Image source: Getty Images.
A merger that makes things less ugly
Chuck Saletta (AbbVie): Healthcare titan AbbVie has a major problem. The primary ingredient in its blockbuster arthritis medicine, Humira, is no longer covered by a patent, which would ordinarily open it to fierce competition. But the company has utilized patents on other parts used to bring that biologic to market to extend the life of its patent protection, somewhat staving off the competitive threat.
Still, that process can extend the life of the compound's patent protection for only so long. AbbVie's low market price compared to its forward earnings estimates largely reflects the fact that the market isn't anticipating the Humira party to last for all that much longer. AbbVie recognizes that risk, and in fact, it's a huge reason the company recently decided to acquire Allergan. Of course, Allergan has also been troubled in recent years, as it has been heavily reliant on its own blockbuster drug Botox.
While neither company is entering the merger from a position of strength, the merger will help the combined business become more efficient. AbbVie is projecting to deliver more than $2 billion in annual savings, starting around three years after the merger closes. Those cost savings are expected to help the company protect its ability to pay and grow its dividends, which is important to many investors attracted to AbbVie's nearly 6% yield.
In a nutshell, the merger buys AbbVie time -- time to better prepare for the loss of Humira, time to attempt to find more blockbusters to potentially replace that lost revenue, and time to try and squeeze more efficiencies to deliver more value. That new lease on life makes now a reasonable time to consider an investment in AbbVie.
A $35 billion opportunity awaits
Sean Williams (Intercept Pharmaceuticals): Though I see plenty of intriguing value among pharmacies and generic-drug stocks, it's the recent weakness in biotech Intercept Pharmaceuticals that has me believing it's due for a turn of good fortune.
In February, Intercept released top-line results from its long-awaited phase 3 Regenerate study for Ocaliva in patients with nonalcoholic steatohepatitis (NASH), a liver disease affecting up to 5% of the adult U.S. population, and the projected leading cause of liver transplants by the midpoint of the next decade. Ocaliva wound up meeting one of Regenerate's two co-primary end points, with a statistically significant reduction in liver fibrosis, but a nonstatistical yet positive trend in NASH resolution, relative to the placebo.
The reason Intercept never soared into the heavens following this positive data is because the highest dose of Ocaliva (which was also the most effective in clinical studies) led to instances of pruritus (itching) in 51% of patients, and the discontinuation of 9% of patients. There are clear worries that, even if approved, Ocaliva won't be for every adult with NASH, or that its run as a potential treatment for NASH won't have a long runway.
But the thing to remember is this: There are few therapies within striking distance of Intercept's Ocaliva in NASH. A handful of NASH therapies have already failed in mid- or late-stage clinical studies, and what successes we've seen are likely still years away from hitting pharmacy shelves. With there's a good likelihood of Ocaliva getting the green light from the Food and Drug Administration (FDA) in 2020, it should have years to gobble up significant market share in the NASH space, even if it's only for a certain subset of patients. As a $35 billion market, even a 5% share could wind up being very significant.
Ocaliva is also approved to treat primary biliary cholangitis (PBC), meaning the FDA is already familiar with its safety profile. With a potential $300 million in peak sales from PBC, and perhaps north of $1 billion annually from NASH, the company's current market cap of $2.6 billion appears inexpensive. That makes it an intriguing buy this July.
Growth at a reasonable price
Brian Feroldi (Inogen): I'm a picky investor, but I'll admit that there's a lot to like about Inogen.
Inogen was founded in the early 2000s by a group of college students. One of those students had a grandmother who was prescribed oxygen therapy and complained openly about how she had to lug around a heavy oxygen tank. Those college students wanted to help, so they created a company called Inogen and developed a portable oxygen concentrator (POC), which creates a continuous stream of oxygen from the surrounding air.
POCs offer numerous advantages over traditional oxygen therapy. They are small, light, and provide users with far more mobility than traditional oxygen tanks. They're also cost effective since they do not need to be continually changed out the way oxygen tanks do.
These advantages have allowed Inogen to quickly take market share in the oxygen therapy market. Revenue, profits, and the company's stock have all soared in response:
INGN Revenue (TTM) data by YCharts.
You'll notice that the company's stock has drastically declined over the last year. That weakness was caused by slowing growth due to a business model shift, lower-than-hoped-for productivity, and pressure from competitive bidding. Growth investors had abandoned the stock in response.
The slowing growth isn't great news, but the huge decline has made Inogen's valuation far more attractive than it has been in years. Shares are currently trading for about 30 times next year's earnings estimate. That wouldn't be a screaming bargain if the company wasn't able to grow its profits ever again, but Wall Street estimates that it will grow its bottom line in excess of 15% annually over the next five years. I think that growth rate is believable since the entire oxygen therapy market is growing by 7% annually and POC penetration remains very low. Buying shares today while they are on sale and holding for the long term could prove to be a profit-friendly move.
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Brian Feroldi has no position in any of the stocks mentioned. Chuck Saletta owns AbbVie bonds. Sean Williams owns shares of Intercept Pharmaceuticals. The Motley Fool recommends Intercept Pharmaceuticals. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Those cost savings are expected to help the company protect its ability to pay and grow its dividends, which is important to many investors attracted to AbbVie's nearly 6% yield. We asked a team of Motley Fool contributors to weigh in, and they picked AbbVie (NYSE: ABBV), Intercept Pharmaceuticals (NASDAQ: ICPT), and Inogen (NASDAQ: INGN). A merger that makes things less ugly Chuck Saletta (AbbVie): Healthcare titan AbbVie has a major problem. | A merger that makes things less ugly Chuck Saletta (AbbVie): Healthcare titan AbbVie has a major problem. We asked a team of Motley Fool contributors to weigh in, and they picked AbbVie (NYSE: ABBV), Intercept Pharmaceuticals (NASDAQ: ICPT), and Inogen (NASDAQ: INGN). AbbVie's low market price compared to its forward earnings estimates largely reflects the fact that the market isn't anticipating the Humira party to last for all that much longer. | In a nutshell, the merger buys AbbVie time -- time to better prepare for the loss of Humira, time to attempt to find more blockbusters to potentially replace that lost revenue, and time to try and squeeze more efficiencies to deliver more value. We asked a team of Motley Fool contributors to weigh in, and they picked AbbVie (NYSE: ABBV), Intercept Pharmaceuticals (NASDAQ: ICPT), and Inogen (NASDAQ: INGN). A merger that makes things less ugly Chuck Saletta (AbbVie): Healthcare titan AbbVie has a major problem. | That new lease on life makes now a reasonable time to consider an investment in AbbVie. We asked a team of Motley Fool contributors to weigh in, and they picked AbbVie (NYSE: ABBV), Intercept Pharmaceuticals (NASDAQ: ICPT), and Inogen (NASDAQ: INGN). A merger that makes things less ugly Chuck Saletta (AbbVie): Healthcare titan AbbVie has a major problem. |
24925.0 | 2019-07-23 00:00:00 UTC | How to Invest in Cancer-Fighting Stocks | ABBV | https://www.nasdaq.com/articles/how-to-invest-in-cancer-fighting-stocks-2019-07-23 | nan | nan | A 19th-century surgeon described cancer as "the emperor of all maladies, the king of terrors." Cancer isn't just one disease. Instead, it includes a wide range of diseases in which abnormal cells in the body divide uncontrollably.
But the reign of this terrible "emperor" is definitely under attack. Over the last several decades, new ways to diagnose and treat cancer have been developed. An entire industry has emerged with a primary goal of fighting cancer.
It might seem callous to think about trying to make a profit by investing in cancer-fighting stocks. However, companies developing more effective cancer therapies need access to capital. And publicly traded companies have made some of the greatest breakthroughs in cancer treatment.
How can you get started in investing in cancer-fighting stocks? There are seven key steps to follow:
Develop a general understanding of the cancer treatment industry.
Identify the key trends for cancer-fighting stocks.
Understand the risks associated with cancer-fighting stocks.
Know what to look for in cancer-fighting stocks.
Evaluate the top cancer-fighting stocks.
Invest in one or more cancer-fighting stocks.
Reevaluate your investment decisions periodically.
Here's what you need to know about each of these seven steps for investing in cancer-fighting stocks.
Image source: Getty Images.
1. Develop a general understanding of the cancer treatment industry
Nearly $150 billion was spent in 2018 on drugs to treat cancer, according to the IQVIA Institute for Human Data Science. The top 38 drugs accounted for 80% of this amount.
As you might expect, both large pharmaceutical companies and small biotechs have targeted cancer. More than 700 drugmakers have cancer therapies in late-stage clinical development. Of these, nearly 500 have late-stage pipelines solely focused on treating cancer.
What does "late-stage" actually mean? Once a drug candidate is identified, there's a long process required before it can reach the market, often referred to as the drug pipeline. Preclinical testing is first conducted in the laboratory and with animals. If this testing goes well, the drug advances to phase 1 clinical studies that primarily focus on evaluating the drug's safety. Assuming this phase 1 testing is successful, the drug moves to phase 2 studies that test the drug's efficacy and determine appropriate dosage levels. Only after the successful completion of phase 2 studies will a drug advance to phase 3 clinical testing and be viewed as a late-stage candidate.
Cancer drugs that appear to be both safe and effective in late-stage testing are then submitted for regulatory approval. In the U.S., the Food and Drug Administration (FDA) reviews all drugs for approval. In the European Union, the European Medicines Agency (EMA) evaluates drugs and makes approval decisions.
2. Identify the key trends for cancer-fighting stocks
Three key trends should impact cancer-fighting stocks for years to come:
Aging populations
Earlier diagnosis
Personalized cancer medicines
As individuals age, their risk for cancer increases significantly. Around 60% of cancer patients are age 65 or older. This 65-and-over group is the fastest-growing segment of the U.S. population. Sixteen percent of the world's population will be age 65 or over by 2050, up from 9% in 2018. Demographic trends appear likely to drive the numbers of cancer diagnoses much higher over the next few decades.
Many types of cancer can be effectively treated if they're diagnosed early enough. Another key trend that will impact cancer-fighting stocks is the emergence of new methods to detect the presence of cancer at early stages. One important development on this front is liquid biopsies -- blood tests that can identify DNA fragments that break off from tumor cells and can be used in early diagnosis of cancer.
While the prevalence of cancer increases and new methods help diagnose cancer earlier, personalized medicine will likely be a major trend in treating cancer. Personalized cancer medicine involves genetic testing of a patient's cancer cells and normal cells to identify the most effective treatment option. Drugmakers are increasingly focusing on developing personalized medicines that target types of cancer caused by specific genetic mutations (abnormal changes in genes).
3. Understand the risks associated with cancer-fighting stocks
Companies that develop cancer drugs have a high risk of failure in clinical testing. Cancer drugs that begin a phase 1 clinical study have only a 6.2% chance of going on to win FDA approval, according to an analysis by the Biotechnology Innovation Organization (BIO). Cancer drugs have the lowest probability of approval compared to drugs that treat other diseases.
Even after a drug successfully completes late-stage clinical studies, there's no guarantee of regulatory approval. Only one-third of cancer drugs that make it to phase 3 studies win FDA approval, according to BIO. Again, those odds are lower than with any other disease.
Certain types of cancer drugs have better chances, though. More than 73% of hematology drugs, which include drugs that fight blood cancers such as leukemia, that begin phase 1 clinical testing go on to win FDA approval. Still, drugmakers face a significant risk of clinical or regulatory failure.
Also, it's not a slam dunk that a cancer drug will be a commercial success after it wins regulatory approval. Competition is intense. More than half of cancer drugs on the market combined generate only 2.2% of total oncology spending.
4. Know what to look for in cancer-fighting stocks
For the stocks of companies with cancer drugs already on the market, you'll want to look into how quickly sales are increasing for those drugs. Note, however, that the launches of new drugs sometimes start off slowly as companies increase awareness about the drugs among physicians.
Large pharmaceutical companies will typically have other types of approved drugs as well. It's important to find out how well these companies' overall revenue and earnings are growing. A company could have a great cancer drug with fast-growing sales that are eclipsed by declining sales for other drugs that don't treat cancer.
Check out the company's pipeline as well. The stocks of companies that have promising late-stage candidates will generally be less risky than those of companies with only early-stage drugs.
Evaluating the strength of a drugmaker's pipeline can be challenging. Find out what analysts and other industry observers say about a company's pipeline candidates. Read up on any previous clinical results for the drugs. For smaller drugmakers, see if larger companies have partnered on any of their pipeline candidates. That's usually a good sign that the experimental drug has significant potential.
You'll also want to closely examine the cash position of the drugmakers that aren't yet profitable. A small company could have to issue new shares or take on debt if it doesn't have enough cash to fund operations well into the future. Issuing new shares causes shareholder dilution -- each existing share becomes less valuable when more shares become available. Increased debt means higher interest expenses, which can limit how much a company can invest in research and commercialization.
5. Evaluate the top cancer-fighting stocks
There are far too many cancer-fighting stocks to evaluate here. To keep it simple, we'll look at five stocks that are most likely to have top-selling cancer drugs over the next few years to give you a feel for how to evaluate cancer-fighting stocks.
Data sources: Company SEC filings.
AbbVie
AbbVie is best known for immunology drug Humira, which currently reigns as the world's top-selling drug. However, the company also has a tremendously successful cancer drug for which sales are soaring: Imbruvica.
Imbruvica is currently approved to treat several types of cancer, including chronic lymphocytic leukemia (CLL) and mantle cell lymphoma (MCL). Market researcher EvaluatePharma predicts that Imbruvica will be the No. 5 biggest blockbuster drug in the world by 2024 with annual sales of $9.5 billion, more than twice the $4.5 billion the drug made in 2018.
In addition to Imbruvica, AbbVie's lineup includes another fast-rising cancer star with Venclexta. The leukemia drug could be on track to achieve peak annual sales of around $2 billion.
The challenge for AbbVie will be to offset declining sales for Humira, which currently generates more than 56% of total revenue. AbbVie's cancer franchise will help but won't be enough on its own. The company announced the $63 billion acquisition of Allergan in June 2019 as part of its growth strategy. AbbVie also has a promising pipeline, although its primary strength is in immunology.
Bristol-Myers Squibb
Bristol-Myers Squibb claims two drugs on EvaluatePharma's ranking of the biggest blockbusters of the future. One of them, Opdivo, is a cancer drug, while the other, Eliquis, is an anticoagulant.
Opdivo is a cancer immunotherapy, which means it harnesses the body's immune system to attack cancer cells. The drug is currently approved for treating a wide range of cancer types, including lung cancer, melanoma, and kidney cancer. Opdivo raked in $7.6 billion in 2018 and appears to be on track to make more than $11 billion by 2024.
BMS pairs another of its immunotherapies, Yervoy, with Opdivo to treat some types of cancer. The big pharma company also has two other cancer blockbusters, Empliciti and Sprycel.
Thanks to its pending acquisition of Celgene, Bristol-Myers Squibb should soon have an even stronger cancer franchise. Celgene's Revlimid is the top drug used for treating multiple myeloma and myelodysplastic syndrome (MDS). Celgene also claims one of the most valuable pipeline drugs in development with liso-cel, a cancer therapy the biotech expects to submit for FDA approval this year.
Johnson & Johnson
Johnson & Johnson co-markets Imbruvica with AbbVie. While the company's share of Imbruvica's sales continues to climb, J&J has two other cancer drugs for which sales grew even more rapidly in 2018: Darzalex and Zytiga.
Multiple myeloma drug Darzalex could eventually generate annual sales of more than $5 billion, up from $2 billion in 2018. However, prostate cancer drug Zytiga appears to have already hit its peak. The drug made nearly $3.5 billion in 2018, but sales are falling now that it faces generic competition.
The good news for J&J is that it already has another prostate cancer drug on the market with Erleada. The bad news is that although Erleada should be successful, its peak annual sales are expected to reach $1.3 billion -- well below Zytiga's peak.
In addition, J&J's bladder cancer drug Balversa could become another blockbuster for the company. The drug is the first personalized medicine approved for treating bladder cancer. Balversa targets patients whose tumors have specific mutations in the FGFR3 or FGFR2 genes.
Merck
Merck's cancer immunotherapy Keytruda was the No. 3 best-selling drug in the world in 2018. But it's on course to take the top spot within the next few years. Keytruda is expected to generate annual sales of $17 billion by 2024, more than double the $7.2 billion the drug made in 2018.
But Merck doesn't have a deep bench beyond Keytruda, at least in cancer treatment. The company does, however, claim a strong vaccine franchise led by Gardasil and ProQuad/M-M-R II/Varivax.
Keytruda is a cornerstone of Merck's late-stage pipeline, with phase 3 studies in progress evaluating the drug in a number of cancer types. Merck is also partnering with Japanese drugmaker Eisai on Lenvima and with AstraZeneca on Lynparza. Both drugs are already approved for treating multiple types of cancer and are in late-stage studies targeting additional types of cancer.
Pfizer
Pfizer's breast cancer drug Ibrance is already a huge winner, racking up sales of $4.1 billion in 2018. Some analysts think that Ibrance could generate peak annual sales of $8 billion.
While Ibrance has plenty of growth potential, cancer drug Sutent is likely to experience sales declines in the face of newer competition. On the other hand, Pfizer's prostate cancer drug Xtandi could become the company's next cancer blockbuster. Pfizer also has several new cancer drugs that should deliver solid growth, including breast cancer drug Talzenna and lung cancer drug Lorbrena.
Pfizer has a dozen late-stage cancer programs. Four of those programs involve Bavencio, an immunotherapy Pfizer is co-developing with German pharma company Merck KGaA (not to be confused with the U.S.-based Merck).
Although Pfizer's cancer franchise appears to be strong, the company is headed for a major sales slump with blockbuster nerve pain drug Lyrica facing an onslaught of generic competition. The company should be able to return to growth after 2020, though, as it moves past the negative impact of declining sales for Lyrica.
One exchange-traded fund to consider
In addition to evaluating top cancer-fighting stocks, consider one exchange-traded fund (ETF) that focuses on stocks of companies with cancer drugs. The Loncar Cancer Immunotherapy ETF (NASDAQ: CNCR) offers exposure to multiple stocks of companies that develop cancer immunotherapies. Like a mutual fund, an ETF allows investors to spread their money around and not rely too much on any individual stock. Unlike a mutual fund, an ETF is traded on a major stock exchange, and the price you'll pay to buy shares is determined just like that of a common stock.
The primary reason to consider the Loncar Cancer Immunotherapy ETF is that it provides some diversification. The ETF currently holds positions in 25 cancer-fighting stocks, including Bristol-Myers Squibb and Merck. The main downside to buying the ETF is that there's an annual management fee of 0.79%.
6. Invest in one or more cancer-fighting stocks
Your next step is to actually invest in one or more cancer-fighting stocks. Keep in mind, though, that you shouldn't put too much of your portfolio in one stock or even in one industry, for that matter. Diversification will always be a smart choice for investors.
Different investors have different views about how much of their overall portfolio to put in one stock or one industry. In general, you probably should initially invest no more than 5% of your portfolio in one stock and no more than 20% in one industry. Over time, though, it's possible that growth could give an individual stock or a specific industry a greater weighting in your portfolio.
7. Reevaluate your investment decisions periodically
The last step is one that you'll need to repeat periodically: Reevaluate your investment decisions. Go back to the reasons you initially bought cancer-fighting stocks and make sure they're still applicable. It's possible that one or more of your stocks have run into some of the risks discussed earlier and no longer are as attractive.
How often should you reevaluate? There's no magic answer, but a good rule of thumb is to look at your investments every three months or so.
Why invest in cancer-fighting stocks?
You've learned how to invest in cancer stocks. But why should you invest in these stocks? The main reason is the same reason you would invest in any kind of stock: to generate market-beating returns over the long run.
The good news is that solid cancer-fighting stocks should be able to achieve this goal. IQVIA projects that the cancer treatment market will grow by a compound annual growth rate (CAGR) of 11% to 14% over the next five years. The best-performing cancer-fighting stocks should provide returns that beat this overall growth range.
Of course, there's also another key reason to invest in cancer-fighting stocks: It allows you to own part of one or more companies that are attempting to battle a group of terrifying diseases. By owning cancer-fighting stocks, you play a small part in the ongoing effort to dethrone the emperor of all maladies.
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Keith Speights owns shares of AbbVie, Celgene, and Pfizer. The Motley Fool owns shares of and recommends Celgene. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie AbbVie is best known for immunology drug Humira, which currently reigns as the world's top-selling drug. In addition to Imbruvica, AbbVie's lineup includes another fast-rising cancer star with Venclexta. The challenge for AbbVie will be to offset declining sales for Humira, which currently generates more than 56% of total revenue. | AbbVie AbbVie is best known for immunology drug Humira, which currently reigns as the world's top-selling drug. In addition to Imbruvica, AbbVie's lineup includes another fast-rising cancer star with Venclexta. The challenge for AbbVie will be to offset declining sales for Humira, which currently generates more than 56% of total revenue. | AbbVie AbbVie is best known for immunology drug Humira, which currently reigns as the world's top-selling drug. In addition to Imbruvica, AbbVie's lineup includes another fast-rising cancer star with Venclexta. The challenge for AbbVie will be to offset declining sales for Humira, which currently generates more than 56% of total revenue. | AbbVie AbbVie is best known for immunology drug Humira, which currently reigns as the world's top-selling drug. In addition to Imbruvica, AbbVie's lineup includes another fast-rising cancer star with Venclexta. The challenge for AbbVie will be to offset declining sales for Humira, which currently generates more than 56% of total revenue. |
24926.0 | 2019-07-23 00:00:00 UTC | Why Bristol-Myers Squibb Stock Is Stumbling Ahead of Earnings | ABBV | https://www.nasdaq.com/articles/why-bristol-myers-squibb-stock-is-stumbling-ahead-of-earnings-2019-07-23 | nan | nan | Ahead of its quarterly earnings report scheduled for July 25, Bristol-Myers Squibb (NYSE:) found itself trading at fresh 52-week lows. While BMY stock has kept up with the iShares Nasdaq Biotechnology ETF (NASDAQ:) in that time, investors are getting increasingly negative on the company. With that in mind, what should we expect in the upcoming report and should investors still be bearish?
Source: Shutterstock
Thus far, the outlook for BMY isn’t so great. Even if Bristol-Myers were to report a blowout quarter, shareholders may not even react at all. And if it issued a stronger outlook, BMY stock may barely nudge higher.
Investors are deeply fixated on the Celgene (NASDAQ:) acquisition, where BMY is paying $74 billion for the company and the fact that it needs this massive acquisition to offset its own clinical setbacks. Its cancer immunotherapy drug Opdivo is losing ground to Merck’s (NYSE:) Keytruda. Celgene’s key myeloma drug, Revlimid, faces generic competition starting in March 2022.
Bristol-Myers reportedly must Celgene’s arthritis medicine Oteza to get the U.S. Federal Trade Commission’s sign off on the deal. This compromise is devastating for the companies because the drug brought in 10%, or nearly $400 million, in sales in Celgene’s first quarter. Celgene’s disposition of this unit ahead of the deal will hurt Bristol-Myers, which needs all the cash flow generation to pay down debt. Although BMY said it will find $2.5 billion in cost synergies, the $1.6 billion in lost annualized revenue makes the Celgene buyout less attractive.
Investors continued to vote against the deal by selling BMY stock overall. The stock tried, on two occasions, to breakout and rally back to the $50 – $55 level, only to fail. And after each failed breakout, trading volume increased.
Strong Fundamentals
Bristol Myers shares may bring pain for investors, but the company is a fundamentally strong company with a top-notch management team. It completed the divestment deal with its consumer health business (UPSA) on July 1 — . And BMY is streamlining operations to cut costs ahead of the Celgene deal’s closing. Once the deal is complete, expect Bristol Myers to use as much available free cash flow to pay down its debt quickly. AbbVie (NYSE:) has the same strategy with its Allergan (NYSE:) buyout. It will use all cash flow generation from Humira to pay off the mountain of debt related to the acquisition.
Second-Quarter Earnings Expectations
In the first quarter, BMY earned $1.10 a share as revenue grew 14% to $5.92 billion, beating consensus estimates in both cases. Analysts expect the company will report earnings of $1.06, up just slightly from last year’s earnings-per-share of $1.01. Despite the flat earnings growth, analysts are very bullish and have an average price target of $57.67. This is ~35% higher than its recent closing price of $42.77.
The company may give an updated view of its expectations stemming from the Celgene integration. With respect to the RCC (Renal Cell Carcinoma) market, BMY saw very strong tailwinds in the U.S. in the last quarter. It grew Opdivo, Yervoy market share to just over 40% in the U.S. And positive feedback from early launches in Germany and France are encouraging. Expect access to Canada, Australia and the U.K. to add to its market share and revenue growth.
For the full year, Bristol-Myers expects operating expenses consistent with historical trends. It plans to continue increasing its even though it pays down its debt rapidly over the next few years. All the while, it seeks to improve its credit metrics. Management forecasts growth of the combined company will offset the expected drop in Revlimid sales starting in 2022. It believes it may drive continued annual growth through 2025.
Valuation and Your Takeaway
BMY stock has upside of 35% if income investors use a to value the company. Assuming modest perpetuity growth of just 2.7% – 3.7%, the stock clearly trades at a discount. Investors are punishing the company more than they need to. If the company forecasts a stronger outlook for the rest of the year, look for the stock to reverse its 12.5% monthly drop and 17.7% year-to-date declines.
As of this writing, Chris Lau owned shares in ABBV.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE:) has the same strategy with its Allergan (NYSE:) buyout. As of this writing, Chris Lau owned shares in ABBV. Ahead of its quarterly earnings report scheduled for July 25, Bristol-Myers Squibb (NYSE:) found itself trading at fresh 52-week lows. | AbbVie (NYSE:) has the same strategy with its Allergan (NYSE:) buyout. As of this writing, Chris Lau owned shares in ABBV. Strong Fundamentals Bristol Myers shares may bring pain for investors, but the company is a fundamentally strong company with a top-notch management team. | AbbVie (NYSE:) has the same strategy with its Allergan (NYSE:) buyout. As of this writing, Chris Lau owned shares in ABBV. While BMY stock has kept up with the iShares Nasdaq Biotechnology ETF (NASDAQ:) in that time, investors are getting increasingly negative on the company. | AbbVie (NYSE:) has the same strategy with its Allergan (NYSE:) buyout. As of this writing, Chris Lau owned shares in ABBV. Ahead of its quarterly earnings report scheduled for July 25, Bristol-Myers Squibb (NYSE:) found itself trading at fresh 52-week lows. |
24927.0 | 2019-07-21 00:00:00 UTC | AbbVie's Acquisitions Report Card Shows Investors Have a Reason to Worry About the Allergan Buyout | ABBV | https://www.nasdaq.com/articles/abbvies-acquisitions-report-card-shows-investors-have-a-reason-to-worry-about-the-allergan | nan | nan | You can't predict the future by merely looking at the past. But the past does give clues that help us make educated guesses about what the future might hold.
AbbVie (NYSE: ABBV) announced in June that it plans to acquire Allergan (NYSE: AGN). Many immediately panned the deal as a $63 billion mistake. Others were more optimistic about the transaction. These views were primarily based on the acquisition's price tag and the known pros and cons for Allergan.
However, there are many unknowns associated with buying a biopharmaceutical company. Evaluating a purchase involves digging into the target company's pipeline to try to determine how much value it might bring. That requires considerable expertise.
This isn't the first acquisition for AbbVie. Could the company's previous deals provide some insight into how adept AbbVie's team has been at identifying the real value of potential acquisition targets? I think so. With this in mind, I developed a report card of AbbVie's acquisitions to identify the possible implications for the Allergan deal. And based on what I found, investors have reason to worry.
Image source: Getty Images.
AbbVie's report card
AbbVie was spun off from Abbott Labs in 2013. Since then, the company has initiated five acquisition deals. Here's AbbVie's acquisitions report card:
Data sources: Company news releases, author's estimations of grades.
This obviously doesn't include very many transactions. I also looked at relevant acquisitions made by Abbott Labs in the five-year period leading up to its spin-off of AbbVie. Several of AbbVie's top executives were with the company during this time, including CEO Rick Gonzalez.
Abbott made only one acquisition during this period that involved what would later become AbbVie. In 2010, the healthcare giant bought Facet Biotech for $450 million. If we included this deal in AbbVie's report card, I think the company would have another grade of D.
My grading rationale
Let's look at why I assigned those grades to each of AbbVie's acquisitions.
Shire: AbbVie ultimately threw in the towel on the transaction after the U.S. Treasury Department issued new rules that diminished the tax advantages of buying companies based in Ireland and other countries with low tax rates. However, I think AbbVie deserves a grade of D because it had to pay a $1.64 billion breakup fee. Also, Shire was later acquired in 2018 by Takeda for $62 billion. If we assume that the price tags in 2014 and 2018 were fair, Shire's value increased by a compound annual growth rate (CAGR) of only 3% or so. Had AbbVie completed the acquisition, it arguably wouldn't have paid off very much. I almost gave the company an "incomplete" grade on this deal, but I think AbbVie really deserves a D.
Pharmacyclics: AbbVie had a solid win with this acquisition. Pharmacyclics' cancer drug Imbruvica has generated sales of nearly $9.8 billion. Market researcher EvaluatePharma projects that Imbruvica will be the No. 5 best-selling drug in the world by 2024, with annual sales of $9.5 billion (note, though, that Pharmacyclics' partner Johnson & Johnson will take part of those sales). Although AbbVie's purchase of Pharmacyclics hasn't paid off yet, it will over the long run. It also gives the company a solid presence in oncology that should help it in marketing other cancer drugs such as Venclexta. That's enough to warrant a solid B for the deal in my view.
Stemcentrx: AbbVie's executives sang the merits of experimental cancer drug Rova-T when the Stemcentrx buyout was announced in 2016. But by 2018 they were singing the blues. Rova-T flopped in clinical studies. Those flops give AbbVie a big fat F on this deal.
Allergan: The proposed acquisition isn't finalized yet, so AbbVie obviously can only receive a grade of "incomplete" on the Allergan buyout at this point.
Mavupharma: It's too early and there's not enough information available about this acquisition to assign a grade, so AbbVie got another "incomplete" on the Mavupharma purchase.
Facet Biotech: Abbott acquired Facet primarily to get experimental multiple sclerosis drug daclizumab. The drug won FDA approval in 2016 and was marketed under the brand name Zinbryta. In 2018, however, AbbVie and partner Biogen withdrew Zinbryta from the market because of safety concerns. The only candidate gained in the Facet deal that could still have potential is cancer drug veliparib, which is being evaluated in late-stage clinical studies. However, the drug failed to meet primary endpoints in two late-stage studies targeting treatment of squamous non-small cell lung cancer (NSCLC) and triple-negative breast cancer. This acquisition is at best a D for AbbVie.
Implications for the Allergan acquisition
There are three key things for investors to note with AbbVie's acquisitions history:
The company doesn't have a lot of experience in making deals.
AbbVie doesn't have any really large successful transactions under its belt.
Its past performance is inconsistent.
None of this instills much confidence in AbbVie's skill in making acquisitions. This doesn't necessarily mean that acquiring Allergan won't work out for AbbVie over the long run. But if we assigned AbbVie an overall grade on its acquisitions prowess, I think the company would squeak by with a D. That's a poor grade considering that AbbVie is moving forward with the biggest acquisition in its history.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Could the company's previous deals provide some insight into how adept AbbVie's team has been at identifying the real value of potential acquisition targets? Here's AbbVie's acquisitions report card: Data sources: Company news releases, author's estimations of grades. AbbVie (NYSE: ABBV) announced in June that it plans to acquire Allergan (NYSE: AGN). | Here's AbbVie's acquisitions report card: Data sources: Company news releases, author's estimations of grades. AbbVie (NYSE: ABBV) announced in June that it plans to acquire Allergan (NYSE: AGN). This isn't the first acquisition for AbbVie. | If we included this deal in AbbVie's report card, I think the company would have another grade of D. My grading rationale Let's look at why I assigned those grades to each of AbbVie's acquisitions. I almost gave the company an "incomplete" grade on this deal, but I think AbbVie really deserves a D. Pharmacyclics: AbbVie had a solid win with this acquisition. But if we assigned AbbVie an overall grade on its acquisitions prowess, I think the company would squeak by with a D. That's a poor grade considering that AbbVie is moving forward with the biggest acquisition in its history. | This isn't the first acquisition for AbbVie. This acquisition is at best a D for AbbVie. AbbVie (NYSE: ABBV) announced in June that it plans to acquire Allergan (NYSE: AGN). |
24928.0 | 2019-07-21 00:00:00 UTC | Better Buy: Pfizer vs. AbbVie | ABBV | https://www.nasdaq.com/articles/better-buy%3A-pfizer-vs.-abbvie-2019-07-21 | nan | nan | Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) have a lot in common. Both big drugmakers are about to experience the impact of a major blockbuster losing market share. Both have promising new drugs and pipelines. Both have rewarded shareholders with great dividends. And both companies have announced acquisitions of Allergan, although Pfizer ultimately called off its proposed buyout.
There's also another common denominator for Pfizer and AbbVie: Both stocks are underperforming the broader market so far this year. But both stocks also arguably have good long-term prospects. Which big pharma stock is the better choice?
Image source: Getty Images.
The case for Pfizer
Pfizer certainly faces a big challenge with its blockbuster drug Lyrica losing patent exclusivity. It's inevitable that the company is about to enter a serious sales slump as a result. Even with this headwind, though, there's a good argument for Pfizer over the long run.
It's important to think past 2020. Declining sales for Lyrica will weigh heavily on Pfizer over the next 18 months or so. After then, though, the company will begin to move past its Lyrica blues. Pfizer's Upjohn segment, which includes drugs like Lyrica that have lost patent exclusivity or will soon do so, should be able to deliver modest revenue growth beginning in 2021.
More important, Pfizer's biopharmaceuticals segment boasts an impressive roster of drugs that should generate strong growth and several very promising pipeline candidates to boot. Pfizer's two biggest rising stars, breast cancer drug Ibrance and anticoagulant Eliquis (which the company co-markets with Bristol-Myers Squibb), continue to enjoy strong momentum.
Several recently approved drugs could be winners for Pfizer as well. These include lung cancer drugs Lorbrena and Vizimpro, breast cancer drug Talzenna, and rare-disease drug Vyndaqel. Pfizer's pipeline currently has 26 late-stage programs, with pain drug tanezumab and experimental pneumococcal vaccine PF-06482077 among the especially promising candidates.
Pfizer's acquisition of Array BioPharma will also add two great drugs to its lineup: Braftovi and Mektovi. A combination of the two drugs is already approved to treat melanoma. The chances appear to be pretty good that the drugs in combination with Eli Lilly's Erbitux will also win approval as a treatment for colorectal cancer.
Don't overlook how important Pfizer's dividend is, either. The dividend yield currently stands at nearly 3.4%. Over the last 10 years, dividends boosted Pfizer's total return by nearly 69%.
The case for AbbVie
AbbVie's big headwind is the onslaught of biosimilar competition in Europe for its top-selling drug, Humira. Biosimilars will hit the U.S. market in 2023. But AbbVie has known for years that this threat was on the way and has built a strong lineup and pipeline in anticipation of a post-Humira world.
Cancer drug Imbruvica is the most important part of this strategy. Market researcher EvaluatePharma predicts that Imbruvica will become the No. 5 best-selling drug in the world by 2024, with sales more than doubling from 2018 levels. (By the way, Humira is projected to slip from No. 1 to No. 2 -- still pulling in an impressive $12.4 billion in 2024.)
Skyrizi, one of two drugs that AbbVie has groomed to be a successor to Humira, won FDA approval in April 2019. AbbVie thinks that Skyrizi will generate annual sales of around $5 billion by 2023. The company hopes to soon win approval for upadacitinib in treating rheumatoid arthritis. It could be an even bigger winner than Skyrizi over the long run, with projected peak annual sales of $6.5 billion.
In addition, several other current drugs and pipeline candidates could contribute nicely to AbbVie's growth. Orilissa is already approved for managing endometriosis pain and could add another approval in treating uterine fibroids. Sales are climbing for blood cancer drug Venclexta.
AbbVie plans to significantly reduce its reliance on Humira through its planned acquisition of Allergan. Assuming the transaction is finalized, Humira will account for less than 40% of AbbVie's total revenue compared to around 60% today.
Last but not least, there's AbbVie's dividend. It's hard not to like a dividend yield of nearly 6.3%. AbbVie's executives insist that the dividend will remain a top priority even with the company buying Allergan.
Better buy
I think that both AbbVie and Pfizer look like good long-term picks, and especially so for income-oriented investors. If I had to choose just one of these stocks, though, I'd go with AbbVie.
AbbVie's shares trade at only 7.3 times expected earnings. I think that valuation is too low considering the overall picture for the company. With its mouthwatering dividend yield, AbbVie stock doesn't have to rise much to deliver strong total returns. Although I have been skeptical about the Allergan acquisition, my view is that AbbVie still appears to be a bargain that should pay off over the long run.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) have a lot in common. There's also another common denominator for Pfizer and AbbVie: Both stocks are underperforming the broader market so far this year. The case for AbbVie AbbVie's big headwind is the onslaught of biosimilar competition in Europe for its top-selling drug, Humira. | With its mouthwatering dividend yield, AbbVie stock doesn't have to rise much to deliver strong total returns. Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) have a lot in common. There's also another common denominator for Pfizer and AbbVie: Both stocks are underperforming the broader market so far this year. | The case for AbbVie AbbVie's big headwind is the onslaught of biosimilar competition in Europe for its top-selling drug, Humira. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie and Pfizer. Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) have a lot in common. | With its mouthwatering dividend yield, AbbVie stock doesn't have to rise much to deliver strong total returns. Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) have a lot in common. There's also another common denominator for Pfizer and AbbVie: Both stocks are underperforming the broader market so far this year. |
24929.0 | 2019-07-20 00:00:00 UTC | 8 More Big Pharma Events in 2019 You Don't Want to Miss | ABBV | https://www.nasdaq.com/articles/8-more-big-pharma-events-in-2019-you-dont-want-to-miss-2019-07-20 | nan | nan | It's going to be an action-packed second half for a handful of big pharmaceutical companies, and perhaps the most interesting six-month stretch in Novartis' (NYSE: NVS) history. Recently launched therapies from the Swiss pharma giant and Pfizer (NYSE: PFE) will be closely watched for different reasons.
AbbVie (NYSE: ABBV) and Novartis are expecting important decisions from the Food and Drug Administration (FDA), and clinical trial readouts from Bristol-Myers Squibb (NYSE: BMY) and Merck (NYSE: MRK) could help their cancer immunotherapy stars shine even brighter. Even GlaxoSmithKline (NYSE: GSK) has a couple of late-stage trials that could deliver big wins for the company and its shareholders.
Image source: Getty Images.
Big oncology readouts ahead
Bristol-Myers Squibb will get its last chance to treat newly diagnosed non-small-cell lung cancer (NSCLC) patients with its immunotherapy combination of Opdivo and Yervoy. Last year the company tried to send an application to the FDA based on interim results from the CheckMate-227 study that showed patients with high tumor mutational burden, a measurement that Bristol concocted, responded well to Opdivo plus Yervoy.
The FDA wasn't interested in an application based on an endpoint that wasn't a specific goal at the study's outset, especially when the data wasn't particularly compelling. Meanwhile, oncologists are getting used to using standard chemotherapy plus Merck's Keytruda to treat first-line NSCLC thanks to outcome data that shows it reduced patients' risk of death by half compared to standard care.
Merck probably has the first-line NSCLC indication sewn up with Keytruda, but it's still battling it out with Tecentriq plus chemotherapy from Roche (NASDAQOTH: RHHBY) for two more important first-line indications: newly diagnosed small-cell lung cancer and triple-negative breast cancer. These are both difficult to treat, and patients need a new option. Before the end of 2019, we should see data from studies with Keytruda and chemotherapy for both indications.
GlaxoSmithKline is trying to put itself on the oncology map again with a chimeric antigen receptor-modified T-cell (CAR-T) therapy that trains patients' own immune cells to find and destroy cancer cells with BCMA on their surface. Glaxo's therapy is one of several BCMA directed treatments in late-stage development right now, so stellar results are a must.
Image source: Getty Images.
Other readouts on the way
Before the end of the year, we'll also get a chance to see if Glaxo's new HIV treatment, Dovato, has what it takes to beat the new market leader from Gilead Sciences (NASDAQ: GILD), called Biktarvy. Dovato earned approval in April, and so far it isn't exactly flying off the shelves.
In the third quarter, GlaxoSmithKline will present 96-week data from the pivotal studies that supported Dovato's approval. If its safety profile doesn't hold up against Biktarvy, Dovato is going to be awfully hard to market.
First-quarter sales of Novartis' heart failure drug, Entresto, jumped 85% over the previous-year period to an annualized $1.4 billion, thanks to evidence that giving patients the drug in the hospital significantly reduces rehospitalization risk. It could get another boost this year if the Paragon study shows it significantly reduces the risk of cardiac events for less severe cases than Entresto is used to treat at the moment.
Image source: Getty Images.
Big decisions
Annual sales of AbbVie's flagship rheumatoid arthritis treatment, Humira, peaked in 2018 just shy of $20 billion. Investors want to see the company's next-generation rheumatoid arthritis treatment, upadacitinib, earn approval with as few restrictions as possible, and avoid repeating the catastrophe Eli Lilly (NYSE: LLY) walked into with a drug of the same class, Olumiant. Because of a possible elevated risk of dangerous blood clots noted during clinical trials supporting Olumiant's application, the FDA only approved a dosage considered too low to be effective.
Age-related macular degeneration (AMD) is expected to affect 1.5 million Americans in 2020, making it the leading cause of vision loss among older adults. Global sales of Regeneron's (NASDAQ: REGN) AMD drug, Eylea, reached an annualized $7 billion during the first three months of 2019, which might be a high-water mark. Novartis is barreling toward this lucrative space with a candidate called brolucizumab.
Novartis used a priority review voucher to secure a shortened review of brolucizumab's application. Depending on the FDA's decision, Novartis could field its Eylea competitor before the end of the year.
There's no room for error with brolucizumab, because the clock is ticking. Low-priced biosimilar versions of Regeneron's Eylea should appear in the EU in 2025.
Image source: Getty Images.
New drug launches
More often than not, drugs touted as future blockbusters fail to achieve the expectations placed on them. Two ongoing commercial launches that investors want to keep an eye on in the second half come from Pfizer and, you guessed it, Novartis.
Pfizer's long-awaited oral transthyretin (TTR) stabilizer, Vyndamax, earned approval to treat patients with heart problems caused by TTR that keeps breaking up into amyloid fragments. Vyndamax doesn't appear as effective as Onpattro, an infusion from Alnylam (NASDAQ: ALNY), at knocking down TTR, but it's a lot more convenient. If Pfizer can leapfrog Alnylam in the TTR space, it could make raising money to develop RNA drugs like Alnylam's a lot more difficult.
Another RNA drug facing an existential crisis is Biogen's (NASDAQ: BIIB) Spinraza, a blockbuster treatment for a severe muscle-wasting disease called spinal muscular atrophy (SMA). Biogen's lead growth driver could be in trouble because a drug-pricing think tank has deemed Spinraza about four times more expensive than a recently approved gene therapy from Novartis, called Zolgensma.
Novartis wants to sell Zolgensma's with $2.1 million list price evenly over a five-year period, which is around the same as overall expenses for Spinraza maintenance treatment over the same amount of time. While a one-time gene therapy seems like a much-better deal than several injections of Spinraza each year for life, insurers are leery about Zolgensma's $2.1 million price tag because it puts them in an awkward position.
Novartis' plan is popular among health plan sponsors, which ultimately pay for these drugs. Unfortunately, it's much less popular among America's unique collection of middlemen that earn a living in the spaces between drugmakers and plan sponsors, neither of which are getting their way lately. The White House recently walked away from a plan to reduce the influence of intermediaries in the prescription drug supply chain.
If a giant like Novartis can't successfully commercialize Zolgensma, its peers will pour a lot less money into gene therapy development regardless of how these treatments benefit the patients who need them. All of these events are important, but if you only have time to watch one in order to see where the biopharmaceutical industry is heading, make it Zolgensma's commercial launch.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE: ABBV) and Novartis are expecting important decisions from the Food and Drug Administration (FDA), and clinical trial readouts from Bristol-Myers Squibb (NYSE: BMY) and Merck (NYSE: MRK) could help their cancer immunotherapy stars shine even brighter. Big decisions Annual sales of AbbVie's flagship rheumatoid arthritis treatment, Humira, peaked in 2018 just shy of $20 billion. Big oncology readouts ahead Bristol-Myers Squibb will get its last chance to treat newly diagnosed non-small-cell lung cancer (NSCLC) patients with its immunotherapy combination of Opdivo and Yervoy. | AbbVie (NYSE: ABBV) and Novartis are expecting important decisions from the Food and Drug Administration (FDA), and clinical trial readouts from Bristol-Myers Squibb (NYSE: BMY) and Merck (NYSE: MRK) could help their cancer immunotherapy stars shine even brighter. Big decisions Annual sales of AbbVie's flagship rheumatoid arthritis treatment, Humira, peaked in 2018 just shy of $20 billion. Big oncology readouts ahead Bristol-Myers Squibb will get its last chance to treat newly diagnosed non-small-cell lung cancer (NSCLC) patients with its immunotherapy combination of Opdivo and Yervoy. | AbbVie (NYSE: ABBV) and Novartis are expecting important decisions from the Food and Drug Administration (FDA), and clinical trial readouts from Bristol-Myers Squibb (NYSE: BMY) and Merck (NYSE: MRK) could help their cancer immunotherapy stars shine even brighter. Big decisions Annual sales of AbbVie's flagship rheumatoid arthritis treatment, Humira, peaked in 2018 just shy of $20 billion. First-quarter sales of Novartis' heart failure drug, Entresto, jumped 85% over the previous-year period to an annualized $1.4 billion, thanks to evidence that giving patients the drug in the hospital significantly reduces rehospitalization risk. | AbbVie (NYSE: ABBV) and Novartis are expecting important decisions from the Food and Drug Administration (FDA), and clinical trial readouts from Bristol-Myers Squibb (NYSE: BMY) and Merck (NYSE: MRK) could help their cancer immunotherapy stars shine even brighter. Big decisions Annual sales of AbbVie's flagship rheumatoid arthritis treatment, Humira, peaked in 2018 just shy of $20 billion. The FDA wasn't interested in an application based on an endpoint that wasn't a specific goal at the study's outset, especially when the data wasn't particularly compelling. |
24930.0 | 2019-07-19 00:00:00 UTC | IYH, ABBV, CI, BDX: Large Outflows Detected at ETF | ABBV | https://www.nasdaq.com/articles/iyh-abbv-ci-bdx%3A-large-outflows-detected-at-etf-2019-07-19 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares U.S. Healthcare ETF (Symbol: IYH) where we have detected an approximate $29.3 million dollar outflow -- that's a 1.4% decrease week over week (from 11,100,000 to 10,950,000). Among the largest underlying components of IYH, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.6%, Cigna Corp (Symbol: CI) is off about 1.1%, and Becton, Dickinson & Co (Symbol: BDX) is lower by about 0.3%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average:
Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $195.37. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of IYH, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.6%, Cigna Corp (Symbol: CI) is off about 1.1%, and Becton, Dickinson & Co (Symbol: BDX) is lower by about 0.3%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $195.37. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of IYH, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.6%, Cigna Corp (Symbol: CI) is off about 1.1%, and Becton, Dickinson & Co (Symbol: BDX) is lower by about 0.3%. For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $195.37. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of IYH, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.6%, Cigna Corp (Symbol: CI) is off about 1.1%, and Becton, Dickinson & Co (Symbol: BDX) is lower by about 0.3%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares U.S. Healthcare ETF (Symbol: IYH) where we have detected an approximate $29.3 million dollar outflow -- that's a 1.4% decrease week over week (from 11,100,000 to 10,950,000). For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $195.37. | Among the largest underlying components of IYH, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.6%, Cigna Corp (Symbol: CI) is off about 1.1%, and Becton, Dickinson & Co (Symbol: BDX) is lower by about 0.3%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares U.S. Healthcare ETF (Symbol: IYH) where we have detected an approximate $29.3 million dollar outflow -- that's a 1.4% decrease week over week (from 11,100,000 to 10,950,000). For a complete list of holdings, visit the IYH Holdings page » The chart below shows the one year price performance of IYH, versus its 200 day moving average: Looking at the chart above, IYH's low point in its 52 week range is $169.96 per share, with $204.83 as the 52 week high point — that compares with a last trade of $195.37. |
24931.0 | 2019-07-19 00:00:00 UTC | Investing in Chicago Stocks | ABBV | https://www.nasdaq.com/articles/investing-in-chicago-stocks-2019-07-19 | nan | nan | From its earliest days of incorporation back in the late 1830s, Chicago has been all about trade. The city cultivated that early trade focus and used it to become one of the most diverse business climates in the United States. If you're considering investing in Chicago stocks -- the publicly traded stocks of the businesses that have their headquarters in the Chicago metro area -- it's important to remember that.
Situated where the Chicago River meets Lake Michigan, Chicago's early trade centered around agriculture and transportation, taking the crops and other farm products produced in the region and sending them around the country and around the world. The economic hub eventually attracted businesses and industries of all kinds looking to take advantage of what the heart of America had to offer. For those who didn't find either U.S. coast conducive to their business efforts, the "Second City" became a natural alternative to set up shop.
Now the third largest city in the United States by population, Chicago has long served as a center of commerce for several Midwestern states, as well as numerous global businesses. Tourists from around the world visit the city looking for food, fun, and culture, while investors come looking for solid prospects for making money from companies big and small.
A view of the Chicago skyline from Lake Michigan. Image source: Getty Images.
When considering making investments in companies based in Chicago, the key is having a strong grasp of the basics. Let's take a look at some essential concepts everyone should know before investing in Chicago stocks:
What are Chicago stocks?
What are the largest Chicago stocks?
Who should be interested in investing in Chicago stocks?
How should you evaluate Chicago stocks?
What should investors in Chicago stocks be looking for?
What are the risks facing Chicago stocks?
What companies might come to Chicago?
Is now the time to buy Chicago stocks?
What are Chicago stocks?
Chicago's metro area is home to the headquarters of companies that are key players in multiple sectors. Companies with headquarters in the area are "Chicago stocks." Represented industries include auto manufacturing, biotech, business services, energy, fabricated metals, financial tech, food processing, freight, health services, information technology, manufacturing, medical technology, and plastics and chemicals development.
Agriculture was at the heart of Chicago's initial growth, and that can be seen in some of its biggest businesses today. When looking at yearly revenue, Archer Daniels Midland is the largest of several Chicago companies with a direct connection to agriculture. But ADM's diverse operations are really an example of the city as a whole.
The company's biggest role involves buying and transporting farmed crops from the region, as well as from around the world, and then turning them into a slew of products for both human and animal use. But ADM is also a major energy producer through its heavy involvement in the processing of some of those crops into ethanol. The company also makes a range of chemicals and oils for industrial use, including ingredients that go into personal-care products like soaps and skin creams. It even runs various commodity exchanges and provides crop insurance options for the farm producers it works with.
Robust commerce gave birth to the Chicago Mercantile Exchange, which was established in 1898 (initially to organize trade in butter and eggs) and eventually grew into a clearinghouse for the exchange of numerous commodities. Basically, the exchange offered a way for companies that needed to buy large quantities of wheat, corn, soybeans, various meat products, or hundreds of other tradeable goods an easier way to centralize and organize the purchases and the bidding on the materials coming in from thousands of producers. It also gave the producers (farmers) better access to companies and traders that wanted what they produced and a quick, efficient way to get it to them.
In the 1960s, the exchange added futures trading to its list of services. Traders in commodities, which often have volatile prices, will use futures trading to lock in prices for what they're going to buy and sell, well before the commodity is actually produced to better manage the risk from the volatility. A futures contract provides the farmer with predictable compensation for the crop, and the contract buyer ensures they will get enough materials to create their product at a known price they can build into their accounting.
In 2007, The Mercantile Exchange merged with the Chicago Board of Trade to form CME Group, one of the largest marketplaces for buying and selling shares, options, and futures related to stocks, bonds, and commodities in the world. It's similar to the NYSE and NASDAQ stock exchanges, but specializes in futures of all sorts, and even started trading cryptocurrencies in 2017. On average, CME Group handles about 3 billion contracts worth approximately $1 quadrillion annually (that total is equal to 15 times the gross domestic product (GDP) of the world).
The city's early investment in the growth of the Mercantile Exchange led to Chicago's dominating futures trading and derivatives. With a derivative investment, the investor doesn't own the underlying asset. Instead, he or she is betting on whether its value will go up or down.
The city's derivatives exchange community, which started with commodity futures trading at the Chicago Board of Trade in 1848, established it as a global financial center. Chicago now handles more than half of exchange-based derivatives trading in North America and about 20% of the world's derivatives trading market. That global share is twice as big as New York City's 10% share and about equal to all European exchanges combined.
What are the largest Chicago stocks?
Chicago may have the nickname Second City but it's home to several first-tier companies with international reach. There are different ways to judge the size of a company. Here are the top 10 publicly traded companies by revenue (another word for sales) in their respective fiscal 2018s that call the Chicago metro area home.
*Market cap as of June 29, 2019. **Sum of the latest four reported quarters. Data sources: Nasdaq.com and Google Finance.
The list changes a bit when you switch to a different metric geared toward stock trading. Here are the top 10 publicly traded companies by market cap (multiplying the number of tradable shares by the share price) that call the Chicago metro area home.
*Sum of the latest four reported quarters. **Market cap as of June 29, 2019. Data sources: Nasdaq.com and Google Finance.
Who should be interested in investing in Chicago stocks?
Billionaire Warren Buffett has always advocated that investors should stick to areas they know -- their "circle of competence" -- when deciding what companies to invest in. The reason is simple: The more you know about a company, the better your position to judge its prospects.
If the company is nearby, you're more likely to hear whether it's hiring or looking for new office space, for example, perhaps indicating business is doing well. If you use its products or services regularly, you're better able to judge whether it's doing a good job providing a product you like or services you need.
That's not to say you should move to Chicago so you can be a good investor in Chicago stocks. But it is to say that there are a lot of Chicago-based companies that make products you know well and use regularly, wherever you may live.
What are the odds that you or someone you know has visited a McDonald's restaurant in the past month? Did you take a flight somewhere recently? There's a very good chance that it was on a Boeing jet.
Have you used canola oil, cocoa powder, or wheat flour in your cooking? It's likely ADM had a hand in getting that product to your kitchen. Have an infant who gets Similac infant formula or a grandparent who's supplementing their diet with Ensure? Abbott Labs produced it.
Have you dipped an Oreo cookie in some milk as an afternoon snack or had a Ritz cracker with a smear of peanut butter? Mondelez made that possible. These are all Chicago-based companies.
Another basic rule of investing is to diversify. Owning stocks of companies of various types, sizes, and representing different market sectors insulates you better against market downturns, as not all companies go down for the same reasons. Investing in the wide range of Chicago-based stocks allows you to diversify.
If you were to put together a large-cap Chicago portfolio, it wouldn't represent a perfect cross section of the national economy (it's underweighted for tech and energy stocks and overweighted for financial services), but it would come pretty close. Spreading your investment risk is smart investing.
How should you evaluate Chicago stocks?
Evaluating Chicago stocks starts with following the same guidelines one would follow when considering any stock. You should be able to assess the financial position of a company and see what investors think about the stock and its potential by looking at a company's balance sheet and some common metrics like:
Trailing price-to-earnings ratio (P/E): This metric analyzes a company's earnings in relation to its share price. The earnings multiple (as it's also called) values a stock to see how cheap or expensive it's trading in relation to the earnings the company has generated over the trailing 12 months. The lower the ratio, the cheaper the stock. The average P/E for companies in the S&P 500 at the time of this writing is about 22. This is one of the most widely used relative valuation metrics and serves as an easy reference point for comparison. (Forward P/E, using estimated earnings, can also be looked at.)
Price-to-earnings-growth ratio (PEG): Investors often buy stocks based on the growth opportunities they see for the company. The PEG ratio measures a company's current earnings in relation to its price but also takes into account a company's growth potential. PEG is calculated by dividing the P/E ratio by the estimated earnings growth rate, usually looking out five years and estimated by analysts that follow the company. A PEG ratio below 1 means a stock is trading below its expected growth rate, which would imply it's undervalued. A PEG ratio above 2 would signal the stock price has exceeded the future growth rate and might be overvalued. Factors like the age of the company, the nature of its business, and how the estimates were determined can affect the accuracy of this figure as a predictor of a fair stock price, so be careful how you use it.
Profit margin: The profit margin is the money left over after paying all of the costs of running the business. To calculate it, divide net income by revenue. Generally, the higher the margin, the more profitable the company. Companies that increase their profit margin are controlling costs, either by squeezing efficiencies out of the business, adding new high-profit business segments, or cutting out unprofitable ventures.
Price-to-sales ratio (P/S): The price-to-sales ratio works better than P/E for early-stage companies that have yet to report earnings. To calculate P/S, simply divide a company's market capitalization -- the total shares outstanding times its share price -- by its revenue. For very-early-stage companies, you can use future expected sales in the calculation.
Using these metrics on Chicago stock McDonald's in June 2019, we find the company trades at a trailing P/E ratio of 27.48 (and forward P/E of 24.30), which are both just a bit higher than the S&P 500 average. Its PEG ratio is 2.82, which suggests the stock's price right now is overvalued compared to its growth projections. Its net profit margin at the end of April was 28.2%, which suggests a profitable company doing well.
Because McDonald's is a veteran company that has a long track record of earnings, its P/S ratio doesn't really provide a meaningful figure for evaluation. Taking the other metrics into account, though, the data suggests that McDonald's is doing well at the moment but may be priced a bit high compared to growth projections, and is therefore not a bargain investment.
What should investors in Chicago stocks be looking for?
Ask a stock analyst to identify what an investor should look for when considering a business in which to buy stock and a few things will jump right out:
Competitive advantage: A competitive advantage keeps a business ahead of the competition, and Chicago businesses have plenty. It could be the patents they hold (AbbVie, Motorola Solutions), the high cost of switching to a competitor (Northern Trust), complicated regulations that limit access to the market (Boeing, Exelon), or cost efficiencies (Allstate) that these companies know how to take advantage of. These companies have effectively created a moat around their financial fortresses that allow them to generate durable growth.
Cash aplenty: Cash is what makes a company work. It pays the bills and finances new growth projects. Companies with high debt and not much cash on the balance sheet or little cash flowing in are potential trouble. Free cash flow -- what's left over after funding operations and growth -- can be used to pay for share repurchases and dividends that make investors happy.
Strong leadership: Investors should like to see managers who invest right alongside them in the companies they operate. You can find more details on management's investment in their companies from a company's annual 10-K report. Company leaders with years of relevant experience also have been shown to make a difference. And managers who can work well with business partners add something extra to the equation.
Companies that fit two of the three factors could be solid investments. Ones that nail all three increase the chances that you've found a great investment.
A view of the Chicago skyline from the Chicago River. Image Source: Getty Images.
What are the risks facing Chicago stocks?
There are always risks to factor into your investment decision. These can include:
Management risks: This has to do with a company's day-to-day operations. Discontinuing a key product line, handling production costs poorly, or making an investment decision that affects a company's ability to repay its debts are all examples of how management decisions can affect a stock.
Sociopolitical risks: Political and/or social events like a terrorist attack, war, trade war, or an election can, directly and indirectly, affect financial markets and investor attitudes and outlooks.
Currency risk: Changes in the exchange rate between two relevant currencies can affect a company's bottom line, especially if it has a significant international presence and lots of foreign sales.
Interest-rate risk: Many companies finance their operations through short-term loans and the sale of bonds. A change in rates can make it more expensive (or cheaper) to operate and impact profits.
Inflation risk: Increases in the prices of goods and services can force a company to charge more to recoup the expense. Increase the price too much and you risk alienating customers to the point that they go elsewhere.
How a company manages these risks can make all the difference. For example, Chicago stock Caterpillar is one of the largest construction and mining equipment manufacturers in the world, with almost $55 billion in revenue over the past year. In the past 18 months, the company has had to deal with sociopolitical risks out of its control related to the U.S.-China trade war and increased tariffs on materials like steel. Because it uses so much steel, Caterpillar has had to make significant (and sometimes costly) adjustments to where it buys its steel to address the long-term risk.
Caterpillar has also seen its earnings affected by changes in currency value in countries where it does regular business. Economic slowdowns in China and Europe have dampened the value of their currencies. If the U.S. dollar's value strengthens, the revenue coming in from foreign clients loses some of its value.
The steady rise in interest rates this past year has had some effect on the housing market and business expansion plans, lowering demand for Caterpillar construction equipment. Management said it would be increasing prices 1% to 4% on equipment it sells in 2019 to account for some of these issues. Management projects that the strengthening U.S. economy and hoped-for interest-rate cuts can offset the price hikes without creating a drop in demand.
When it comes to Chicago stocks, there are risks that this particular city forces on a company doing business there. While Chicago's overall cost of living is about 1% below the national average -- which can make it attractive to a business with lots of locally based employees -- Forbes ranks Chicago 140th among 200 U.S. cities for the cost of doing business, indicating that factors like taxes, regulations, rent and leases, etc., can make it somewhat more expensive to operate a business there. Median household income for the metro area is $68,604, which puts it above the national average, and this implies that employees living and working there might expect higher-than-average wages.
What companies might come to Chicago?
The City of Broad Shoulders is centrally located between European and Asian markets and within the North American Free Trade zone (and its potential successor, the United States-Mexico-Canada Agreement zone). The metro area's economic output -- its gross domestic product -- is larger than that of many countries. Chicago's GDP of $609 billion would have ranked it 21st in the world, just behind No. 20 Saudi Arabia and ahead of No. 22 Argentina, according to a 2016 World Bank report.
Chicago's industrial mix is a close match for the nation's, with no single industry employing more than 12% of the workforce (just over 4 million people). The city is home to more than 400 major corporate headquarters, including 36 in the Fortune 500. These factors are part of why Chicago was one of four U.S. cities to be named on a list of "Cities of Opportunity" by PricewaterhouseCoopers in 2018. It received the designation for fostering economic innovation and "common wellbeing."
Like any large city, Chicago has its issues to wrestle with, and they can have some small effect on the companies that are based there. Issues like racial segregation, the disappearance of industrial jobs, and rising city/county budgets are all stressors that Chicago's metro area is working to address. It's important that the city does so if it wants to continue to attract new investment and keep the companies it has.
Chicago is making the effort to attract more tech companies, an underrepresented sector in the area. The city listed about 14,000 tech businesses and 341,000 tech workers in 2017, and it's working to grow that representation. As Silicon Valley becomes more expensive to operate in, cities with a lower cost of living, like Chicago, offer an alternative location for tech companies to set up shop that will attract the younger, tech-savvy workforce those companies want as employees.
Studies have shown that people under 35 with expertise in IT (information technology) prefer the slew of opportunities and attractions that cities feature and appreciate things like public transportation and a family-friendly atmosphere. Chicago offers that.
Among the better-known tech companies basing their headquarters in Chicago are the nation's leading online and mobile food-ordering and delivery marketplace Grubhub, e-commerce marketplace Groupon, public relations and earned media software company Cision, personalized clothing service Trunk Club, privately held parking-reservation service and app SpotHero, and privately held financial tech company Avant. The city announced in November 2018 that 16 local technology companies had added or would be be adding a combined 2,000 jobs in Chicago in 2018 and 2019. Look for more tech to set up shop in the Chicago metro area.
Is now the time to buy Chicago stocks?
If you look at some of the top stocks based in Chicago on an individual basis in the summer of 2019, buying them right now is admittedly a mixed bag. Boeing stock is down over serious issues with its 737 MAX plane; Kraft Heinz stock is down on issues including a writedown, an SEC probe and a slashed dividend; McDonald's stock is up in recent years because of some smart changes in strategy; AbbVie stock is down because it just offered to buy Allergan in a $63 billion deal and take on a lot of additional debt to do it; and United Airlines stock has suffered of late over economic issues with China.
If you already own shares of Boeing, Kraft Heinz, AbbVie, or United, you're probably not too pleased at the moment. If you're thinking of buying these stocks, the decreased price could present a good opportunity to get in.
The actual act of buying Chicago stocks can be as simple as setting up a brokerage account, either in-person or online, determining which stocks you want to purchase (an admittedly harder task), and placing your buy order. When determining the Chicago stocks to buy, the best plan really boils down to buying great companies and holding them for the long term. Patience plays a big role. The best investments don't need to be checked daily because they're solid companies with competitive advantages and strong leadership.
Chicago has created a unique identity for itself as a globally diverse economic powerhouse where top companies can operate and, in many cases, thrive. The populace has a Midwestern "can-do" attitude and they've built their city on a strong foundation and used that to fuel growth for the companies that have chosen Chicago as their home.
10 stocks we like better than Boeing
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Kris Kinkade has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CME Group. The Motley Fool recommends Grubhub. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It could be the patents they hold (AbbVie, Motorola Solutions), the high cost of switching to a competitor (Northern Trust), complicated regulations that limit access to the market (Boeing, Exelon), or cost efficiencies (Allstate) that these companies know how to take advantage of. Boeing stock is down over serious issues with its 737 MAX plane; Kraft Heinz stock is down on issues including a writedown, an SEC probe and a slashed dividend; McDonald's stock is up in recent years because of some smart changes in strategy; AbbVie stock is down because it just offered to buy Allergan in a $63 billion deal and take on a lot of additional debt to do it; and United Airlines stock has suffered of late over economic issues with China. If you already own shares of Boeing, Kraft Heinz, AbbVie, or United, you're probably not too pleased at the moment. | It could be the patents they hold (AbbVie, Motorola Solutions), the high cost of switching to a competitor (Northern Trust), complicated regulations that limit access to the market (Boeing, Exelon), or cost efficiencies (Allstate) that these companies know how to take advantage of. Boeing stock is down over serious issues with its 737 MAX plane; Kraft Heinz stock is down on issues including a writedown, an SEC probe and a slashed dividend; McDonald's stock is up in recent years because of some smart changes in strategy; AbbVie stock is down because it just offered to buy Allergan in a $63 billion deal and take on a lot of additional debt to do it; and United Airlines stock has suffered of late over economic issues with China. If you already own shares of Boeing, Kraft Heinz, AbbVie, or United, you're probably not too pleased at the moment. | Boeing stock is down over serious issues with its 737 MAX plane; Kraft Heinz stock is down on issues including a writedown, an SEC probe and a slashed dividend; McDonald's stock is up in recent years because of some smart changes in strategy; AbbVie stock is down because it just offered to buy Allergan in a $63 billion deal and take on a lot of additional debt to do it; and United Airlines stock has suffered of late over economic issues with China. It could be the patents they hold (AbbVie, Motorola Solutions), the high cost of switching to a competitor (Northern Trust), complicated regulations that limit access to the market (Boeing, Exelon), or cost efficiencies (Allstate) that these companies know how to take advantage of. If you already own shares of Boeing, Kraft Heinz, AbbVie, or United, you're probably not too pleased at the moment. | What companies might come to Chicago? It could be the patents they hold (AbbVie, Motorola Solutions), the high cost of switching to a competitor (Northern Trust), complicated regulations that limit access to the market (Boeing, Exelon), or cost efficiencies (Allstate) that these companies know how to take advantage of. Boeing stock is down over serious issues with its 737 MAX plane; Kraft Heinz stock is down on issues including a writedown, an SEC probe and a slashed dividend; McDonald's stock is up in recent years because of some smart changes in strategy; AbbVie stock is down because it just offered to buy Allergan in a $63 billion deal and take on a lot of additional debt to do it; and United Airlines stock has suffered of late over economic issues with China. |
24932.0 | 2019-07-18 00:00:00 UTC | 3 Top Dividend Stocks With Yields Over 4% | ABBV | https://www.nasdaq.com/articles/3-top-dividend-stocks-with-yields-over-4-2019-07-18 | nan | nan | Even with an improving economy, many are sounding the alarm that a downturn may be coming, leading the Federal Reserve to take the position there will be no rate hikes in the immediate future. Dicey economic times make an income-producing portfolio a solid choice because, over extended periods, stocks that pay dividends have typically outperformed those that don't.
Stocks with above-average yields are good candidates for achieving the best performance, and three Motley Fool contributors have picked AT&T (NYSE: T), AbbVie (NYSE: ABBV), and Harley-Davidson (NYSE: HOG) as stocks with dividends above 4% that could pay off in the long term.
Image source: Getty Images.
A fantastic dividend profile and overlooked growth potential
Keith Noonan (AT&T): With a yield of roughly 6%, AT&T has a top dividend in the telecommunications industry, but is it actually a top stock? The company's share price has climbed just 43% over the last decade and trades down roughly 20% over the last three years -- even with a nice rally in the first half of 2019. Factor the dividend in, and the stock has still lagged the total return of the S&P 500 index over the last one-year, five-year, and 10-year periods. But the telecom giant actually looks like a smart buy despite some weaknesses in the business that have contributed to that soggy performance.
Subscriber declines on the heels of its big acquisition of DIRECTV in 2015 and pricing pressure in the mobile space have clearly squeezed the company. Significant challenges remain, but these factors are also causing some investors to overlook the appeal of AT&T at present.
In addition to its big yield, 35-year history of annual payout growth, and safe payout ratios even as the company uses cash flow to pay down debt, AT&T stock has underappreciated comeback potential. If used wisely, the business' potent combination of media content and distribution channels, an emerging digital ad business with big potential, and strength in 5G and mobile wireless could power returns that far exceed the market's expectations.
Shares have climbed roughly 17% year to date. But because it's trading at just 9.5 times this year's expected earnings, AT&T is still a relatively low-risk stock that offers a great dividend and the chance to see share-price gains that shock the market if some of the company's growth bets pay off.
A Dividend Aristocrat with an unusually high yield
George Budwell (AbbVie): Dividend Aristocrats rarely sport yields on par with junk bonds, but AbbVie isn't your prototypical blue chip income stock. It's a Dividend Aristocrat by virtue of its former parent company, Abbott Laboratories, which spun off the biotech in 2013, seemingly to protect itself from Humira's forthcoming loss of exclusivity.
AbbVie has kept up Abbott's rich tradition of doling out regular hikes to its dividend, resulting in a sky-high yield that currently stands at a breathtaking 6%. That's the highest yield among all large-cap biopharma stocks at the moment. And if that wasn't enough to persuade you to consider AbbVie as a passive income vehicle, its shares are also trading at less than eight times projected earnings -- one of the lowest valuations among all dividend-paying healthcare stocks.
There are two noteworthy risk factors to consider with this high-yield dividend play. First, the biotech recently announced a $63 billion acquisition of Botox maker Allergan (NYSE: AGN), which will cause its debt load to balloon to an unsightly $73 billion once this deal closes early next year. Second, the biopharma's strategy to reduce its debt load post-transaction is predicated on the notion that Humira will remain a healthy cash cow in the coming decade. That's not a certainty. Humira's sales, after all, took a big hit following the introduction of biosimilars in Europe.
All told, AbbVie's enormous dividend yield and rock-bottom valuation should appeal to most income investors, but shareholders will definitely want to keep a close eye on its underlying fundamentals in the years to come.
Betting on a turnaround
Rich Duprey (Harley-Davidson): Motorcycle giant Harley-Davidson is in the midst of a turnaround, one that admittedly hasn't gained any traction yet in terms of new sales. It is in a four-year sales slump that will likely stretch to five before it begins to see any gains.
While that makes it hard to reconcile as a stock to buy, Harley is a very profitable business that has fiercely protected its margins to not devalue its brand. Although I've been critical at times of the motorcycle maker's policies, there are very early signs that Harley may eventually turn it around. And because the market is pricing the motorcycle company that owns half the market as if it were practically going out of business, its dividend -- yielding 4.1% at current prices -- makes it an attractive stock for income investors who have the patience to see if its strategy works.
Harley sales in the U.S. are falling. But it still records gains in foreign markets, and it wants to make foreign sales account for half of its total (today they're around 33%). It is building new, smaller motorcycles that international markets may find attractive, such as its recently revealed 336-cc bikes it will introduce into China. That may be the smallest motorcycle it's ever made, but one that may find willing buyers.
Harley-Davidson stock trades at 12 times trailing earnings, nine times this year's estimates, and at the bargain basement rate of 10 times the free cash flow it produces. The motorcycle king won't be a growth star, despite shares being up 7% year to date, but for those with an appropriately long investing horizon, it could be a good choice to rev up your income portfolio.
10 stocks we like better than AT&T
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George Budwell has no position in any of the stocks mentioned. Keith Noonan owns shares of AT&T. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | All told, AbbVie's enormous dividend yield and rock-bottom valuation should appeal to most income investors, but shareholders will definitely want to keep a close eye on its underlying fundamentals in the years to come. Stocks with above-average yields are good candidates for achieving the best performance, and three Motley Fool contributors have picked AT&T (NYSE: T), AbbVie (NYSE: ABBV), and Harley-Davidson (NYSE: HOG) as stocks with dividends above 4% that could pay off in the long term. A Dividend Aristocrat with an unusually high yield George Budwell (AbbVie): Dividend Aristocrats rarely sport yields on par with junk bonds, but AbbVie isn't your prototypical blue chip income stock. | A Dividend Aristocrat with an unusually high yield George Budwell (AbbVie): Dividend Aristocrats rarely sport yields on par with junk bonds, but AbbVie isn't your prototypical blue chip income stock. Stocks with above-average yields are good candidates for achieving the best performance, and three Motley Fool contributors have picked AT&T (NYSE: T), AbbVie (NYSE: ABBV), and Harley-Davidson (NYSE: HOG) as stocks with dividends above 4% that could pay off in the long term. AbbVie has kept up Abbott's rich tradition of doling out regular hikes to its dividend, resulting in a sky-high yield that currently stands at a breathtaking 6%. | Stocks with above-average yields are good candidates for achieving the best performance, and three Motley Fool contributors have picked AT&T (NYSE: T), AbbVie (NYSE: ABBV), and Harley-Davidson (NYSE: HOG) as stocks with dividends above 4% that could pay off in the long term. A Dividend Aristocrat with an unusually high yield George Budwell (AbbVie): Dividend Aristocrats rarely sport yields on par with junk bonds, but AbbVie isn't your prototypical blue chip income stock. AbbVie has kept up Abbott's rich tradition of doling out regular hikes to its dividend, resulting in a sky-high yield that currently stands at a breathtaking 6%. | A Dividend Aristocrat with an unusually high yield George Budwell (AbbVie): Dividend Aristocrats rarely sport yields on par with junk bonds, but AbbVie isn't your prototypical blue chip income stock. Stocks with above-average yields are good candidates for achieving the best performance, and three Motley Fool contributors have picked AT&T (NYSE: T), AbbVie (NYSE: ABBV), and Harley-Davidson (NYSE: HOG) as stocks with dividends above 4% that could pay off in the long term. AbbVie has kept up Abbott's rich tradition of doling out regular hikes to its dividend, resulting in a sky-high yield that currently stands at a breathtaking 6%. |
24933.0 | 2019-07-16 00:00:00 UTC | Commit To Purchase AbbVie At $40, Earn 3.2% Using Options | ABBV | https://www.nasdaq.com/articles/commit-to-purchase-abbvie-at-%2440-earn-3.2-using-options-2019-07-16 | nan | nan | Investors eyeing a purchase of AbbVie Inc (Symbol: ABBV) stock, but tentative about paying the going market price of $69.59/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2021 put at the $40 strike, which has a bid at the time of this writing of $1.29. Collecting that bid as the premium represents a 3.2% return against the $40 commitment, or a 2.1% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Selling a put does not give an investor access to ABBV's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $40 strike if doing so produced a better outcome than selling at the going market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless AbbVie Inc sees its shares fall 42.5% and the contract is exercised (resulting in a cost basis of $38.71 per share before broker commissions, subtracting the $1.29 from $40), the only upside to the put seller is from collecting that premium for the 2.1% annualized rate of return.
Below is a chart showing the trailing twelve month trading history for AbbVie Inc, and highlighting in green where the $40 strike is located relative to that history:
The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2021 put at the $40 strike for the 2.1% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for AbbVie Inc (considering the last 251 trading day closing values as well as today's price of $69.59) to be 32%. For other put options contract ideas at the various different available expirations, visit the ABBV Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Tuesday, the put volume among S&P 500 components was 1.18M contracts, with call volume at 1.18M, for a put:call ratio of 0.70 so far for the day, which is above normal compared to the long-term median put:call ratio of .65. In other words, if we look at the number of call buyers and then use the long-term median to project the number of put buyers we'd expect to see, we're actually seeing more put buyers than expected out there in options trading so far today. Find out which 15 call and put options traders are talking about today.
Top YieldBoost Puts of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors eyeing a purchase of AbbVie Inc (Symbol: ABBV) stock, but tentative about paying the going market price of $69.59/share, might benefit from considering selling puts among the alternative strategies at their disposal. Below is a chart showing the trailing twelve month trading history for AbbVie Inc, and highlighting in green where the $40 strike is located relative to that history: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2021 put at the $40 strike for the 2.1% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for AbbVie Inc (considering the last 251 trading day closing values as well as today's price of $69.59) to be 32%. | Below is a chart showing the trailing twelve month trading history for AbbVie Inc, and highlighting in green where the $40 strike is located relative to that history: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2021 put at the $40 strike for the 2.1% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for AbbVie Inc (considering the last 251 trading day closing values as well as today's price of $69.59) to be 32%. Investors eyeing a purchase of AbbVie Inc (Symbol: ABBV) stock, but tentative about paying the going market price of $69.59/share, might benefit from considering selling puts among the alternative strategies at their disposal. | Below is a chart showing the trailing twelve month trading history for AbbVie Inc, and highlighting in green where the $40 strike is located relative to that history: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2021 put at the $40 strike for the 2.1% annualized rate of return represents good reward for the risks. Investors eyeing a purchase of AbbVie Inc (Symbol: ABBV) stock, but tentative about paying the going market price of $69.59/share, might benefit from considering selling puts among the alternative strategies at their disposal. Selling a put does not give an investor access to ABBV's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. | Investors eyeing a purchase of AbbVie Inc (Symbol: ABBV) stock, but tentative about paying the going market price of $69.59/share, might benefit from considering selling puts among the alternative strategies at their disposal. Below is a chart showing the trailing twelve month trading history for AbbVie Inc, and highlighting in green where the $40 strike is located relative to that history: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2021 put at the $40 strike for the 2.1% annualized rate of return represents good reward for the risks. Selling a put does not give an investor access to ABBV's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. |
24934.0 | 2019-07-13 00:00:00 UTC | Better Buy: AbbVie vs. Merck | ABBV | https://www.nasdaq.com/articles/better-buy%3A-abbvie-vs.-merck-2019-07-13 | nan | nan | Big pharma stocks AbbVie (NYSE: ABBV) and Merck (NYSE: MRK) are on very different paths right now. With its top-selling drug Humira under pressure from biosimilars, AbbVie has struggled mightily. Meanwhile, Merck's shares continue to rise, fueled largely by rising sales for its blockbuster cancer immunotherapy Keytruda.
Merck's upward momentum and AbbVie's malaise might make you think that the decision between these two stocks is an easy one to make. But there's a lot to consider as you choose between AbbVie and Merck. Here's what you need to know about these two drug stocks.
Image source: Getty Images.
The case for AbbVie
Dividends, valuation, and an opportunity for generating meaningful growth. Those are the three primary reasons investors should seriously consider buying AbbVie stock right now.
Let's start with the dividend. AbbVie's dividend yield currently stands at nearly 5.9%. Who wouldn't like that mouthwatering yield? The company has a strong track record of increasing its dividend to boot.
One reason why AbbVie's dividend is so high is that its share price has dropped. This decline, however, has made the stock's valuation really attractive. AbbVie's shares trade at just over 7.5 times expected earnings, making AbbVie one of the cheapest big pharma stocks on the market.
Despite the long-anticipated sales decline for Humira, AbbVie will almost certainly deliver overall revenue and earnings growth over the next several years. The company has three products already on the market that should enjoy strong sales growth: cancer drugs Imbruvica and Venclexta, endometriosis pain drug Orilissa, and new immunology drug Skyrizi.
Even better, though, AbbVie awaits regulatory approval of upadacitinib in treating rheumatoid arthritis. The drug beat Humira in a head-to-head comparison in late-stage clinical testing. Upadacitinib should be on track to become AbbVie's next huge success story.
What about AbbVie's move to acquire Allergan? Sure, many investors view this deal as a big mistake for AbbVie. But buying Allergan definitely will reduce AbbVie's dependence on Humira. The acquisition boosts AbbVie's revenue and earnings growth prospects, even with some uncertainty for some of Allergan's top products. And AbbVie should be able to keep the nice dividends flowing even as it pays down the debt incurred with financing the transaction.
The case for Merck
What are the top three arguments for buying Merck? Keytruda, Keytruda, and Keytruda.
Merck's powerful immunotherapy is on track to become the top-selling drug in the world. Market researcher EvaluatePharma projects that Keytruda's sales will reach $17 billion, more than double the $7.2 billion generated in 2018.
Since 2014, Keytruda has picked up 21 FDA approvals for various types of cancer, including its most recent approval in treating metastatic small-cell lung cancer. Merck hopes to add at least another half dozen approved indications in the future.
There are more good things for Merck beyond Keytruda, though. Merck partnered with Japanese drugmaker Eisai to develop and market cancer drug Lenvima. The drug is currently approved for treating kidney cancer, liver cancer, and thyroid cancer. Merck also teamed up with AstraZeneca to commercialize Lynparza, which is approved for treating breast cancer and ovarian cancer.
In addition, Merck's vaccines business continues to perform very well. HPV vaccine Gardasil is on track to generate over $3 billion in sales this year. Merck also has a promising pneumococcal vaccine in late-stage clinical testing.
Merck's dividend currently yields nearly 2.6%. Wall Street analysts project average annual earnings growth for Merck of nearly 10% over the next five years. With the company's solid dividend thrown in, Merck should be able to provide investors with an attractive total return if those projections are on target.
Better buy
Even though AbbVie doesn't get much respect right now, I actually think it's the better pick than Merck over the long run. AbbVie is simply too cheap to ignore.
I admit that I was surprised by AbbVie's decision to acquire Allergan. But while I still think the company could have found smarter buyout candidates, my skepticism about the deal has diminished considerably.
With its fantastic dividend yield, AbbVie doesn't have to deliver much in the way of earnings growth to allow the stock's total return to reach double-digit percentages. With the company less dependent on Humira than ever before, I think AbbVie isn't nearly as risky as it might seem.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The acquisition boosts AbbVie's revenue and earnings growth prospects, even with some uncertainty for some of Allergan's top products. With its fantastic dividend yield, AbbVie doesn't have to deliver much in the way of earnings growth to allow the stock's total return to reach double-digit percentages. Big pharma stocks AbbVie (NYSE: ABBV) and Merck (NYSE: MRK) are on very different paths right now. | Big pharma stocks AbbVie (NYSE: ABBV) and Merck (NYSE: MRK) are on very different paths right now. Despite the long-anticipated sales decline for Humira, AbbVie will almost certainly deliver overall revenue and earnings growth over the next several years. With its top-selling drug Humira under pressure from biosimilars, AbbVie has struggled mightily. | Big pharma stocks AbbVie (NYSE: ABBV) and Merck (NYSE: MRK) are on very different paths right now. AbbVie's shares trade at just over 7.5 times expected earnings, making AbbVie one of the cheapest big pharma stocks on the market. With its fantastic dividend yield, AbbVie doesn't have to deliver much in the way of earnings growth to allow the stock's total return to reach double-digit percentages. | Sure, many investors view this deal as a big mistake for AbbVie. But buying Allergan definitely will reduce AbbVie's dependence on Humira. Big pharma stocks AbbVie (NYSE: ABBV) and Merck (NYSE: MRK) are on very different paths right now. |
24935.0 | 2019-07-11 00:00:00 UTC | ITOT, ABBV, GE, AXP: Large Outflows Detected at ETF | ABBV | https://www.nasdaq.com/articles/itot-abbv-ge-axp%3A-large-outflows-detected-at-etf-2019-07-11 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core S&P Total U.S. Stock Market ETF (Symbol: ITOT) where we have detected an approximate $118.7 million dollar outflow -- that's a 0.5% decrease week over week (from 319,300,000 to 317,550,000). Among the largest underlying components of ITOT, in trading today AbbVie Inc (Symbol: ABBV) is off about 0.7%, General Electric Co (Symbol: GE) is off about 0.7%, and American Express Co. (Symbol: AXP) is lower by about 0.2%. For a complete list of holdings, visit the ITOT Holdings page » The chart below shows the one year price performance of ITOT, versus its 200 day moving average:
Looking at the chart above, ITOT's low point in its 52 week range is $53.12 per share, with $68.02 as the 52 week high point — that compares with a last trade of $67.78. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of ITOT, in trading today AbbVie Inc (Symbol: ABBV) is off about 0.7%, General Electric Co (Symbol: GE) is off about 0.7%, and American Express Co. (Symbol: AXP) is lower by about 0.2%. For a complete list of holdings, visit the ITOT Holdings page » The chart below shows the one year price performance of ITOT, versus its 200 day moving average: Looking at the chart above, ITOT's low point in its 52 week range is $53.12 per share, with $68.02 as the 52 week high point — that compares with a last trade of $67.78. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of ITOT, in trading today AbbVie Inc (Symbol: ABBV) is off about 0.7%, General Electric Co (Symbol: GE) is off about 0.7%, and American Express Co. (Symbol: AXP) is lower by about 0.2%. For a complete list of holdings, visit the ITOT Holdings page » The chart below shows the one year price performance of ITOT, versus its 200 day moving average: Looking at the chart above, ITOT's low point in its 52 week range is $53.12 per share, with $68.02 as the 52 week high point — that compares with a last trade of $67.78. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of ITOT, in trading today AbbVie Inc (Symbol: ABBV) is off about 0.7%, General Electric Co (Symbol: GE) is off about 0.7%, and American Express Co. (Symbol: AXP) is lower by about 0.2%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core S&P Total U.S. Stock Market ETF (Symbol: ITOT) where we have detected an approximate $118.7 million dollar outflow -- that's a 0.5% decrease week over week (from 319,300,000 to 317,550,000). For a complete list of holdings, visit the ITOT Holdings page » The chart below shows the one year price performance of ITOT, versus its 200 day moving average: Looking at the chart above, ITOT's low point in its 52 week range is $53.12 per share, with $68.02 as the 52 week high point — that compares with a last trade of $67.78. | Among the largest underlying components of ITOT, in trading today AbbVie Inc (Symbol: ABBV) is off about 0.7%, General Electric Co (Symbol: GE) is off about 0.7%, and American Express Co. (Symbol: AXP) is lower by about 0.2%. For a complete list of holdings, visit the ITOT Holdings page » The chart below shows the one year price performance of ITOT, versus its 200 day moving average: Looking at the chart above, ITOT's low point in its 52 week range is $53.12 per share, with $68.02 as the 52 week high point — that compares with a last trade of $67.78. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). |
24936.0 | 2019-07-10 00:00:00 UTC | Ex-Dividend Reminder: Becton, Dickinson, Abbott Laboratories and AbbVie | ABBV | https://www.nasdaq.com/articles/ex-dividend-reminder%3A-becton-dickinson-abbott-laboratories-and-abbvie-2019-07-10 | nan | nan | Looking at the universe of stocks we cover at Dividend Channel, on 7/12/19, Becton, Dickinson & Co (Symbol: BDXA), Abbott Laboratories (Symbol: ABT), and AbbVie Inc (Symbol: ABBV) will all trade ex-dividend for their respective upcoming dividends. Becton, Dickinson & Co will pay its quarterly dividend of $0.7656 on 8/1/19, Abbott Laboratories will pay its quarterly dividend of $0.32 on 8/15/19, and AbbVie Inc will pay its quarterly dividend of $1.07 on 8/15/19. As a percentage of BDXA's recent stock price of $62.27, this dividend works out to approximately 1.23%, so look for shares of Becton, Dickinson & Co to trade 1.23% lower — all else being equal — when BDXA shares open for trading on 7/12/19. Similarly, investors should look for ABT to open 0.37% lower in price and for ABBV to open 1.49% lower, all else being equal.
Below are dividend history charts for BDXA, ABT, and ABBV, showing historical dividends prior to the most recent ones declared.
Becton, Dickinson & Co (Symbol: BDXA):
Abbott Laboratories (Symbol: ABT):
AbbVie Inc (Symbol: ABBV):
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 4.92% for Becton, Dickinson & Co, 1.49% for Abbott Laboratories, and 5.98% for AbbVie Inc.
In Wednesday trading, Becton, Dickinson & Co shares are currently up about 0.3%, Abbott Laboratories shares are up about 0.5%, and AbbVie Inc shares are up about 0.5% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | If they do continue, the current estimated yields on annualized basis would be 4.92% for Becton, Dickinson & Co, 1.49% for Abbott Laboratories, and 5.98% for AbbVie Inc. Looking at the universe of stocks we cover at Dividend Channel, on 7/12/19, Becton, Dickinson & Co (Symbol: BDXA), Abbott Laboratories (Symbol: ABT), and AbbVie Inc (Symbol: ABBV) will all trade ex-dividend for their respective upcoming dividends. Becton, Dickinson & Co will pay its quarterly dividend of $0.7656 on 8/1/19, Abbott Laboratories will pay its quarterly dividend of $0.32 on 8/15/19, and AbbVie Inc will pay its quarterly dividend of $1.07 on 8/15/19. | Looking at the universe of stocks we cover at Dividend Channel, on 7/12/19, Becton, Dickinson & Co (Symbol: BDXA), Abbott Laboratories (Symbol: ABT), and AbbVie Inc (Symbol: ABBV) will all trade ex-dividend for their respective upcoming dividends. Becton, Dickinson & Co will pay its quarterly dividend of $0.7656 on 8/1/19, Abbott Laboratories will pay its quarterly dividend of $0.32 on 8/15/19, and AbbVie Inc will pay its quarterly dividend of $1.07 on 8/15/19. Becton, Dickinson & Co (Symbol: BDXA): Abbott Laboratories (Symbol: ABT): AbbVie Inc (Symbol: ABBV): In general, dividends are not always predictable, following the ups and downs of company profits over time. | Looking at the universe of stocks we cover at Dividend Channel, on 7/12/19, Becton, Dickinson & Co (Symbol: BDXA), Abbott Laboratories (Symbol: ABT), and AbbVie Inc (Symbol: ABBV) will all trade ex-dividend for their respective upcoming dividends. Becton, Dickinson & Co will pay its quarterly dividend of $0.7656 on 8/1/19, Abbott Laboratories will pay its quarterly dividend of $0.32 on 8/15/19, and AbbVie Inc will pay its quarterly dividend of $1.07 on 8/15/19. Becton, Dickinson & Co (Symbol: BDXA): Abbott Laboratories (Symbol: ABT): AbbVie Inc (Symbol: ABBV): In general, dividends are not always predictable, following the ups and downs of company profits over time. | If they do continue, the current estimated yields on annualized basis would be 4.92% for Becton, Dickinson & Co, 1.49% for Abbott Laboratories, and 5.98% for AbbVie Inc. Looking at the universe of stocks we cover at Dividend Channel, on 7/12/19, Becton, Dickinson & Co (Symbol: BDXA), Abbott Laboratories (Symbol: ABT), and AbbVie Inc (Symbol: ABBV) will all trade ex-dividend for their respective upcoming dividends. Becton, Dickinson & Co will pay its quarterly dividend of $0.7656 on 8/1/19, Abbott Laboratories will pay its quarterly dividend of $0.32 on 8/15/19, and AbbVie Inc will pay its quarterly dividend of $1.07 on 8/15/19. |
24937.0 | 2019-07-09 00:00:00 UTC | The S&P 500’s 5 Best Highest-Yielding Dividend Stocks | ABBV | https://www.nasdaq.com/articles/the-sp-500s-5-best-highest-yielding-dividend-stocks-2019-07-09 | nan | nan | There’s nothing more satisfying that getting money for doing nothing. That’s why dividend stocks hold so much appeal for portfolios. After a one-time investment, top dividend stocks will pay you year in and year out, for doing nothing except holding them. This has to be one of the greatest forces in all of investing. And everyone likes getting money for free.
To that end, high-yielding dividend stocks could be an income seeker’s or retiree’s best friend.
By focusing on those stocks with above-average yields, investors can truly supercharge their current income. The best part is that many of the highest-yielding dividend stocks in the S&P 500 aren’t exactly risky names. We’re talking huge companies with plenty of cash flows and earnings to back-up those payouts.
The truth is, there are plenty of big-time stocks that are producing some serious income for their shareholders. Here are five of the best high-yielding dividend stocks in the S&P 500.
Macerich Company (MAC)
Dividend Yield: 9%
Source: Shutterstock
With a nearly 9% yield, Macerich (NYSE:) tops the list as one of the highest-yielding dividend stocks in the S&P 500. That high yield can be explained in two ways: For starters, MAC is a real estate investment trust (REIT). As a REIT, the firm is required to pay out the bulk of its cash flows to investors as dividends in order to take advantage of lucrative tax breaks.
The second reason is that Macerich is a retail real estate owner — specifically a mall owner. As e-commerce has taken hold, stocks like MAC have taken it on the chin.
Today, MAC stock sits at new eight-year lows.
This could be a prime time to load up on such a high-yielding dividend stock. The reason is that MAC doesn’t own slouch malls. Yes, junky Class B malls are dying, but premium Class A shopping malls are thriving. MAC owns 48 of these high-end malls and they continue to see high occupancy rates — over 95% — and sales per square foot — .
Meanwhile, the firm continues to change its tenant mix to involve more experiences, dining and entertainment options. This has only boosted traffic and sales further.
The point is, MAC is being unfairly cast aside with the lower mall operators. This has shown up in its ability to boost critical funds from operations (FFO) measures over the retail Armageddon. It has also continued to as well as pay special ones.
All in all, Macerich is one high-yielding dividend stock to snag-up.
Iron Mountain Inc (IRM)
Dividend Yield: 7.64%
Source:
Like Macerich, Iron Mountain (NYSE:) is also a REIT, but IRM is a tad bit different. The firm makes its money by owning records and data storage facilities around the world. In fact, Iron Mountain is the biggest provider of such facilities with more than 1,400 different locations.
It turns out this is an incredibly profitable and needed niche. Key customers include nearly everyone in the Fortune 1000 as well as various government organizations. With retention rates as high as 98%, IRM is able to pull in some hefty cash flows from the “rent” it charges these customers. it was able to grow its total FFO by nearly 19% and boost its dividend by over 6%.
The best part is that Iron Mountain continues to evolve. It’s no secret that digital records and data creation is growing by leaps and bounds. To this end, IRM has expanded in datacenter, cloud and digital hard drive access for its clients.
Given its leadership position in physical document storage, the firm has had great success in upselling these digital products to customers. And with higher margins for cloud storage, IRM should be able to keep the growth coming for years.
And yet, because of its quirky nature, investors don’t really pay too much attention to Iron Mountain. That fact provides it with a whopping 7.64% dividend yield.
Philip Morris International (PM)
Dividend Yield: 5.66%
Source:
We all know smoking is dying a quick death here in the United States. Even e-cigarettes are getting the evil eye from regulators, which is just fine for tobacco stock Philip Morris International (NYSE:).
The key for PM is the “international” in its name. The firm operates and sells tobacco in over 180 countries and territories with the U.S. not being one of them. Emerging markets such as Indonesia, Russia, China, and India make up the bulk of the firms’ revenues.
And those revenues continue to rise as smoking still carries some “cool” factor in these regions and is considered a small luxury. All in all, PM sold more than of tobacco last year — a 3.1% year-over-year jump.
Philip Morris’ future looks rosy as well.
Big tobacco enjoys some big pricing power. Nicotine is an addictive substance and PM is able to pass on price increases to cover costs to consumers pretty easily. Secondly, the firm’s IQOS heated-tobacco delivery system is seeing some very impressive numbers. Shipments for IQOS jumped 20% to reach 11.5 billion units in the firm’s most recent quarter. All of this continues to strengthen the firm’s cash flows, bottom line, and dividend prowess.
The reality is, PM is one of the highest yielding dividend stocks because it’s a hated vice firm. Not because fundamentals are bad.
AbbVie (ABBV)
Dividend Yield: 5.71%
Source: Shutterstock
The giant pharmaceutical firms have long been great dividend stocks. This includes biotech king AbbVie (NASDAQ:). Driving that fact has been its blockbuster drug Humira.
Last year alone, the autoimmune-disease medication brought in — an increase of 8.2% over 2017’s numbers. The drug has continued to drive ABBV’s dividend — currently at almost 6%.
The problem is, Humira is facing the proverbial patent cliff sooner than later. Given that the drug is responsible for the bulk of AbbVie’s revenues, this cliff shouldn’t be taken lightly. And that’s one of the reasons why the dividend stocks yield is so high.
However, ABBV has a plan to replace that missing revenue. To begin with, the fellow biotech rival Allergan (NYSE:). AGN features hits like Botox and other blockbusters in its umbrella. Meanwhile, AbbVie has recently scored several approvals that could turn into real cash cows over time. Add in its rich pipeline that is now more robust from the AGN buy and you have a recipe for continued cash flows.
For investors, there’s plenty of potential in the dividend stock and you can grab that potential at a very high yield.
Williams (WMB)
Dividend Yield: 5.35%
Source: Shutterstock
Pipeline firms have often been called the “toll roads of the energy sector.” That’s because they are paid on the volume of oil and natural gas flowing through their systems. After a few years of simplification, the sector is now back to those roots. That includes top pipeline firm Williams (NYSE:).
WMB owns plenty of top-notch in key areas such as the Marcellus shale and the DJ Basin. These assets feature plenty of cash flows tied to their volumes. This provides less risk for Williams as many of these assets are paid via so-called “take or pay” contracts. And WMB’s continues to add capacity and expansions to these prime pipelines and gathering systems. This will help expand WMB’s cash flows further down the road.
These moves seem to be working.
Last quarter, WMB saw a big to its quarter-over-quarter cash flow from operations, and a big 8% jump in its distributable cash flows. With that, management expects to be able to grow its dividend payout by between 10% and 15% this year. That’s pretty impressive considering that WMB already yields 5.35%. With a full slate of expansion projects for the next few years, Williams should be able to keep the growth coming for years to come.
For investors, pipelines have historically been some of the best dividend stocks. WMB is continuing that tradition.
At the time of writing, Aaron Levitt did not hold a position in any stock mentioned.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (ABBV) Dividend Yield: 5.71% Source: Shutterstock The giant pharmaceutical firms have long been great dividend stocks. This includes biotech king AbbVie (NASDAQ:). The drug has continued to drive ABBV’s dividend — currently at almost 6%. | AbbVie (ABBV) Dividend Yield: 5.71% Source: Shutterstock The giant pharmaceutical firms have long been great dividend stocks. This includes biotech king AbbVie (NASDAQ:). The drug has continued to drive ABBV’s dividend — currently at almost 6%. | AbbVie (ABBV) Dividend Yield: 5.71% Source: Shutterstock The giant pharmaceutical firms have long been great dividend stocks. This includes biotech king AbbVie (NASDAQ:). The drug has continued to drive ABBV’s dividend — currently at almost 6%. | AbbVie (ABBV) Dividend Yield: 5.71% Source: Shutterstock The giant pharmaceutical firms have long been great dividend stocks. This includes biotech king AbbVie (NASDAQ:). The drug has continued to drive ABBV’s dividend — currently at almost 6%. |
24938.0 | 2019-07-04 00:00:00 UTC | Why AbbVie's Stock Sank in the First Half of 2019 | ABBV | https://www.nasdaq.com/articles/why-abbvies-stock-sank-in-the-first-half-of-2019-2019-07-04 | nan | nan | What happened
Biopharma giant AbbVie (NYSE: ABBV) has had an absolutely regrettable year. Through the course of the first six months of the year, the drugmaker's shares have lost a breathtaking 21.2% of their value, according to data from S&P Global Market Intelligence.
Why did investors give AbbVie's stock the cold shoulder in the first half of 2019? Two reasons. First off, the company's flagship arthritis medication Humira saw its European sales take a big hit following the introduction of biosimilar competition. Second, AbbVie decided to address Humira's patent cliff by acquiring Botox maker Allergan (NYSE: AGN) for a whopping $63 billion.
Image Source: Getty Images.
So what
AbbVie's massive drop-off this year might be a blessing in disguise. After all, the company's shares are now trading at less than eight times next year's projected earnings, and its dividend yield has ballooned to a sky-high 5.77% in response to this double-digit downturn.
Topping it off, AbbVie also grabbed an FDA approval for its next-generation immunology drug Skyrizi earlier this year. While Skyrizi won't be a panacea for AbbVie's patent woes, it should at least help to blunt the impact of Humira's ongoing battle with biosimilars. Stated simply, AbbVie's stock might have fallen too far too fast in 2019.
Now what
Is AbbVie a bargain? The answer to this question ultimately depends on how this megamerger with Allergan pans out. Wall Street wasn't initially sold on the deal due to the lack of any clear-cut synergies between the two companies and the fact that Allergan has been dealing with its own patent problems of late.
However, this tie-up does dilute Humira's overall importance from a revenue generation standpoint, and that's a big positive. AbbVie, in turn, might turn out to be an outstanding bargain if management can somehow mesh together two drastically different product portfolios while also maintaining the company's status as a Dividend Aristocrat in the years to come. That's a tall order based on how things stand now, but it's not an impossible feat, either.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Second, AbbVie decided to address Humira's patent cliff by acquiring Botox maker Allergan (NYSE: AGN) for a whopping $63 billion. While Skyrizi won't be a panacea for AbbVie's patent woes, it should at least help to blunt the impact of Humira's ongoing battle with biosimilars. What happened Biopharma giant AbbVie (NYSE: ABBV) has had an absolutely regrettable year. | * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and AbbVie wasn't one of them! What happened Biopharma giant AbbVie (NYSE: ABBV) has had an absolutely regrettable year. Why did investors give AbbVie's stock the cold shoulder in the first half of 2019? | 10 stocks we like better than AbbVie When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and AbbVie wasn't one of them! What happened Biopharma giant AbbVie (NYSE: ABBV) has had an absolutely regrettable year. | AbbVie, in turn, might turn out to be an outstanding bargain if management can somehow mesh together two drastically different product portfolios while also maintaining the company's status as a Dividend Aristocrat in the years to come. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and AbbVie wasn't one of them! What happened Biopharma giant AbbVie (NYSE: ABBV) has had an absolutely regrettable year. |
24939.0 | 2019-07-04 00:00:00 UTC | Why Amicus Therapeutics' Stock Perked Up in June | ABBV | https://www.nasdaq.com/articles/why-amicus-therapeutics-stock-perked-up-in-june-2019-07-04 | nan | nan | What happened
Shares of rare disease specialist Amicus Therapeutics (NASDAQ: FOLD) gained a healthy 10.7% in June, according to data from S&P Global Market Intelligence. What sparked this upswing?
Amicus' stock appears to have been the beneficiary of a rising-tide phenomenon last month. While the prior few months have been somewhat rocky for biotechs in general, June proved to be a banner month for the industry. The iShares Nasdaq Biotechnology Index, for instance, gained a stately 9.1% last month.
Image Source: Getty Images.
So what
After a tumultuous first half of 2019, biotech stocks perked up last month thanks in large part to the ongoing wave of consolidation that's occurring across the space. So far this year, we've seen numerous mergers and acquisitions such as Biogen's deal to acquire gene therapy specialist Nightstar Therapeutics, Bristol-Myers Squibb's megamerger with Celgene, Pfizer's acquisition of Array BioPharma, and most recently, AbbVie's $63 billion deal to tie the knot with Allergan. Amicus, for its part, appears particularly ripe for a buyout, especially with the company bolstering its presence in the highly coveted field of gene therapy.
Now what
Is Amicus' stock worth buying even if a buyout isn't in the cards? The answer to this question is a resounding yes. Amicus is on the cusp of sporting two franchise-level orphan drugs -- Galafold for Fabry disease and AT-GAA for Pompe disease (pending further development) -- capable of generating more than $1 billion in combined revenue early in the next decade.
In addition, Amicus has a rich pipeline of novel gene therapies indicated for a host of rare diseases -- many of which have the potential to generate hundreds of millions in sales if approved. So even though this mid-cap biotech stock is among the most expensive within its peer group, Amicus still has a solid shot at generating market-beating returns for investors in the coming decade.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Biogen and Celgene. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | So far this year, we've seen numerous mergers and acquisitions such as Biogen's deal to acquire gene therapy specialist Nightstar Therapeutics, Bristol-Myers Squibb's megamerger with Celgene, Pfizer's acquisition of Array BioPharma, and most recently, AbbVie's $63 billion deal to tie the knot with Allergan. What happened Shares of rare disease specialist Amicus Therapeutics (NASDAQ: FOLD) gained a healthy 10.7% in June, according to data from S&P Global Market Intelligence. In addition, Amicus has a rich pipeline of novel gene therapies indicated for a host of rare diseases -- many of which have the potential to generate hundreds of millions in sales if approved. | So far this year, we've seen numerous mergers and acquisitions such as Biogen's deal to acquire gene therapy specialist Nightstar Therapeutics, Bristol-Myers Squibb's megamerger with Celgene, Pfizer's acquisition of Array BioPharma, and most recently, AbbVie's $63 billion deal to tie the knot with Allergan. What happened Shares of rare disease specialist Amicus Therapeutics (NASDAQ: FOLD) gained a healthy 10.7% in June, according to data from S&P Global Market Intelligence. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market. | So far this year, we've seen numerous mergers and acquisitions such as Biogen's deal to acquire gene therapy specialist Nightstar Therapeutics, Bristol-Myers Squibb's megamerger with Celgene, Pfizer's acquisition of Array BioPharma, and most recently, AbbVie's $63 billion deal to tie the knot with Allergan. 10 stocks we like better than Amicus Therapeutics When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Amicus Therapeutics wasn't one of them! | So far this year, we've seen numerous mergers and acquisitions such as Biogen's deal to acquire gene therapy specialist Nightstar Therapeutics, Bristol-Myers Squibb's megamerger with Celgene, Pfizer's acquisition of Array BioPharma, and most recently, AbbVie's $63 billion deal to tie the knot with Allergan. While the prior few months have been somewhat rocky for biotechs in general, June proved to be a banner month for the industry. In addition, Amicus has a rich pipeline of novel gene therapies indicated for a host of rare diseases -- many of which have the potential to generate hundreds of millions in sales if approved. |
24940.0 | 2019-07-04 00:00:00 UTC | 3 Dividend Stocks That Pay You More Than Exxon Does | ABBV | https://www.nasdaq.com/articles/3-dividend-stocks-that-pay-you-more-than-exxon-does-2019-07-04 | nan | nan | Payday is awesome, but a payday you didn't have to work for is even better. Yielding a sweet 4.6% a year, ExxonMobil (NYSE: XOM) is a great way to get paid for owning a slice of the oil giant. Whether the stock is for generating income or offsetting stock market volatility, Exxon is a top pick.
But it's not the only one of its kind. Three of our Foolish contributors think that Seagate Technology (NASDAQ: STX), AbbVie (NYSE: ABBV), and Ford (NYSE: F) are good dividend picks, too -- and all of them yield even more than Exxon does at current share prices.
Image source: Getty Images.
Pick up this cyclical stock while it's cheap
Anders Bylund (Seagate Technology): This maker of traditional, spinning-magnetic-disc hard drives isn't a slam-dunk winner for equally traditional income investors. But at today's prices, Seagate's dividends do look juicy and the stock offers plenty of turnaround promise.
The key to finding value in Seagate's business and stock lies in appreciating the cyclical nature of the company's target markets. Sales of both enterprise servers and consumer-level computers have been lagging over the last couple of years as President Trump's trade conflict with China added higher production costs to a natural multiyear downturn.
Seagate investors have suffered a 20% loss in five years while the S&P 500 raced 50% higher. Over the last year alone, Seagate took an 18% haircut while the broader market marched 9% higher. Seagate hasn't raised its quarterly dividends since 2015, but a steady payout divided by a falling stock price equals rising dividend yields. Today, Seagate's yield stands at a meaty 5.3%.
Looking ahead, Seagate's $1.4 billion of trailing free cash flows leave the company ample room to start raising its dividend payouts again. The dividend policy currently consumes just 44% of the company's incoming cash profits. When the China-U.S. trade tensions finally go away, Seagate stands to profit as the PC and server markets start to make up for lost time.
Investing in cyclical stocks near their rock-bottom business troughs delivers the one-two punch of low buy-in prices and generous effective dividend yields. That's what you get when buying Seagate right now. It's not a perfect dividend payer and far from a risk-free bet, but Seagate's risk-reward equation looks promising at these prices.
A beaten-up bargain dividend stock
Todd Campbell (AbbVie): A high dividend yield can occur when a company's dividend increases faster than its stock price or when a stock price falls despite a stable dividend payout. In AbbVie's case, it's the latter. The company's shares have been clobbered following news it's acquiring Botox maker Allergan (NYSE: AGN) for $63 billion.
The slide in AbbVie's share price reflects investors' concerns that combining with the debt-laden Allergan won't solve AbbVie's problem -- namely, replacing the revenue that's likely to be lost when generics start competing against Humira in 2023. AbbVie currently generates about 60% of its revenue from Humira, so a drop in Humira sales because of generics could present a stiff headwind to revenue growth in a few years.
I don't think buying Allergan will allow AbbVie to sidestep decelerating growth rates in the future, but income investors might not want to overreact by selling. In fact, if dividends are the primary focus of your investing strategy, then buying AbbVie's shares now that they're yielding 6.3% could make sense.
AbbVie's only paying $120 per share in cash (the rest is being paid in the form of AbbVie stock), and Allergan's book value is $187, so this deal gives AbbVie a bargain source of future cash flow. Allergan generated $5.4 billion in operating cash flow over the past 12 months and AbbVie thinks it can squeeze $2 billion in cost savings out of Allergan by the third year after the deal closes. AbbVie expects the acquisition will boost earnings per share by 10% in year one and by up to 20% over time.
If management's financial modeling is on point, then AbbVie's projected $19 billion in post-deal cash flow will provide plenty of financial firepower to support its dividend and pay down debt. In short, its dividend appears safe for a few more years, at a minimum.
Overall, I think there are better stocks to buy than AbbVie in growth portfolios, but a good argument can be made for including it in dividend portfolios since its dividend yield is so high right now.
Image source: Getty Images.
A boring automaker with an exciting payout
Nicholas Rossolillo (Ford): The average automaker stock hasn't done much the last couple of years, and for good reason. The number of total vehicles sold globally have been hovering just below all-time highs since 2017. Since auto sales tend to be cyclical, the worry has been that the stagnant figures would eventually give way to all-out decline -- ending the decade-long advance since the financial crisis in 2008.
However, a feared slump has already taken place at Ford. F-Series pickup trucks, Mustangs, and SUV sales have continued to advance in the last year, but sedans have been tanking. Though second-quarter 2019 financials haven't yet been released, the company said U.S. unit sales fell 4% year over year, with big gains in trucks offset once again by fading sedans. The European and Chinese business segments are also getting restructured, and in the meantime bleeding cash. All the while Ford has been investing in everything from electric-vehicle technology to ridesharing to keep up with the times. As a result, the stock has declined some 40% since its most recent peak all the way back in 2014.
Challenges will undoubtedly remain, and even when restructuring is complete Ford will remain nothing more than an old and mostly boring automaker. However, this is a solid business well entrenched in the automotive world. The company has generated over $7.4 billion in free cash flow over the last year and had $20.8 billion in cash and equivalents in the bank at the end of the first quarter of 2019.
That's more than enough to cover the dividend -- which is currently yielding 5.9% a year -- and enough cushion to keep it going if business continues to get worse before it gets better. That makes this stock a worthy pick for investors looking for income generation.
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Anders Bylund has no position in any of the stocks mentioned. Nicholas Rossolillo and his clients own shares of Ford. Todd Campbell owns shares of Seagate Technology. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Three of our Foolish contributors think that Seagate Technology (NASDAQ: STX), AbbVie (NYSE: ABBV), and Ford (NYSE: F) are good dividend picks, too -- and all of them yield even more than Exxon does at current share prices. A beaten-up bargain dividend stock Todd Campbell (AbbVie): A high dividend yield can occur when a company's dividend increases faster than its stock price or when a stock price falls despite a stable dividend payout. In AbbVie's case, it's the latter. | Three of our Foolish contributors think that Seagate Technology (NASDAQ: STX), AbbVie (NYSE: ABBV), and Ford (NYSE: F) are good dividend picks, too -- and all of them yield even more than Exxon does at current share prices. A beaten-up bargain dividend stock Todd Campbell (AbbVie): A high dividend yield can occur when a company's dividend increases faster than its stock price or when a stock price falls despite a stable dividend payout. In AbbVie's case, it's the latter. | A beaten-up bargain dividend stock Todd Campbell (AbbVie): A high dividend yield can occur when a company's dividend increases faster than its stock price or when a stock price falls despite a stable dividend payout. AbbVie's only paying $120 per share in cash (the rest is being paid in the form of AbbVie stock), and Allergan's book value is $187, so this deal gives AbbVie a bargain source of future cash flow. Three of our Foolish contributors think that Seagate Technology (NASDAQ: STX), AbbVie (NYSE: ABBV), and Ford (NYSE: F) are good dividend picks, too -- and all of them yield even more than Exxon does at current share prices. | A beaten-up bargain dividend stock Todd Campbell (AbbVie): A high dividend yield can occur when a company's dividend increases faster than its stock price or when a stock price falls despite a stable dividend payout. AbbVie's only paying $120 per share in cash (the rest is being paid in the form of AbbVie stock), and Allergan's book value is $187, so this deal gives AbbVie a bargain source of future cash flow. Three of our Foolish contributors think that Seagate Technology (NASDAQ: STX), AbbVie (NYSE: ABBV), and Ford (NYSE: F) are good dividend picks, too -- and all of them yield even more than Exxon does at current share prices. |
24941.0 | 2019-07-03 00:00:00 UTC | Two Dividend Payers That Beat the S&P 500 | ABBV | https://www.nasdaq.com/articles/two-dividend-payers-that-beat-the-sp-500-2019-07-03 | nan | nan | The Kiplinger Dividend 15, our favorite stocks for dividend income, have been riding the bull since we last checked on them in the April issue of Kiplinger's. Since then, the average stock among our dividend champs has returned 6.6%, including dividends. Standard & Poor's 500-stock index, by comparison, has gained 4.8%.
See Also: How Dividend Stocks Help Boost Retirement Income
More important for dividend investors, the average yield for the Dividend 15 is 3.7%, compared with 2.0% for the S&P 500 and 2.1% for the bellwether 10-year Treasury note (prices and returns are through June 14).
The biggest winner in the past four months: Blackstone (symbol BX, $47) , which offers investments in private equity, real estate and other alternatives. The stock has gained 33.6% since then and 39.1% over the past 12 months. Assets under management grew to $512 billion in March from $449.6 billion a year earlier. Its quarterly dividend is variable, depending on what the company earns.
Air Products and Chemicals (APD, $229), up 26.7% over the past four months and 35% over the past year, was in second place. The maker of industrial gases and chemicals raised its quarterly dividend by more than 5%, to $1.16 per share, in January. Because of its steep price gains, however, the company's 2.1% yield is one of the lowest of our dividend champs.
Biggest loser. 3M (MMM, $174) tumbled 19.5% over the past four months and 15.4% over the past 12. In the first quarter of 2019, sales declined 5%, and the company lowered its 2019 earnings projection from a range of $10.45 to $10.90 per share to $9.25 to $9.75. Even so, 3M has paid dividends for more than 100 years and has raised its dividend annually for the past 60 years. In February, the company increased its quarterly dividend to $1.44 per share from $1.36 per share. The stock currently yields 3.5%. AbbVie's (ABBV, $74) shares fell 16.2% over the past 12 months, pushing the yield to 5.4%, due to fears that sales of Humira, its flagship drug, could slow.
The Dividend 15 are divided into three groups. Dividend stalwarts have raised their payouts each year for at least 20 years. Our dividend growth category includes companies that can continue to deliver generous dividend hikes, fueled by strong growth in sales and profits. The third category is high yielders, which we like to see sporting yields of 4% or more.
That puts Blackstone, currently yielding 3.4%, as well as Realty Income (O, $69) on our watch list. Annualizing Realty's most recent monthly dividend payment gives the stock a yield of 3.7%. As with Blackstone, Realty's yield has fallen below 4% for a lovely reason: The stock has soared 42.9% over the past 12 months, which is astonishing for a normally staid real estate investment trust.
Ideally, the companies would boost their dividend to get over our 4% threshold, but a price decline could also do the trick. Let's hope for the former, but be prepared for the latter.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie's (ABBV, $74) shares fell 16.2% over the past 12 months, pushing the yield to 5.4%, due to fears that sales of Humira, its flagship drug, could slow. The biggest winner in the past four months: Blackstone (symbol BX, $47) , which offers investments in private equity, real estate and other alternatives. As with Blackstone, Realty's yield has fallen below 4% for a lovely reason: The stock has soared 42.9% over the past 12 months, which is astonishing for a normally staid real estate investment trust. | AbbVie's (ABBV, $74) shares fell 16.2% over the past 12 months, pushing the yield to 5.4%, due to fears that sales of Humira, its flagship drug, could slow. Since then, the average stock among our dividend champs has returned 6.6%, including dividends. See Also: How Dividend Stocks Help Boost Retirement Income More important for dividend investors, the average yield for the Dividend 15 is 3.7%, compared with 2.0% for the S&P 500 and 2.1% for the bellwether 10-year Treasury note (prices and returns are through June 14). | AbbVie's (ABBV, $74) shares fell 16.2% over the past 12 months, pushing the yield to 5.4%, due to fears that sales of Humira, its flagship drug, could slow. Since then, the average stock among our dividend champs has returned 6.6%, including dividends. See Also: How Dividend Stocks Help Boost Retirement Income More important for dividend investors, the average yield for the Dividend 15 is 3.7%, compared with 2.0% for the S&P 500 and 2.1% for the bellwether 10-year Treasury note (prices and returns are through June 14). | AbbVie's (ABBV, $74) shares fell 16.2% over the past 12 months, pushing the yield to 5.4%, due to fears that sales of Humira, its flagship drug, could slow. The stock has gained 33.6% since then and 39.1% over the past 12 months. Even so, 3M has paid dividends for more than 100 years and has raised its dividend annually for the past 60 years. |
24942.0 | 2019-07-02 00:00:00 UTC | Is AbbVie a Buy? | ABBV | https://www.nasdaq.com/articles/is-abbvie-a-buy-2019-07-02 | nan | nan | Ever since Abbott Laboratories spun off AbbVie (NYSE: ABBV) as a stand-alone entity approximately six years ago, the biotech has generated industry-leading levels of earnings, revenue, and dividend growth. In response, AbbVie's shares have also produced market-beating returns for its early shareholders.
However, AbbVie's status as biotech's top large-cap growth stock -- and one of the best dividend growth plays in all of healthcare -- abruptly ended in early 2018. A disappointing clinical readout for its experimental cancer therapy dubbed "ROVA-T" sent shock waves through the investing community, causing AbbVie's shares to lose around a quarter of their value in the past 16 months.
Image source: Getty Images.
The big deal is that AbbVie paid a noteworthy $5.8 billion to acquire ROVA-T and this particular cancer treatment also happened to be a key centerpiece in the biotech's pivot to immuno-oncology as a means to diversifying its revenue stream ahead of Humira's patent expiration. This singular clinical setback, in effect, caused Wall Street to hit the panic button over Humira's eventual decline.
Pouring salt onto the wound, Humira's sales dropped faster-than-expected following the drug's initial bout with biosimilars in Europe during the most recent quarter. This wake-up call, in turn, appears to have played a central role in AbbVie's decision to merge with struggling Botox maker Allergan (NYSE: AGN) in an enormous cash-and-stock deal valued at $63 billion.
Should investors buy into this planned megamerger, or is it a better idea to stick to the safety of the sidelines? Let's break down the benefits and potential drawbacks of this blockbuster deal to find out.
This megamerger has one clear upside
On the plus side, this merger instantly achieves AbbVie's core goal of diluting Humira's impact on its top line. Historically, Humira has made up around 60% of the drugmaker's annual revenue, but this figure should drop to around 38% once this deal closes early next year. And by 2024, Humira is slated to make up no more than a quarter of the combined entity's annual sales.
That's a big improvement over prior forecasts that called for around a third of AbbVie's annual sales emanating from Humira in 2024. So this megamerger does address AbbVie's biggest weakness. As an added bonus, Humira should remain a healthy cash cow for the company for the better part of the next decade, even with the entrance of biosimilars in the all-important U.S. market in 2023. AbbVie should thus have sufficient free cash flows to address its massive debt in the wake of this deal.
Two major drawbacks
The first major drawback is that this new megapharma would sport a jaw-dropping debt load of $73 billion. While AbbVie reportedly plans to reduce its debt load by $15 billion to $18 billion by 2021, the company won't have much room to maneuver in terms of business development activities for perhaps most of the next decade. Now, this limited financial capacity may not ultimately matter. But Teva Pharmaceutical Industries' implosion following its massive deal with Allergan shows what can happen when biopharmas box themselves in with too much debt.
Secondly, AbbVie might not be able to maintain its appeal as a top dividend growth stock over the course of the next decade. The biopharma, after all, will be dealing with declining sales for both Humira and Allergan's top-selling eye treatment Restasis, as well as a highly leveraged balance sheet. There's also serious concern that Botox sales could fall off due to the entrance of new competitors in the not-so-distant future. In short, investors may want to think twice before buying AbbVie solely for its prospects as a dividend growth play. AbbVie, after all, will be an entirely different animal after this deal officially closes.
Verdict
The bottom line is that AbbVie and Allergan are tying the knot out of necessity -- not because this is a match made in biopharma heaven. There are few, if any, natural synergies between these two large-cap biopharmas after all. Unfortunately, AbbVie's elite dividend program may take a big hit from this merger, and the new entity won't be able to change course -- at least not quickly -- if an unexpected hiccup arises thanks to its sky-high debt load. Put simply, investors are probably best served by taking a wait-and-see approach with AbbVie following this merger with Allergan.
10 stocks we like better than Allergan
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A disappointing clinical readout for its experimental cancer therapy dubbed "ROVA-T" sent shock waves through the investing community, causing AbbVie's shares to lose around a quarter of their value in the past 16 months. The big deal is that AbbVie paid a noteworthy $5.8 billion to acquire ROVA-T and this particular cancer treatment also happened to be a key centerpiece in the biotech's pivot to immuno-oncology as a means to diversifying its revenue stream ahead of Humira's patent expiration. This wake-up call, in turn, appears to have played a central role in AbbVie's decision to merge with struggling Botox maker Allergan (NYSE: AGN) in an enormous cash-and-stock deal valued at $63 billion. | However, AbbVie's status as biotech's top large-cap growth stock -- and one of the best dividend growth plays in all of healthcare -- abruptly ended in early 2018. While AbbVie reportedly plans to reduce its debt load by $15 billion to $18 billion by 2021, the company won't have much room to maneuver in terms of business development activities for perhaps most of the next decade. Secondly, AbbVie might not be able to maintain its appeal as a top dividend growth stock over the course of the next decade. | However, AbbVie's status as biotech's top large-cap growth stock -- and one of the best dividend growth plays in all of healthcare -- abruptly ended in early 2018. The big deal is that AbbVie paid a noteworthy $5.8 billion to acquire ROVA-T and this particular cancer treatment also happened to be a key centerpiece in the biotech's pivot to immuno-oncology as a means to diversifying its revenue stream ahead of Humira's patent expiration. Secondly, AbbVie might not be able to maintain its appeal as a top dividend growth stock over the course of the next decade. | Ever since Abbott Laboratories spun off AbbVie (NYSE: ABBV) as a stand-alone entity approximately six years ago, the biotech has generated industry-leading levels of earnings, revenue, and dividend growth. In response, AbbVie's shares have also produced market-beating returns for its early shareholders. However, AbbVie's status as biotech's top large-cap growth stock -- and one of the best dividend growth plays in all of healthcare -- abruptly ended in early 2018. |
24943.0 | 2019-07-02 00:00:00 UTC | 3 Biotechs That Have Doubled This Year (Acquisition Next?) | ABBV | https://www.nasdaq.com/articles/3-biotechs-that-have-doubled-this-year-acquisition-next-2019-07-02 | nan | nan | When big pharmas go shopping, you usually won't find them sifting through the clearance racks for bargains. For the most part, the large drugmakers would rather pay extra for a proven winner than buy an on-sale biotech looking to recover.
Take Array BioPharma, which had more than doubled year to date through the middle of last month thanks to getting some added marketing muscle for its partnered drugs and positive clinical trial data for its own drugs. Pfizer saw the biotech's potential, deciding to take out Array for a 63% premium, resulting in a 225% return for the first half of the year.
Here are three more biotechs that have earned doubles -- or more -- during the first half of the year, potentially on their way to becoming acquisition targets.
Data source: YCharts.
1. Adverum Biotechnologies
Adverum only has one drug in clinical trials, but ADVM-022, a gene therapy for an eye disease called wet age-related macular degeneration, is off to a good start.
In late April, the biotech said doctors were able to treat the second eye of patients who had previously been treated with ADVM-022, a good sign that patients aren't developing tolerance to the treatment.
A few weeks later, the Food and Drug Administration decided to lift a hold that was preventing Adverum from escalating to a higher dose. But instead of testing ADVM-022 at a higher dose, the company said the data from the first dose was so good that it plans to test a lower dose to see if it'll work as well.
It's a pretty rare sight when the play-it-safe initial dose works well enough that companies test a lower dose.
2. Voyager Therapeutics
Voyager established a pair of development deals that have helped propel the biotech's stock higher.
In January, Voyager licensed the rights to its gene therapy programs VY-AADC for Parkinson's disease, VY-FXN01 for Friedreich's ataxia and two additional programs to be determined later to Neurocrine Biosciences (NASDAQ: NBIX) for $165 million up front, including a $50 million equity investment, and the potential for up to $1.7 billion in development, regulatory and commercial milestone payments.
In February, the company signed a collaboration deal with AbbVie (NYSE: ABBV) to develop treatments for Parkinson's disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. Voyager got $65 million in upfront payments and is eligible for up to $245 million in preclinical and phase 1 option payments and more down the road assuming drugs are developed from the collaboration.
Further data on its pipeline, including long-term data for VY-AADC, have helped keep the momentum going throughout the first half of the year.
Image source: Getty Images.
3. uniQure
Like Averum, uniQure's valuation is focused on one gene therapy, AMT-061, which treats hemophilia B.
In February, uniQure presented 12-week mid-stage data for AMT-061, showing three patients achieved 38% of normal levels of factor IX, the protein mutated in hemophilia B patients. While an average of 38% doesn't sound like a full recovery, the level is considered enough to eliminate or significantly reduce the risk of bleeding events.
By May, six-month data from the three patients showed the mean factor IX activity level had increased to 47% of normal.
uniQure will certainly have to show the treatment works in more patients before AMT-061 can be approved, but the initial data certainly look good and is headed in the right direction.
Past price appreciation
The potential for an acquisition is never a good buy thesis in and of itself. But good news that might trigger a buyout can also be a good reason for investors who are looking for continued development of a biotech's pipeline to buy shares.
The good news often leads to increasing stock prices, so there are no value plays to be found here. While it can be hard to buy after a double, sometimes investors are best off just holding their noses at sky-high valuations.
One of Motley Fool co-founder David Gardner's signs of a Rule Breakers stock is past price appreciation. As David puts it, "That's the market telling us that this company is onto something good and doing great stuff."
Maybe a few large pharmas will see it the same way and take these biotechs off investors' hands.
10 stocks we like better than Adverum
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David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Adverum wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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The author(s) may have a position in any stocks mentioned.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In February, the company signed a collaboration deal with AbbVie (NYSE: ABBV) to develop treatments for Parkinson's disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. A few weeks later, the Food and Drug Administration decided to lift a hold that was preventing Adverum from escalating to a higher dose. In January, Voyager licensed the rights to its gene therapy programs VY-AADC for Parkinson's disease, VY-FXN01 for Friedreich's ataxia and two additional programs to be determined later to Neurocrine Biosciences (NASDAQ: NBIX) for $165 million up front, including a $50 million equity investment, and the potential for up to $1.7 billion in development, regulatory and commercial milestone payments. | In February, the company signed a collaboration deal with AbbVie (NYSE: ABBV) to develop treatments for Parkinson's disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. Adverum Biotechnologies Adverum only has one drug in clinical trials, but ADVM-022, a gene therapy for an eye disease called wet age-related macular degeneration, is off to a good start. In January, Voyager licensed the rights to its gene therapy programs VY-AADC for Parkinson's disease, VY-FXN01 for Friedreich's ataxia and two additional programs to be determined later to Neurocrine Biosciences (NASDAQ: NBIX) for $165 million up front, including a $50 million equity investment, and the potential for up to $1.7 billion in development, regulatory and commercial milestone payments. | In February, the company signed a collaboration deal with AbbVie (NYSE: ABBV) to develop treatments for Parkinson's disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. In late April, the biotech said doctors were able to treat the second eye of patients who had previously been treated with ADVM-022, a good sign that patients aren't developing tolerance to the treatment. But instead of testing ADVM-022 at a higher dose, the company said the data from the first dose was so good that it plans to test a lower dose to see if it'll work as well. | In February, the company signed a collaboration deal with AbbVie (NYSE: ABBV) to develop treatments for Parkinson's disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. One of Motley Fool co-founder David Gardner's signs of a Rule Breakers stock is past price appreciation. Maybe a few large pharmas will see it the same way and take these biotechs off investors' hands. |
24944.0 | 2019-07-02 00:00:00 UTC | Insiders Buy the Holdings of DLN ETF | ABBV | https://www.nasdaq.com/articles/insiders-buy-the-holdings-of-dln-etf-2019-07-02 | nan | nan | A look at the weighted underlying holdings of the WisdomTree U.S. LargeCap Dividend Fund (Symbol: DLN) shows an impressive 10.5% of holdings on a weighted basis have experienced insider buying within the past six months.
AbbVie Inc (Symbol: ABBV), which makes up 1.12% of the WisdomTree U.S. LargeCap Dividend Fund (Symbol: DLN), has seen 3 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The ETF holds a total of $23,498,045 worth of ABBV, making it the #24 largest holding. The table below details the recent insider buying activity observed at ABBV:
ABBV — last trade: $73.40 — Recent Insider Buys:
10 ETFs With Stocks That Insiders Are Buying »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie Inc (Symbol: ABBV), which makes up 1.12% of the WisdomTree U.S. LargeCap Dividend Fund (Symbol: DLN), has seen 3 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The table below details the recent insider buying activity observed at ABBV: ABBV — last trade: $73.40 — Recent Insider Buys: 10 ETFs With Stocks That Insiders Are Buying » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The ETF holds a total of $23,498,045 worth of ABBV, making it the #24 largest holding. | AbbVie Inc (Symbol: ABBV), which makes up 1.12% of the WisdomTree U.S. LargeCap Dividend Fund (Symbol: DLN), has seen 3 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The table below details the recent insider buying activity observed at ABBV: ABBV — last trade: $73.40 — Recent Insider Buys: 10 ETFs With Stocks That Insiders Are Buying » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The ETF holds a total of $23,498,045 worth of ABBV, making it the #24 largest holding. | AbbVie Inc (Symbol: ABBV), which makes up 1.12% of the WisdomTree U.S. LargeCap Dividend Fund (Symbol: DLN), has seen 3 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The table below details the recent insider buying activity observed at ABBV: ABBV — last trade: $73.40 — Recent Insider Buys: 10 ETFs With Stocks That Insiders Are Buying » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The ETF holds a total of $23,498,045 worth of ABBV, making it the #24 largest holding. | AbbVie Inc (Symbol: ABBV), which makes up 1.12% of the WisdomTree U.S. LargeCap Dividend Fund (Symbol: DLN), has seen 3 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The table below details the recent insider buying activity observed at ABBV: ABBV — last trade: $73.40 — Recent Insider Buys: 10 ETFs With Stocks That Insiders Are Buying » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The ETF holds a total of $23,498,045 worth of ABBV, making it the #24 largest holding. |
24945.0 | 2019-07-01 00:00:00 UTC | Notable Monday Option Activity: ABBV, TTWO, MRNS | ABBV | https://www.nasdaq.com/articles/notable-monday-option-activity%3A-abbv-ttwo-mrns-2019-07-01 | nan | nan | Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in AbbVie Inc (Symbol: ABBV), where a total of 70,194 contracts have traded so far, representing approximately 7.0 million underlying shares. That amounts to about 54.3% of ABBV's average daily trading volume over the past month of 12.9 million shares. Particularly high volume was seen for the $70 strike call option expiring July 19, 2019, with 4,943 contracts trading so far today, representing approximately 494,300 underlying shares of ABBV. Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange:
Take-Two Interactive Software, Inc. (Symbol: TTWO) options are showing a volume of 6,873 contracts thus far today. That number of contracts represents approximately 687,300 underlying shares, working out to a sizeable 54% of TTWO's average daily trading volume over the past month, of 1.3 million shares. Especially high volume was seen for the $115 strike call option expiring July 19, 2019, with 770 contracts trading so far today, representing approximately 77,000 underlying shares of TTWO. Below is a chart showing TTWO's trailing twelve month trading history, with the $115 strike highlighted in orange:
And Marinus Pharmaceuticals Inc (Symbol: MRNS) options are showing a volume of 2,384 contracts thus far today. That number of contracts represents approximately 238,400 underlying shares, working out to a sizeable 53.2% of MRNS's average daily trading volume over the past month, of 448,315 shares. Especially high volume was seen for the $4 strike call option expiring October 18, 2019, with 1,893 contracts trading so far today, representing approximately 189,300 underlying shares of MRNS. Below is a chart showing MRNS's trailing twelve month trading history, with the $4 strike highlighted in orange:
For the various different available expirations for ABBV options, TTWO options, or MRNS options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Particularly high volume was seen for the $70 strike call option expiring July 19, 2019, with 4,943 contracts trading so far today, representing approximately 494,300 underlying shares of ABBV. Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in AbbVie Inc (Symbol: ABBV), where a total of 70,194 contracts have traded so far, representing approximately 7.0 million underlying shares. That amounts to about 54.3% of ABBV's average daily trading volume over the past month of 12.9 million shares. | Below is a chart showing ABBV's trailing twelve month trading history, with the $70 strike highlighted in orange: Take-Two Interactive Software, Inc. (Symbol: TTWO) options are showing a volume of 6,873 contracts thus far today. Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in AbbVie Inc (Symbol: ABBV), where a total of 70,194 contracts have traded so far, representing approximately 7.0 million underlying shares. That amounts to about 54.3% of ABBV's average daily trading volume over the past month of 12.9 million shares. | Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in AbbVie Inc (Symbol: ABBV), where a total of 70,194 contracts have traded so far, representing approximately 7.0 million underlying shares. Particularly high volume was seen for the $70 strike call option expiring July 19, 2019, with 4,943 contracts trading so far today, representing approximately 494,300 underlying shares of ABBV. That amounts to about 54.3% of ABBV's average daily trading volume over the past month of 12.9 million shares. | Below is a chart showing MRNS's trailing twelve month trading history, with the $4 strike highlighted in orange: For the various different available expirations for ABBV options, TTWO options, or MRNS options, visit StockOptionsChannel.com. Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in AbbVie Inc (Symbol: ABBV), where a total of 70,194 contracts have traded so far, representing approximately 7.0 million underlying shares. That amounts to about 54.3% of ABBV's average daily trading volume over the past month of 12.9 million shares. |
24946.0 | 2019-07-01 00:00:00 UTC | Monday 7/1 Insider Buying Report: MDCO, ABBV | ABBV | https://www.nasdaq.com/articles/monday-7/1-insider-buying-report%3A-mdco-abbv-2019-07-01 | nan | nan | As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy — they expect to make money. So let's look at two noteworthy recent insider buys.
At Medicines, a filing with the SEC revealed that on Friday, Director Alexander J. Denner bought 50,000 shares of MDCO, for a cost of $33.00 each, for a total investment of $1.65M. Denner was up about 13.0% on the buy at the high point of today's trading session, with MDCO trading as high as $37.30 at last check today. Medicines is trading up about 0.5% on the day Monday. Before this latest buy, Denner purchased MDCO on 7 other occasions during the past year, for a total cost of $56.59M at an average of $25.38 per share.
And on Wednesday, Director Roxanne S. Austin bought $776,250 worth of AbbVie, buying 11,500 shares at a cost of $67.50 each. AbbVie is trading up about 0.7% on the day Monday. Austin was up about 9.4% on the purchase at the high point of today's trading session, with ABBV trading as high as $73.85 at last check today.
VIDEO: Monday 7/1 Insider Buying Report: MDCO, ABBV
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And on Wednesday, Director Roxanne S. Austin bought $776,250 worth of AbbVie, buying 11,500 shares at a cost of $67.50 each. AbbVie is trading up about 0.7% on the day Monday. Austin was up about 9.4% on the purchase at the high point of today's trading session, with ABBV trading as high as $73.85 at last check today. | Austin was up about 9.4% on the purchase at the high point of today's trading session, with ABBV trading as high as $73.85 at last check today. VIDEO: Monday 7/1 Insider Buying Report: MDCO, ABBV The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And on Wednesday, Director Roxanne S. Austin bought $776,250 worth of AbbVie, buying 11,500 shares at a cost of $67.50 each. | Austin was up about 9.4% on the purchase at the high point of today's trading session, with ABBV trading as high as $73.85 at last check today. VIDEO: Monday 7/1 Insider Buying Report: MDCO, ABBV The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And on Wednesday, Director Roxanne S. Austin bought $776,250 worth of AbbVie, buying 11,500 shares at a cost of $67.50 each. | And on Wednesday, Director Roxanne S. Austin bought $776,250 worth of AbbVie, buying 11,500 shares at a cost of $67.50 each. AbbVie is trading up about 0.7% on the day Monday. Austin was up about 9.4% on the purchase at the high point of today's trading session, with ABBV trading as high as $73.85 at last check today. |
24947.0 | 2019-07-01 00:00:00 UTC | Acquisition Improves the Outlook of Pfizer Stock | ABBV | https://www.nasdaq.com/articles/acquisition-improves-the-outlook-of-pfizer-stock-2019-07-01 | nan | nan | Pfizer (NYSE: ) stock has enjoyed an uptrend that started in late April. With an upcoming quarterly dividend of 36 cents, giving Pfizer stock a yield of 3.3%, PFE stock price may rise more in the near future.
Source: Shutterstock
Pfizer’s $11.4 billion acquisition of Array BioPharma (NASDAQ: ) could be a positive, near-term and long-term catalyst for Pfizer stock. The price tag of the deal looks relatively small. I used the word “relatively” because of AbbVie’s (NYSE: ) subsequent, monstrous, $63 billion acquisition of Allergan (NYSE: ). Pfizer’s more manageable deal strengthens Pfizer’s biopharmaceutical unit and will accelerate the company’s growth over the long-term.
Pfizer’s Acquisition
Array may boost Pfizer stock by providing PFE with BRAF/MEK inhibitors, a potential first-in-class therapy for patients suffering from BRAF-mutant metastatic colorectal cancer. According to the National Institute of Health, the BRAF gene “provides instructions for making a protein that helps transmit chemical signals from outside the cell to the cell’s nucleus.”
Overall. Pfizer currently has 44 oncology projects in its pipeline. Of these. 12 are in Phase 3 and five have already been approved and are in the process of being registered. The pipeline biologics, small molecules, immunotherapies, and biosimilars.
Source: Pfizer
Pfizer has it uses to target various types of tumors. Array primarily uses combination therapies. Its BRAFTOVI and MEKTOVI treatments have been approved for treating metastatic melanoma. Array is conducting over 30 clinical trials of its solid tumor treatments. Among its tumor treatments being tested is its BRAF-mutant metastatic colorectal cancer (mCRC) drug.
In May, Array reported statistically significant improvements of the subjects being treated in a Phase 3 trial of its mCRC treatment. According to the data, the treatment reduced the risk of death of the patients taking it by 48%, compared to those in the control group.
Array’s Addressable Market
Colorectal cancer is the third most common type of cancer in the U.S. In 2018, around 140,250 patients were diagnosed with cancer of the colon or rectum. BRAF mutations occur in about 15% of the cases. So, Array may potentially treat over 21,000 patients annually. Nearly one-third of those diagnosed with cancer of the colon or rectum, or 50,000 people, die each year, according to estimates.
But the owners of Pfizer stock barely reacted when PFE announced the Array deal. Compared to the $245 billion market cap of Pfuzer stock, the $11.4 billion acquisition is small. Nonetheless, the pipeline of cancer drugs that Pfizer acquired through the transaction could meaningfully boost Pfizer’s top line, lifting Pfizer stock in the process. Moreover, developing cancer drugs is typically expensive and requires lots of capital. So the acquisition will save PFE time and money and, under Pfizer’s control, the acquired unit will have more resources and cash that it can use to develop its drugs. The acquisition is expected to start increasing Pfizer’s earnings per share in 2022.
Analysts Are Mildly Upbeat on Pfizer Stock
Wall Street analysts are mildly bullish on PFE stock. The eight analysts covering PFE stock have an average price target on the shares of $47.14, according to . That’s about 8.5% above PFE stock price. With the 3.32% dividend yield of Pfizer stock, the total return of PFE stock, judging by the average price target, is expected to be about 12%.
The Bottom Line on Pfizer Stock
Pfizer stock trades at price-earnings multiples that are below those of some of its peers, as shown in this . Additionally, in the next three years, the company is expected to deliver strong growth. Yet investors have been slow to recognize its potential.
Moreover, by adding Array to its portfolio, PFE has greatly improved its pipeline while further distinguishing the company from other drug makers. Income and value investors should consider Pfizer stock as a core, long-term pharmaceutical holding.
As of this writing, the author owns shares of AbbVie.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I used the word “relatively” because of AbbVie’s (NYSE: ) subsequent, monstrous, $63 billion acquisition of Allergan (NYSE: ). As of this writing, the author owns shares of AbbVie. In May, Array reported statistically significant improvements of the subjects being treated in a Phase 3 trial of its mCRC treatment. | I used the word “relatively” because of AbbVie’s (NYSE: ) subsequent, monstrous, $63 billion acquisition of Allergan (NYSE: ). As of this writing, the author owns shares of AbbVie. Pfizer’s Acquisition Array may boost Pfizer stock by providing PFE with BRAF/MEK inhibitors, a potential first-in-class therapy for patients suffering from BRAF-mutant metastatic colorectal cancer. | I used the word “relatively” because of AbbVie’s (NYSE: ) subsequent, monstrous, $63 billion acquisition of Allergan (NYSE: ). As of this writing, the author owns shares of AbbVie. Source: Shutterstock Pfizer’s $11.4 billion acquisition of Array BioPharma (NASDAQ: ) could be a positive, near-term and long-term catalyst for Pfizer stock. | I used the word “relatively” because of AbbVie’s (NYSE: ) subsequent, monstrous, $63 billion acquisition of Allergan (NYSE: ). As of this writing, the author owns shares of AbbVie. Pfizer’s Acquisition Array may boost Pfizer stock by providing PFE with BRAF/MEK inhibitors, a potential first-in-class therapy for patients suffering from BRAF-mutant metastatic colorectal cancer. |
24948.0 | 2019-06-30 00:00:00 UTC | 3 Top Biotech Stocks to Buy Right Now | ABBV | https://www.nasdaq.com/articles/3-top-biotech-stocks-to-buy-right-now-2019-06-30 | nan | nan | Over the prior decade, you'd be hard-pressed to find a better performing subsector than biotechnology. A number of biotech stocks, after all, have produced life-changing returns on capital over this period. Nonetheless, the industry's best days are far from over. With a wave of groundbreaking products in the pipeline, biotechnology is poised to keep churning higher for the foreseeable future.
With this favorable long-term outlook in mind, we asked three of our Motley Fool contributors for their top biotech stock picks. They selected Biogen (NASDAQ: BIIB), AbbVie (NYSE: ABBV), and Mirati Therapeutics (NASDAQ: MRTX). Here's a brief rundown on why each of these biotech stocks might be worth adding to your portfolio soon.
Image Source: Getty Images.
A rebound is imminent
George Budwell (Biogen): Biogen, a top 10 biotech by market capitalization, has been a rather disappointing investing vehicle for going on five years at this point. The biotech's shares, in fact, have lost an eye-popping 46% from their five-year highs achieved back in 2015.
Despite this dreadful performance over the past five years, though, Wall Street still isn't convinced that this beaten-down biotech stock is a bargain at current levels. Biogen, after all, is experiencing a steady decline in its core multiple sclerosis franchise; its spinal muscular atrophy revenue stream is under threat following the FDA approval of Novartis' novel gene therapy; and its high-value Alzheimer's disease drug, aducanumab, failed to make the grade earlier this year in either of its late-stage trials.
Compounding matters, management has been reluctant to address the company's falling top line via a tuck-in acquisition. However, Biogen's brain trust may no longer have any choice in the matter. The company's top line is slated to fall by around 1% next year, and this downward trend could start to accelerate in a big way beginning in 2021 -- that is, if the biotech doesn't take action soon.
Fortunately, Biogen does have around $20 billion to spend on M&A (through a mixture of cash on hand, new debt, and incoming free cash flows). So, with a clear need for new sources of top-line growth and ample financial capacity for M&A, Biogen appears destined to pull the trigger on one or more bolt-on acquisitions before year's end -- a move that should finally change the narrative around its underperforming stock.
A big beaten-down biotech with plenty to offer
Keith Speights (AbbVie): Biotech stocks, in general, have performed pretty well so far in 2019. Not AbbVie. The big biotech is down year to date as investors worry about what's in store for the company now that sales for its top-selling drug, Humira, are beginning to slip. Many don't like AbbVie's planned acquisition of Allergan. I think, though, that this big beaten-down biotech stock has plenty to offer.
For one thing, AbbVie is dirt cheap right now. The stock trades at only seven times expected earnings. That low valuation would be warranted if AbbVie didn't have very good growth prospects. But that's not the case.
AbbVie recently won FDA approval for Skyrizi in treating psoriasis. The company should pick up another approval within the next few months for upadacitinib. The rheumatoid arthritis drug proved better than Humira in clinical studies. Market researcher EvaluatePharma thinks that it will be the No. 2 biggest new drug launch of 2019.
Meanwhile, AbbVie's cancer drugs Imbruvica and Venclexta continue to pick up momentum. The biotech thinks that Orilissa will become a blockbuster in managing endometriosis pain (an indication for which it's already won approval) and in treating uterine fibroids.
Don't forget AbbVie's juicy dividend, either. Its dividend currently yields north of 6.5%. And AbbVie has a terrific track record of hiking its dividend.
I'm skeptical about AbbVie's deal to buy Allergan. However, the company thinks that the acquisition will boost earnings by 10% within the first full year after the transaction closes and by more than 20% after then. We'll see, but the acquisition doesn't change my overall view about AbbVie.
Intriguing data on tap later this year
Todd Campbell (Mirati Therapeutics): Mutations to a gene contributing to cell growth and maturation called KRAS have been a focus of cancer research for 30 years, but until recently, KRAS mutations that can cause cancer cell growth and spreading have been considered "undruggable" because the gene lacked a specific target that a treatment could latch onto.
Last month, Amgen (NASDAQ: AMGN) reported clinical trial results for AMG-510, the first KRAS-mutation targeting medicine, that suggests researchers may have finally overcome this roadblock. If so, then Mirati Therapeutics shares could be worth buying ahead of the release of data from its own KRAS-targeting therapy, MRTX849, in Q4 2019.
In Amgen's phase 1 study, 5 out of 10 heavily pretreated non-small cell lung cancer (NSCLC) patients had a partial response and 90% had a partial response or stable disease following AMG-510. One of the five partial responders advanced to a complete response following the cutoff date for collecting data. Furthermore, 13 of 18 colorectal cancer patients achieved stable disease after beginning treatment.
There's no telling if Mirati's data will be similarly encouraging, but if it is, then it could be needle moving. Late-stage solid tumor cancer patients have limited treatment options and historically poor survival rates. The specific KRAS mutation targeted by Amgen and Mirati -- KRASG12C -- is found in roughly 13% of NSCLC and up to 5% of colorectal cancers. Across all solid tumor cancers, Mirati estimates the G12C addressable population to be as large as 24,500 in the U.S. alone.
Since Mirati is a clinical-stage, pure-play biotech and Amgen is a biopharma behemoth, a win for Mirati's drug will likely reward investors more -- especially if the data attracts the attention of a suitor looking to bolster its cancer R&D pipeline.
10 stocks we like better than Biogen
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Biogen wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
George Budwell has no position in any of the stocks mentioned. Keith Speights owns shares of AbbVie. Todd Campbell owns shares of Amgen. The Motley Fool owns shares of and recommends Biogen. The Motley Fool recommends Amgen. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | They selected Biogen (NASDAQ: BIIB), AbbVie (NYSE: ABBV), and Mirati Therapeutics (NASDAQ: MRTX). A big beaten-down biotech with plenty to offer Keith Speights (AbbVie): Biotech stocks, in general, have performed pretty well so far in 2019. Not AbbVie. | A big beaten-down biotech with plenty to offer Keith Speights (AbbVie): Biotech stocks, in general, have performed pretty well so far in 2019. They selected Biogen (NASDAQ: BIIB), AbbVie (NYSE: ABBV), and Mirati Therapeutics (NASDAQ: MRTX). Not AbbVie. | A big beaten-down biotech with plenty to offer Keith Speights (AbbVie): Biotech stocks, in general, have performed pretty well so far in 2019. They selected Biogen (NASDAQ: BIIB), AbbVie (NYSE: ABBV), and Mirati Therapeutics (NASDAQ: MRTX). Not AbbVie. | Not AbbVie. We'll see, but the acquisition doesn't change my overall view about AbbVie. They selected Biogen (NASDAQ: BIIB), AbbVie (NYSE: ABBV), and Mirati Therapeutics (NASDAQ: MRTX). |
24949.0 | 2019-06-30 00:00:00 UTC | 4 Reasons to Buy AbbVie Now That It's Acquiring Allergan | ABBV | https://www.nasdaq.com/articles/4-reasons-to-buy-abbvie-now-that-its-acquiring-allergan-2019-06-30 | nan | nan | What in the world was AbbVie (NYSE: ABBV) thinking? The big drugmaker stunned investors by announcing last Tuesday that it plans to acquire Allergan (NYSE: AGN) for $63 billion. Many view the deal as a huge mistake for AbbVie.
I'll admit that I was highly skeptical about the Allergan acquisition. Of all the deals that I thought AbbVie might make, Allergan never entered my mind. After having some time to think more on the proposed buyout, I'm still not totally convinced that acquiring Allergan is the smartest move for AbbVie. However, I do see some merits to the transaction.
More importantly, I think AbbVie is now a better stock for long-term investors to buy than it was prior to its announcement of plans to acquire Allergan. Here are four reasons why buying AbbVie makes more sense now than it did a week ago.
Image source: Getty Images.
1. Humira is less of a problem
Investors' worries about biosimilar competition for Humira have weighed on AbbVie stock for a while. Sales for AbbVie's top-selling drug are already slipping with European biosimilars on the market. In January, the company provided weaker-than-expected full-year 2019 guidance after international sales for Humira fell more than executives had anticipated.
There's no question that these worries about Humira have been the main reason for AbbVie's dismal stock performance this year. But with the Allergan deal, Humira is much less of a problem for AbbVie. The drug currently generates around 60% of AbbVie's total revenue. After the Allergan acquisition closes, Humira will account for less than 40%.
Of course, Humira will continue to generate lots of cash flow for AbbVie through 2023 (when U.S. biosimilars hit the market) and beyond. AbbVie basically sees the drug as its way to pay for the Allergan acquisition. The company plans to use the cash pulled in by Humira to pay down debt associated with buying Allergan.
2. The deal boosts AbbVie's growth prospects
Yes, several of Allergan's products face challenges of their own. Botox has a new lower-cost competitor on the market. Sales for Restasis are under pressure, and the drug will battle generic versions in a few years. Sales are also falling for glaucoma drug Lumigan and Allergan's Coolsculpting body contouring products.
But even with these challenges, the acquisition of Allergan should significantly boost AbbVie's growth prospects. Prior to announcing the Allergan deal, AbbVie projected that it would grow revenue by around 7% annually through 2023. With Allergan, the company expects revenue to increase by close to 10% per year -- higher than any other big pharma stock.
AbbVie also forecasts that the Allergan acquisition will increase its adjusted earnings per share by 10% in the first full year after the transaction closes. After that, the company expects a positive impact to peak adjusted EPS of more than 20%.
3. AbbVie's dividend looks even more attractive
The initial reaction to AbbVie's proposed buyout of Allergan was harsh, with AbbVie's share price plunging 15%. However, the flip side to this bad news was that the lower stock price makes AbbVie's dividend look more attractive than ever.
AbbVie's dividend yield now stands at a mouth-watering 6.5%. Does the Allergan acquisition change AbbVie's commitment to its dividend program? Not at all. AbbVie CEO Rick Gonzalez even told analysts in the conference call related to the Allergan transaction that AbbVie remains "absolutely committed" to growing its dividend.
4. The stock is ridiculously cheap
AbbVie appeared to be a bargain even before the Allergan acquisition was announced. Thanks to the sell-off last week, though, the stock is now ridiculously cheap.
Shares trade at a little over seven times expected earnings. That kind of valuation might make sense for a stock with no growth prospects. AbbVie, though, should have solid growth prospects. And I'm not talking about just over the next few years with Humira protected from biosimilar competition in the U.S.; AbbVie should be able to grow throughout the next decade.
The bottom line
Sure, I had hoped AbbVie would scoop up a few promising smaller biotechs in a "string-of-pearls" strategy that would cement the company's position as a leader in oncology. I didn't think that a big acquisition was the best move for AbbVie. But while I still have some misgivings about the Allergan deal, I also think that the negative reaction to the transaction was way overdone.
AbbVie is a stock that should deliver strong revenue and earnings growth plus fantastic dividends for years to come. The company has several new drugs with blockbuster potential -- including Orilissa, Skyrizi, and upadacitinib -- with others likely on the way. It's picking up a couple of blockbusters with solid growth prospects in Botox and Juvederm plus a fast-rising star with antipsychotic drug Vraylar.
Whatever you think about the merits of the Allergan acquisition, AbbVie appears to be a better stock to buy as a result of the announcement of this deal.
10 stocks we like better than AbbVie
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Keith Speights owns shares of AbbVie. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | More importantly, I think AbbVie is now a better stock for long-term investors to buy than it was prior to its announcement of plans to acquire Allergan. The bottom line Sure, I had hoped AbbVie would scoop up a few promising smaller biotechs in a "string-of-pearls" strategy that would cement the company's position as a leader in oncology. What in the world was AbbVie (NYSE: ABBV) thinking? | Humira is less of a problem Investors' worries about biosimilar competition for Humira have weighed on AbbVie stock for a while. The deal boosts AbbVie's growth prospects Yes, several of Allergan's products face challenges of their own. AbbVie's dividend looks even more attractive The initial reaction to AbbVie's proposed buyout of Allergan was harsh, with AbbVie's share price plunging 15%. | AbbVie's dividend looks even more attractive The initial reaction to AbbVie's proposed buyout of Allergan was harsh, with AbbVie's share price plunging 15%. AbbVie CEO Rick Gonzalez even told analysts in the conference call related to the Allergan transaction that AbbVie remains "absolutely committed" to growing its dividend. Whatever you think about the merits of the Allergan acquisition, AbbVie appears to be a better stock to buy as a result of the announcement of this deal. | Does the Allergan acquisition change AbbVie's commitment to its dividend program? Whatever you think about the merits of the Allergan acquisition, AbbVie appears to be a better stock to buy as a result of the announcement of this deal. What in the world was AbbVie (NYSE: ABBV) thinking? |
24950.0 | 2019-06-28 00:00:00 UTC | 4 Lower-Risk Healthcare Picks for Long-Term Investors | ABBV | https://www.nasdaq.com/articles/4-lower-risk-healthcare-picks-for-long-term-investors-2019-06-28 | nan | nan | Healthcare can be a scary space if you focus on the biotech and pharma side of it. Luckily, there's plenty more to the industry. In this week's episode of Industry Focus: Healthcare, host Shannon Jones talks with senior Fool analyst Jason Moser about his Healthcare and Wealthcare basket, a diversified clump of stocks with fantastic positioning in markets that are only getting bigger. Learn what makes the combo of UnitedHealth (NYSE: UNH), Teladoc (NYSE: TDOC), Masimo (NASDAQ: MASI), and Idexx Laboratories (NASDAQ: IDXX) so exciting for long-term investors. And, of course, can't ignore the merger news. Shannon and Jason explain what the massive AbbVie (NYSE: ABBV)-Allergan (NYSE: AGN) tie-up does and does not means for both businesses, why growth investors shouldn't get too excited, and what shareholders of these companies should know.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
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The author(s) may have a position in any stocks mentioned.
This video was recorded on June 26, 2019.
Shannon Jones: Welcome to Industry Focus, the show that dives into a different sector of the stock market every single day. Today is Wednesday, June 26th. We're talking Healthcare. I'm your host, Shannon Jones. I have a very special guest joining me here today, none other than Jason Moser, live and in the flesh, fellow Industry Focus Healthcare -- sorry, not Healthcare, Financials host.
Jason Moser: Sure, but one could argue the two are very interrelated.
Jones: It's all the same!
Moser: If you've got good financials, it'll keep you healthy. Bad healthcare will ruin your financials.
Jones: That's a great segue! I've got Jason here today to talk about his Healthcare and Wealthcare basket. Yes, it's all interconnected, all related. Jason, always thrilled to chat with you. I'm really excited to get into the Healthcare and Wealthcare basket. But before we do, it's probably good to dive into the news. I think I've seen 20 to 30 different headlines just today about this one merger.
Moser: The one deal.
Jones: We've gotten many emails, on Twitter, people are hitting me up. What do you think about it? It's all about this AbbVie-Allergan deal. Let's run through quickly here what that deal is all about. Then we can dive into our thoughts and opinions.
On Monday, AbbVie announced it would be acquiring Allergan, maker of Botox, in a cash-and-stock transaction worth about $63 billion. Each Allergan share would receive 0.866 AbbVie shares and $120 in cash. Roughly, that works out to about $180 a share, about a 45% premium on the prior day's closing. A pretty hefty premium. This is the second-largest deal of the year. A lot of the Industry Focus: Healthcare listeners will know we talked a lot about the Celgene-Bristol deal that kicked off this year at about $74 billion. AbbVie, though, trading down about 14% on the news. Allergan, up about 25%. Not uncommon to see the acquirer get beat up. But they're getting slammed.
Moser: It does seem like the disparity is a little bit bigger than normal.
Jones: Yeah. So, we'll dive into all of that and more. One thing, Jason, here at Fool HQ, there is not literally one person I've met so far that has said, "Wow, this is a great deal! I can't believe they waited so long to do this!"
Moser: [laughs] It feels like we're all like, "Yeah, I get it." It's one solution to what seemed like a problem that wasn't going away. It sounded like there was a lot of noise being made for Allergan to split up in some capacity, to maybe realize some value for shareholders that way. This is the opposite of splitting up, joining forces with another company. It does seem like, at least, the two joining together, they're somewhat complementary. I don't know there's a heck of a lot of overlap there. In a space where scale obviously matters, particularly when you're facing problems like Allergan certainly is facing, a lot of key drugs coming off patent, some drugs that they were hoping for a bit more success and aren't panning out, and slowing growth across all lines. It's understandable. I'm not sure that I necessarily think it's the best thing in the world. But it's a big deal, like you said.
Jones: It's a huge deal. $63 billion. You've got basically two mediocre companies that have been looking for growth literally anywhere, now joining forces to become one humdrum, mediocre company, still looking for growth.
Moser: "Mediocre" is the perfect word.
Jones: Let's talk a little bit about AbbVie. You mentioned this. They have been desperately in need of diversification. Their bread-and-butter drug is Humira. It made about $20 billion last year, about 60% of sales. A huge chunk of their revenue. But it's facing a huge patent cliff. Actually went off its core patent I believe in 2016. But it's that patent exclusivity, particularly here in the U.S., that is on tap for 2023. AbbVie and their legal team -- I have to commend them, they're probably one of the most creative legal teams out there, aside from Allergan -- they've been trying to stem the tide. They've done over 100 different add-on patents to push away a lot of the competition. Hasn't really worked. We've already seen biosimilars in Europe starting to drive down sales. Humira, during the first quarter of the year, global sales fell about 23% already, ahead of this 2023 time frame. AbbVie here is desperately trying to throw the kitchen sink at the problem, but there just hasn't been anything meaningfully accretive to their top line, particularly when it comes to their pipeline. They've got an approved drug, several in the pipeline. You're looking at maybe about $9.5 billion in annual sales just coming from expected drugs. That's not nearly enough to take care of that $20 billion Humira problem.
Moser: No, and you look on the other side of the coin there with Allergan, they're facing a lot of the same problems there. I was digging into their 10-K yesterday to get a better idea of how reliant they are on Botox. I think that's the name probably most people associate with Allergan. Botox is interesting in that most people probably think of it as an injection to help cure wrinkles. It's somewhat...
Jones: You can say it, Jason. You can say it.
Moser: I don't want to say superficial, but I think it's kind of silly, personally. We all get older. Just accept it, embrace it. But some people don't, so Botox cosmetics helps that. There is a Botox therapeutics side of the business, which is something we always need to mention. There are migraine implications where Botox does help. It's not a drug that is purely cosmetic. But either way, when you combine the two together, you're talking about over $2.5 billion in sales that Botox is responsible for Allergan. That growth rate is slowing down a lot as well. Between Botox slowing down, the patent cliff that you were talking about there, it goes back to that thing you said. You've got two mediocre companies coming together. I don't know that necessarily makes for one great company. Maybe it makes for a big mediocre company. Is that something we want to invest in?
Jones: Not necessarily, Jason. Not for me personally. We actually got a question about this, like, "What should I be doing with this as an AbbVie shareholder?" -- and even some from Allergan shareholders. I think, from an Allergan perspective, you talked about Botox. This is a drug, it's their bread and butter, as you mentioned, but they're already facing generic competition. The FDA approved a cheaper version of Botox. We actually did a show on it in February, about the wrinkle wars that are now starting with a company called Evolus. You've got your bread-and-butter drug under pressure, their No. 2 drug, Restasis, which is for eye disease, also facing generic competition coming in 2024. Of course, just like AbbVie, they've been trying to throw the kitchen sink at this problem. I don't know if you remember this, but Allergan was the company that, to try to protect their patents, they actually attempted to sell it to a Native American tribe for patent immunity.
Moser: Huh. I don't remember that. [laughs] Oh, my God!
Jones: One of the most bizarre legal cases I've ever heard. Even from a strategy perspective, really strange. So I think there was a lot of doubt cast on Brent Saunders with Allergan after that. This is a company very much under pressure. You've got two companies trying to hold things together. Also, Allergan has a massive amount of debt, to the tune of about $21 billion. If this deal goes through, it would make for a combined balance sheet net debt of $18.5 billion, plus another $40 billion added to get this deal closed.
Moser: Yeah. This is a market where debt loads are usually pretty heavy because these companies have to invest so much money in developing these drugs, and typically, you need to develop a lot so you have a pipeline that can shore up any weakness or headwinds when you run into situations. So, they tend to feed on a lot of debt, which is fine, to a degree. Typically, they add the income statements that can help facilitate and cover that debt. But it's always something worth noting, particularly if you see two companies like this that are really running into some headwinds growth-wise.
Jones: Yeah. I think with Allergan here, what AbbVie is trying to do with this acquisition, it's not about growth, it's very much more about, we need to fund R&D and we need to pay down some debt. You've got these cash cows like Botox that I think can help them do that, but this is definitely not a growth story. If you're a growth investor, don't expect to see any growth or innovation. Allergan is not one that invests heavily in R&D in and of itself. This is really about debt, and it's also about funding continual R&D.
It still leaves the question, Jason, where is growth going to come from with this combined company? That's still the bigger question, and why you saw AbbVie take such a hard hit right after this news was announced.
Moser: I feel like maybe this is a defensive acquisition. Do you think that's a good way to put it? On AbbVie's part.
Jones: I think that's fair. It's a very expensive defensive acquisition at $63 billion. That's a four-times multiple on 2018 revenue right now -- which is not unheard of in the biopharma space, but those multiples tend to go with growth opportunities, not so much from a defensive play.
I can see why they did it, but I would have loved to see AbbVie actually go after maybe smaller incremental deals that could actually drive growth long-term, rather than one huge, massive $63 billion deal. It didn't address the issues that a lot of the investors have been poking and prodding AbbVie for.
You still have a lot of lingering question marks. If this deal closes -- it's expected to close in early 2020 -- we'll have to wait and see what that looks like. But ultimately, to your point, this is just a defensive play. If you're an investor shareholder in either of these companies, as long as you're comfortable with that, and recognize this is not necessarily about growth, I think you're OK.
Moser: You raised a really good point there. I feel like, if I were going to be on that call and ask management one question, it would be along the lines of what you were talking about there. Instead of making this one mammoth acquisition, why wouldn't you go out there and try to find a bunch of smaller pipelines with some more attractive prospects? To your point, that is a ton of money they're spending on basically one business with some questionable prospects. I have to believe there are a lot of smaller little biotech opportunities out there with some pipelines. Kind of the way we talk about investing in this space anyway, right? Taking that basket approach, invest in a bunch of small biotechs, because some of them won't pan out, but some of them will. Why wouldn't they take that same approach? Clearly, they have the money to do it. I guess we'll never know.
Jones: We'll never know. We'll never know.
Moser: We'll have to get on their next quarterly call and ask them that very question, Shannon.
Jones: I'll hold you to it, Jason.
Moser: OK!
Jones: We'll be sure to keep all of our listeners up to date on all the latest happenings with this deal as it pans out. Jason, before we dive into the stocks in your Healthcare and Wealthcare basket, let's set the stage a little bit for our listeners who may not be aware -- what led you to this basket approach, specifically this basket approach within the healthcare and wealthcare space?
Moser: Probably some folks are familiar with the War on Cash basket that I did. That was something that came to be with Chris Hill and I just lobbing back the question every quarter on MarketFoolery as to why we hadn't bought stocks in some of those companies, because clearly, it was a huge market opportunity. What I'd thought was, it's a big market opportunity, and it's not like you have to pick one winner. That was the impetus behind this basket as well. When you look at healthcare, as you and our listeners know, it is a massive market opportunity, not only on a domestic level, but a global level.
To put that into context, when you look at total national health expenditures as a percent of GDP here, just in the country, you're talking about a number that's closing in on 20%. It is a big part of our overall economy, and that number is only continuing to go up. I don't think it's reasonable to assume that our neighbors here across the river are going to crack the code of healthcare anytime soon. It's going to be an expensive market that'll keep on growing. So I thought, well, I like big and growing market opportunities, and there's not one company that's going to win this space, there are a lot of them. So I just took a stab at trying to find some of the companies in the space that I felt like could do well in the coming five, 10 years.
Jones: Great! A basket approach. I think it makes a lot of sense, Jason. We recently put out, I believe it was an Instagram question, about, do you invest in healthcare stocks? I'd say the No. 1 theme for those that said they did not was because they felt it was too risky. For a lot of them, they were talking about biotech and pharma, which is exactly right. Very risky, very aggressive strategy. But I like the basket approach, in particular the stocks that you have in this basket, because each of these stocks -- we'll get to them in a second -- serves a very critical need within the healthcare system. They have opportunities, given all the reasons you just said, when it comes to pricing, when it comes to efficiency. This is just a simpler, less risky way to invest for those who are wanting some healthcare exposure but don't necessarily want to go the biotech/pharma route either.
Moser: I do appreciate that. The biotech space is really risky. People probably associate that most with investing in healthcare, because those are probably the companies that get most of the headlines. A lot of that's just because of that sexy growth everybody's looking for. It's that growth. Everybody's looking for a way to get rich quick. This certainly is not meant to do that. It is something where I felt like I could put together four companies that gave us a nice risk profile that investors are looking to pursue. This is not a basket where these are all high-risk names. It is certainly not the only way to do this. This is one way to do it. It is a way I did it. You can tell me I'm wrong and I won't be offended. You can give me some other names that should be in the basket, and I will likely agree with you. [laughs] But you have to draw the line somewhere, so I drew it at four companies. Typically, I look for anywhere from four to six companies to go in one of these baskets. These are companies that I've covered for a long time. To your point, I think they all fire in on their own specific part of the healthcare system where they're going to continue, I think, to grow for the foreseeable future.
Jones: Yeah. Let's start with the first one. This is insurance company UnitedHealth Group, ticker UNH. Jason, tell us about this one. Why did it come across your screen, your radar? What makes it so interesting to you?
Moser: We all like having access to healthcare, right?
Jones: For the most part.
Moser: We want to have access to it. It's a bit nebulous at times as to how we exactly do have access to it. You have a job, you get health insurance, it's not clear exactly who that's with or what you get, or how much you're going to owe when you go to the doctor, because it doesn't seem like there's any real standard pricing model anywhere at this point. But the bottom line is that the healthcare system, for the foreseeable future, is not going to work without insurance.
UnitedHealth is the largest insurance company in the space, domestically and globally speaking, it is certainly spreading its wings. You look at a company in a market where the service they provide is going to be essentially necessary for the foreseeable future; the size of the company matters, I think, in this case; and there are huge barriers to entry when it comes to health insurance. It's not like you and I could go start a health insurance company. I mean, we could, but we would probably fail, because there's a lot to do in just getting that business started. They've already done a lot of that hard work. The size of the company tells you they've been doing a pretty good job at it. With vast financial resources, they're very well-positioned to deal with any and all changes that come to the regulatory landscape in the coming years. It's a big company, it's a little bit lower on the risk profile. But that was the point, to give us a bedrock company. We know it's not going to be growing terribly quickly, but it probably shouldn't have the rug pulled out from under it, either.
Jones: Yeah. I love this pick, Jason! It's really about the scale and the size of this company. You mentioned it's the largest insurer in the business. Also, single largest employer of physicians. More than 35,000 physicians. Largest in terms of the pharmacy benefit managers. They processed over $160 billion in payments. It's the size and the scale that I think is important when we talk about cost efficiency with healthcare. When you have that type of size -- also, this is a company that's really been focused on data and analytics, more so than many of the others -- that plus size and scale, if I had to put my pick on one company that I think could help drive down costs, it would be UnitedHealth.
Moser: I'm glad you said that. I think a lot of people will immediately think UnitedHealth, the largest insurer, healthcare for profit, this is an evil company. I understand that perspective, but I would encourage you to look at it from the other angle. It's not like UnitedHealth is the company that set up our healthcare system in this country. That's something that's been in the works for many, many years. Essentially, our politicians have given us what we've got. There are all sorts of different philosophies and takes on healthcare. I would encourage you to go read a book called The Healing of America by T.R. Reid. It's a great book! He basically travels the globe and looks at healthcare systems in all different countries and compares them to ours to show where they're doing better, where we're doing better. The No. 1 takeaway from the book is, this is not an easy problem to solve anywhere. If you think that other countries have it all figured out, well, read that book, you'll see it's not quite so cut-and-dry.
But yeah, I do agree with you. With a company this size, with its resources, they are going to be able to play a role in helping drive down the cost of healthcare. I think it's also reasonable to say this is a company that has to answer to shareholders, which means they need to maximize profitability. There is a bit of a delicate dance there, for sure.
Jones: Oh, for sure! As we come up to the 2020 presidential election, we've heard a lot of rhetoric, Medicare for All. We'll have to see how that plays out. But this is a company that was able to navigate the Affordable Care Act waters very well. I have no doubt about them being able to navigate anything that comes down the road, should it happen.
Moser: I tend to agree.
Jones: Let's talk about this second one. The second company, a medical device company. This is Masimo Corporation, ticker MASI. Jason, tell us what exactly they do and why this one is compelling.
Moser: This is one probably not as many are familiar with. Back in 2011, we had a thing that we did here on fool.com, some of us decided we wanted to try to run a real-money portfolio in a public-facing manner, and we were able do that. It was this initiative called Rising Stars. Masimo was a company that I found for that portfolio and bought in that portfolio back in 2011. It struck me in researching the company, what they do -- I'll translate this -- they're in the business ultimately of pulse oximetry. Whenever you go to the hospital, if you have to check in for surgery or anything like that, typically, you're going to have something in there, a device, some equipment, that measures the oxygen levels in your blood, among other things. It's essentially required. You have to have that. Doctors need that in order to assess how you're doing. Masimo is in the business of that. They make those devices. They make the equipment and the consumables that help all of that happen. It's an interesting company from the perspective that the founder, Joe Kiani, founded the company essentially in his garage. He figured out how to build this technology, then just ran off with it. Nobody has been able to develop something better.
And now the company is celebrating its 30th anniversary. They've gone beyond pulse oximetry into other testing equipment and monitoring equipment. They have a beautiful razor-and-blade model. They get that big equipment in the hospital, and then the hospital has to keep buying those consumables. It gives the company this opportunity to continue to innovate. The numbers tell us that hospitals like the technology. I like the founder-led culture. It's a little bit of a higher-risk play than UnitedHealth, but still a fairly well-established company. I own shares in it personally, too. One that will continue to do well.
Jones: They've actually got an augmented-reality play as well.
Moser: They do!
Jones: It's really interesting to me, especially as we talk about the delivery of healthcare, staying connected, being able to make decisions faster. Tell us about this AR.
Moser: I think that's the cool thing about companies like these, small, founder-led companies where they're not beholden to all of this red tape and trying to figure out what they want to do. They're essentially going with one guy's vision and the things that he wants to do. He's assembled a team of innovators with them, and they try all these different things. When you talk about augmented reality and virtual reality, and how technology is going to help our healthcare system, eyewear, I think, is the big medium for augmented-reality technology in the coming years. You have Google [Alphabet] and Microsoft and other companies that are working on those types of things. Incorporating monitoring equipment or monitoring platforms for physicians, for example. When they're in the hospital, regardless of where they are in the hospital, they can see a patient's progress or vitals right then and there. That's a good example of what Masimo is doing to incorporate more technology into their business.
This company in particular is still very early days in how they're incorporating that. But reading about the things that they're trying, it's a pretty cool business. Again, I think it all boils back down to the founder and CEO. The nice thing is, he's a young guy, too, so we should have a lot of years left to watch him do his thing.
Jones: He's got a long runway! All right, I love the play there, especially with innovation. Of course, we can't talk about redefining healthcare without talking about the third stock in your basket. That is Teladoc, ticker TDOC. We've talked about Teladoc on the show. Jason, tell our listeners, what do they do, for those who may not be aware.
Moser: Ultimately, it's virtual healthcare, seeing the doctor over the internet. This is a really neat business. I started following this business shortly before it went public. I had spoken with a friend of mine at the Dallas Business Journal at the time. We were talking about the company going public and what its chances were. And even back then, I thought, they're solving a problem that exists. It made me think back to, David Gardner talks about with Amazon, there was so much skepticism back then that people would ever even consider putting their credit card information on a website and buy something from a website. There's just no way! There's no security! Balderdash!
Jones: Sorcery!
Moser: Fast forward to today, we obviously know that result there. Anybody in the world pretty much knows that going to the doctor's office is not a pleasant experience. It's not always necessary, either. I think that's what this company was geared on from the beginning, is trying to become that new front door for the medical care experience. There are situations where you don't necessarily need to go to the doctor's office. Teladoc has built a nice virtual healthcare app that enables people to go ahead and use that app as essentially that first step in their healthcare pursuit. I can use a specific example that happened to me in my life, where I immediately thought, "I'm sold, this is for real." I'm sure some people have heard this story before. I was taking my daughter to a horseback riding lesson. I saw that my eye was turning red. You have kids, you know what pinkeye is. And I thought, "Oh, God, now I've got pinkeye." You know how you've got to go to the doctor, get a prescription for the drops, it's a waste of a day. So I parked in the parking lot. My daughter goes in, starts riding. I opened my phone, opened the Teladoc app. Twenty minutes later after having a video chat with a doctor in Texas of all places -- we're in Virginia -- she was able to diagnose the pinkeye, e-prescribed the eyedrops to the CVS by our house. I picked them up on the way home. Problem solved. $15 co-pay. Easy peasy, lemon squeezy, as they say.
That's ultimately what they're doing. They're not trying to say, "If you have a heart attack, you can use Teladoc." That's not what you do. But there are cases where it does work. I think what we're seeing now is buy-in in the virtual-healthcare space. The regulatory barriers have all been cleared. The regulatory environment has been changed to accept virtual healthcare. UnitedHealth is another business that is helping shape that. Believe it or not, Teladoc is actually a partner of Optum with UnitedHealth. Big base there, as well.
Jones: Yeah. A huge growth opportunity -- 85% of the U.S. will contact a health professional in any given year. That translates to about a billion office visits annually. Teladoc has the potential -- actually, right now, they're doing about two million of them. When you look at that runway over the long term, huge opportunity. Mental health is one huge area. I think with a lot of the stigma associated with mental health, and it's becoming much more OK to talk about, and people are wanting assistance with mental health, that's a huge opportunity, as well, for Teladoc.
Moser: It is. You mentioned a good word there, the stigma that's associated with mental healthcare. Finally, now, we have a way where someone can pursue mental healthcare without necessarily having to even leave their home. I think that really opens people up to the possibilities of even asking for help in the first place. If you feel like you need that help, and then there's the option for you to actually have a visit without ever having to leave your home, that's the ultimate form of privacy right there. We're certainly seeing the company making big investments in that space as well. It does seem like mental health is becoming a more talked-about thing here, nationally speaking. That's my perception.
Jones: Totally.
Moser: That's a good thing.
Jones: Totally agree. I think for a company like this, it's all about access. But that brings us to the fourth stock in your basket, Jason. Access is not for humans, it's also for our furry animal friends within our family. That brings us to Idexx Laboratories, ticker IDXX. Jason, we're literally covering the entire gamut of healthcare. We've got animals now!
Moser: One of these things is not like the other. Listen, this is coming from the perspective of the owner of three dogs. I've got three dogs at home. I grew up with a house full of dogs and my mom's cat. We've had animals and pets all of my life. I have a very, very soft spot in my heart for them. I could never imagine a day without them. I've been following this company for years, and part of the reason why I discovered them was because of my veterinarian. We talked about Masimo being a razor-and-blade model. Idexx is a razor-and-blade model as well. They get that equipment into the labs of the veterinarians, and then the veterinarians use the consumables to run diagnostic tests. Typically with pets, it's fairly standard. You take them in for their annual checkup, they get their shots and whatnot. But what veterinarians are finding is, particularly as pets get older, there are simple little diagnostic tests they can run via either urine or fecal or blood to discover if there are issues that are coming up far earlier that you need to address.
Between that, the fact that the pet care market is such an attractive one because we feel so strongly about our pets, and it's typically a cash business. I know there's pet insurance, but most people don't use it, and I'm still not convinced that it's actually a really credible market anyway. There's a lot of things to like about what Idexx is doing. It's a competitive space, for sure. One of their competitive advantages is that they continue to reinvest in their business and develop new tests and diagnostic equipment and things. That would be a concern of mine, if they started pulling on those purse strings a little bit. Then I'd be a little bit concerned. But as it stands, they continue to invest heavily, bring new products. They've got a great reputation with veterinarians, particularly the private practices. A lot to like there. It's really a play on what is, I think, a very attractive market in pets. Do you have any pets?
Jones: I don't. My husband is allergic to anything with fur. We're working on him, though. I grew up with dogs. I have a huge heart for animals in general, so does my daughter. We'll get there. But, yeah, I could see a company like this, with such a massive focus on pet care in general. I think that's an area that doesn't get enough focus right now.
Moser: Probably not.
Jones: The medicinal market for pets is huge. CBD now for pets!
Moser: Yeah. I was talking yesterday on MarketFoolery about Zoetis, which is the company that was spun out from Pfizer and they're the ones that developed those vaccines and medicines for animals. Whenever I go to the vet, I'm not lying to you, that bill, I see Idexx and Zoetis on there. You now understand why I own shares in both companies. I'm getting at least something back for that money I'm putting out there.
Jones: At least something you're getting back there, Jason! To close this out, Jason, tell us a little bit about performance. How has this basket done for you?
Moser: Well, the basket has done very well, I'm proud to say. The date of inception of this basket was February 9th, 2018. That's when I opened it up and introduced it to everybody. Thus far, an investment in this basket is up 55%, versus the market's performance of 11.4%. It's done very well. All four companies are absolute positive returners. Three of the four are beating the market. I will say, the one that is underperforming the market, which is UnitedHealth, is underperforming the market by 0.5%. It's pretty close. But any which way you look at it, they're all four contributing to the performance there. I think that's slated to continue.
Jones: Yeah, pretty stellar performance. Jason, I'll have to have you back on the show, because we want updates on how this basket is performing. Think you'll rejoin me back on the show?
Moser: You know I'll be here anytime you ask me!
Jones: I appreciate that! I'm sure our viewers do as well. That will do it for this week's Industry Focus: Healthcare show! Thank you so much for tuning in! As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. This show is being mixed by Austin Morgan. For Jason Moser, I'm Shannon Jones. Thanks for listening and Fool on!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Alphabet (C shares), Amazon, Idexx Laboratories, Masimo, Teladoc Health, Twitter, and Zoetis. Shannon Jones owns shares of Amazon. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Celgene, Idexx Laboratories, Masimo, Microsoft, Teladoc Health, and Twitter. The Motley Fool recommends CVS Health and UnitedHealth Group. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shannon and Jason explain what the massive AbbVie (NYSE: ABBV)-Allergan (NYSE: AGN) tie-up does and does not means for both businesses, why growth investors shouldn't get too excited, and what shareholders of these companies should know. It's all about this AbbVie-Allergan deal. On Monday, AbbVie announced it would be acquiring Allergan, maker of Botox, in a cash-and-stock transaction worth about $63 billion. | Shannon and Jason explain what the massive AbbVie (NYSE: ABBV)-Allergan (NYSE: AGN) tie-up does and does not means for both businesses, why growth investors shouldn't get too excited, and what shareholders of these companies should know. It's all about this AbbVie-Allergan deal. On Monday, AbbVie announced it would be acquiring Allergan, maker of Botox, in a cash-and-stock transaction worth about $63 billion. | Shannon and Jason explain what the massive AbbVie (NYSE: ABBV)-Allergan (NYSE: AGN) tie-up does and does not means for both businesses, why growth investors shouldn't get too excited, and what shareholders of these companies should know. It's all about this AbbVie-Allergan deal. On Monday, AbbVie announced it would be acquiring Allergan, maker of Botox, in a cash-and-stock transaction worth about $63 billion. | Jones: Let's talk a little bit about AbbVie. Shannon and Jason explain what the massive AbbVie (NYSE: ABBV)-Allergan (NYSE: AGN) tie-up does and does not means for both businesses, why growth investors shouldn't get too excited, and what shareholders of these companies should know. It's all about this AbbVie-Allergan deal. |
24951.0 | 2019-06-28 00:00:00 UTC | Are AbbVie and Allergan Really Better Together? | ABBV | https://www.nasdaq.com/articles/are-abbvie-and-allergan-really-better-together-2019-06-28 | nan | nan | The news that AbbVie (NYSE: ABBV) had inked a $63 billion deal to buy Allergan (NYSE: AGN) was not met with applause on Wall Street Tuesday. Given that the share price of Allergan is now trading far below the bid price, there are clearly questions about whether the acquisition will go through. And the response reflected in AbbVie's stock move makes it clear that investors think it's overpaying -- though the deal price is less than half of what Pfizer intended to pay just three years ago.
In this segment of the MarketFoolery podcast, host Chris Hill and senior analyst Jason Moser discuss why these two companies might be better off together, why they might not, the value of Allergan's powerhouse Botox franchise, the market's views, and the possibility that we might be at the start of a societal shift away from such heavy use of prescription drugs.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
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This video was recorded on June 25, 2019.
Chris Hill: We're going to start with a big deal, this time in the healthcare space. I'm saying healthcare. The huge umbrella of healthcare. AbbVie buying Allergan. Allergan, the maker of Botox. This is a $63 billion deal, cash and stock. Allergan, if you're a shareholder, you're having a heck of a good day because the buyout price is 45% higher than yesterday's close. I am curious, though, at the fact that Allergan is now only trading up about 25%-28% higher. We'll get to whether or not this deal goes through. This is yet another big deal.
Jason Moser: Whether it goes through is going to be interesting, just from the perspective that it wasn't all that long ago that there was an offer made for Allergan for quite a bit more than today's offer. But then also, the recent calls have been for the company actually to split up and spin off some of its assets to realize more value that way. And then you find yourself where you are today as a shareholder, the deal, is that going to be the best way to realize value for Allergan shareholders? I don't know. Maybe. I feel like it is a deal that brings together two companies that can likely do more together than separately. There's not a lot of overlap there.
I look at this space, it feels like the chip maker space in the sense that they're always stuck on this wheel of never-ending innovation. You've always got to come up with something new, the next big thing. If you don't come up with that next big thing, the fall from grace can be pretty severe.
Allergan, I think most people probably know it for Botox. I'm a little bit conflicted there. I know there's some therapeutic implications there with migraines. It seems to be more something people associate with wrinkles and cosmetic stuff. You have to wonder how necessary that is, other than just someone's vanity, and I don't have a lot of sympathy for that. But it's a difficult line of work. Drugs face a lot of scrutiny. There are going to be plenty of failures. It's questionable, honestly, today, whether you should be using some of them. Interesting to see how this all plays out.
Hill: Yesterday, Dan Kline and I talked about the merger in the casino industry with Eldorado and Caesars. That's one that, at least to hear Dan Kline tell it, over the long term, he feels good about that deal. Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months.
Moser: Yeah. We talk about that a lot. The acquirer usually feels a little bit of a pinch on the day of a deal. The acquired feels a little bit of a bump. It does seem like these are heavier reactions than we might normally see. I do get that. When you look at Allergan, its overall business, you're talking essentially, between Botox cosmetics and therapeutics, that's more than $2.5 billion of the company's overall sales, and that growth is clearly slowing down, if you look at those numbers. But then, when you look at the two companies combined, there are risks out there when it comes to generics. A lot of these drugs that they've been benefiting from for so long are starting to come off patent now. Generics are a common threat. There was a depression drug recently that Allergan had trouble with.
I do think we are hitting a new generational mentality that is going to question whether we need a lot of these drugs, whether it's depression -- I mean, they're serious problems. I'm not making light of something like depression. Any of these things require attention. But these commercials for these drugs, it takes more time for them to read off the side effects and potential implications as opposed to the benefits of the drug. Remember that Simpsons -- God, I'll always go back to the Simpsons. Remember that Simpsons a while back, where Homer was approached to be the spokesman for Viagragain? Remember that? "It gives you a lot of hair and what you need down there." [laughs] But then, "Possible side effects include loss of scalp and penis." That's what was said next, and that's what these drugs always feel like! You see this little benefit, and you're like, "That's nice!" Then you hear about the side effects, and you're like, "Why the hell would I take that thing? It sounds like I may die! Maybe I'd rather do it on my own terms." There is something they have to figure out there. I'm not sure it's so simple. It does feel like this space is only becoming more pointed in that direction, where you question the benefits vs. the costs. So, the consolidation is not terribly surprising. But two companies with slowing growth doesn't necessarily make one company that can then accelerate growth.
Chris Hill has no position in any of the stocks mentioned. Jason Moser has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And the response reflected in AbbVie's stock move makes it clear that investors think it's overpaying -- though the deal price is less than half of what Pfizer intended to pay just three years ago. The news that AbbVie (NYSE: ABBV) had inked a $63 billion deal to buy Allergan (NYSE: AGN) was not met with applause on Wall Street Tuesday. AbbVie buying Allergan. | The news that AbbVie (NYSE: ABBV) had inked a $63 billion deal to buy Allergan (NYSE: AGN) was not met with applause on Wall Street Tuesday. And the response reflected in AbbVie's stock move makes it clear that investors think it's overpaying -- though the deal price is less than half of what Pfizer intended to pay just three years ago. AbbVie buying Allergan. | Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months. The news that AbbVie (NYSE: ABBV) had inked a $63 billion deal to buy Allergan (NYSE: AGN) was not met with applause on Wall Street Tuesday. And the response reflected in AbbVie's stock move makes it clear that investors think it's overpaying -- though the deal price is less than half of what Pfizer intended to pay just three years ago. | Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months. The news that AbbVie (NYSE: ABBV) had inked a $63 billion deal to buy Allergan (NYSE: AGN) was not met with applause on Wall Street Tuesday. And the response reflected in AbbVie's stock move makes it clear that investors think it's overpaying -- though the deal price is less than half of what Pfizer intended to pay just three years ago. |
24952.0 | 2019-06-27 00:00:00 UTC | Big Pharma Gets Bigger | ABBV | https://www.nasdaq.com/articles/big-pharma-gets-bigger-2019-06-27 | nan | nan | In this episode of MarketFoolery, host Chris Hill talks with senior analyst Jason Moser about some fresh business news. AbbVie (NYSE: ABBV) and Allergan (NYSE: AGN) plan to join up, but the market doesn't seem that happy for them. Warren Buffett cryptically reported that there's no tension between Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) and 3G (and their terrible investment that is Kraft Heinz (NASDAQ: KHC)). Doth the world's most famous investor protest too much? Plus, Moser shares some investing takeaways he had during his vacation. Find out what makes Zoetis (NYSE: ZTS), Spotify (NYSE: SPOT), and Slack (NYSE: WORK) companies to watch, and mourn the fact that the eternally useful TripAdvisor (NASDAQ: TRIP) can't figure out how to build a compelling business.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
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*Stock Advisor returns as of June 1, 2019
The author(s) may have a position in any stocks mentioned.
This video was recorded on June 25, 2019.
Chris Hill: It's Tuesday, June 25th. Welcome to MarketFoolery! I'm Chris Hill. Joining me in studio, back in the United States of America, it's Jason Moser, looking tanned, rested, and ready.
Jason Moser: I feel like, in my defense, I probably am always looking tanned to some level. I was adopted, so I don't know necessarily the bloodline there, but we've all determined that there must be some Mediterranean in me.
Hill: But as someone who sees you pretty much every day, you're looking tanner.
Moser: Maybe a little bit tanner. There was a lot of sun there. You're a little bit closer to the equator in Costa Rica.
Hill: Yeah. We'll get to that. And we'll get to some drama, or maybe not drama, between Warren Buffett and 3G Capital. We'll unpack that as well. Once again, we're going to start with a big deal. This time in the healthcare space. I'm saying healthcare. The huge umbrella of healthcare. AbbVie buying Allergan. Allergan, the maker of Botox. This is a $63 billion deal, cash and stock. Allergan, if you're a shareholder, you're having a heck of a good day because the buyout price is 45% higher than yesterday's close. I am curious, though, at the fact that Allergan is now only trading up about 25-28% higher. We'll get to whether or not this deal goes through. This is yet another big deal.
Moser: Whether it goes through is going to be interesting, just from the perspective that it wasn't all that long ago that there was an offer made for Allergan for quite a bit more than today's offer. But then also, the recent calls have been for the company actually to split up and spin off some of its assets to realize more value that way. And then you find yourself where you are today as a shareholder, the deal, is that going to be the best way to realize value for Allergan shareholders? I don't know. Maybe. I feel like it is a deal that brings together two companies that can likely do more together than separately. There's not a lot of overlap there.
I look at this space, it feels like the chipmaker space in the sense that they're always stuck on this wheel of never-ending innovation. You've always got to come up with something new, the next big thing. If you don't come up with that next big thing, the fall from grace can be pretty severe.
Allergan, I think most people probably know it for Botox. I'm a little bit conflicted there. I know there's some therapeutic implications there with migraines. It seems to be more something people associate with wrinkles and cosmetic stuff. You have to wonder how necessary that is, other than just someone's vanity, and I don't have a lot of sympathy for that. But it's a difficult line of work. Drugs face a lot of scrutiny. There are going to be plenty of failures. It's questionable, honestly, today, whether you should be using some of them. Interesting to see how this all plays out.
Hill: Yesterday, Dan Kline and I talked about the merger in the casino industry with Eldorado and Caesars. That's one that, at least to hear Dan Kline tell it, over the long term, he feels good about that deal. Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months.
Moser: Yeah. We talk about that a lot. The acquirer usually feels a little bit of a pinch on the day of a deal. The acquired feels a little bit of a bump. It does seem like these are heavier reactions than we might normally see. I do get that. When you look at Allergan, its overall business, you're talking essentially, between Botox cosmetics and therapeutics, that's more than $2.5 billion of the company's overall sales, and that growth is clearly slowing down, if you look at those numbers. But then, when you look at the two companies combined, there are risks out there when it comes to generics. A lot of these drugs that they've been benefiting from for so long are starting to come off patent now. Generics are a common threat. There was a depression drug recently that Allergan had trouble with.
I do think we are hitting a new generational mentality that is going to question whether we need a lot of these drugs, whether it's depression -- I mean, they're serious problems. I'm not making light of something like depression. Any of these things require attention. But these commercials for these drugs, it takes more time for them to read off the side effects and potential implications as opposed to the benefits of the drug. Remember that Simpsons -- God, I'll always go back to The Simpsons. Remember that Simpsons a while back, where Homer was approached to be the spokesman for Viagragain? Remember that? "It gives you a lot of hair and what you need down there." [laughs] But then, "Possible side effects include loss of scalp and penis." That's what was said next, and that's what these drugs always feel like! You see this little benefit, and you're like, "That's nice!" Then you hear about the side effects, and you're like, "Why the hell would I take that thing? It sounds like I may die! Maybe I'd rather do it on my own terms." There is something they have to figure out there. I'm not sure it's so simple. It does feel like this space is only becoming more pointed in that direction, where you question the benefits vs. the costs. So, the consolidation is not terribly surprising. But two companies with slowing growth doesn't necessarily make one company that can then accelerate growth.
Hill: Speaking of slowing growth, let's talk about Kraft Heinz. Shares are down about 50% or so this year. There have been reports of trouble between Berkshire Hathaway and 3G capital. Bears remembering that those two teamed up a few years back to buy Kraft Heinz and got a lot of headlines at the time, and rightly so, in part because Warren Buffett had, up to that point, a track record of making acquisitions essentially on his own. So at the time, it was like, "Wow, here's this new deal." Also, Buffett has been critical in the past of private equity. It raised a couple of eyebrows that Berkshire Hathaway would team up with a private equity firm, even one with the reputation of 3G Capital, and then go out and buy Kraft Heinz.
Apparently, these reports... you hear little rumblings here and there. It never struck me as something that was front-page news. Maybe I missed it. I don't know that The Wall Street Journal had some splashy headline on the front page about some big rift. But apparently, Warren Buffett felt the need to reach out to CNBC and come out today and say that there's no tension between Berkshire Hathaway and 3G. He really downplayed these reports.
I don't know your reaction, but my reaction was, first of all, given what's happened, given the way Kraft Heinz has performed, particularly over the last two years, the writedowns that have happened for Berkshire Hathaway, the fact that Buffett has had to come out and say, "Oh, yeah, we paid too much for this," I think any reasonable person would expect there to be some level of tension. That seems like a little bit of he doth protest too much.
Moser: Your Slack message made me laugh on my way to work. "Really? Shouldn't there be some tension?" Yeah, you're damn right there should be tension! The stock has gotten killed, and for a lot of not necessarily easy-to-fix reasons. Misreporting notwithstanding, restatements notwithstanding --
Hill: Just to add parenthetically, yes, Kraft Heinz, also some accounting problems.
Moser: We've certainly we've seen other companies have that. You're talking about something that's very fixable. You can recover from it. The thing about this deal that always struck me, on the surface, it's right in his wheelhouse. Consumer brands, not tech-related. It's food. It's something you associate with our childhood. A lot of these brands, you and I associate with our childhoods. I think that's part of the problem. I know he said that the biggest problem facing Kraft Heinz is that Heinz overpaid when merging with Kraft in July, and then they made a mistake in overpaying for that investment. I think it goes far deeper than that. I think these are brands that are not resonating with younger generations of consumers today. I don't think that necessarily changes so quickly, particularly when you see the attitudes toward what people are eating, the brands that are coming up from that, the nature of being able to get out there and brand build that didn't exist when we were growing up, via social media and other channels.
It's not to say that this is some trip to zero. I don't think that's the case. There's value in Kraft and Heinz and Philly cream cheese and whatnot. But I don't look at those as brands that are going to be leading the way going forward. For them to just think that overpaying was the problem misses the point entirely.
Hill: I'm not rooting against Berkshire Hathaway. I'm not rooting against Warren Buffett. But to be completely honest, part of me is heartened by the fact that, yeah, Warren Buffett's human. He would probably like a mulligan on this one. From time to time, we talk about sunk costs, and how that's hard to fight against as an investor. Turns out, it's hard for Warren Buffett to fight against. At the time of this deal in 2013, one of the things Buffett said at the time was, "Oh, yeah, I've had my eye on Heinz going back to 1980." For more than 30 years, he had, on some level, been looking at the Heinz business and saying, "Boy, I sure would like to get some of that."
Moser: And ironically, had he made that investment back then, I'm sure things would have worked out a lot better. You hit on something there that I would love to know. Given a mulligan, if you could have this deal for half of what you paid for it, would you do it again? I'd ask Buffett that question. Would you do it again if you could do it for half? Maybe he would, maybe he wouldn't. I think the value investor in him quite possibly would. I would still question that. Again, it goes back to, sometimes things are cheap for a reason.
Hill: U.S. News and World Report has come out with their annual list of the best places to travel to. Paris coming in at No. 1, followed by New Zealand's South Island, then Rome, Tahiti, and London, rounding out the top five. No. 29 on the list, Costa Rica.
Moser: Hey!
Hill: I do want to hear not only what kind of time you had in Costa Rica with your family, but also to the extent that you had business takeaways.
Moser: I always do.
Hill: But I did note that in the write-up, U.S. News and World Report included this caveat when it comes to Costa Rica. I'm quoting here. "Just make sure you plan a visit during the country's dry season between mid-December and April." I read that this morning and thought, "Huh, let me check the calendar."
Moser: First question.
Hill: "I'm pretty sure Jason's trip fell outside that window."
Moser: It definitely did. First and foremost, I thank my lovely wife for lobbing this idea up many months ago. Once she said Costa Rica, I thought, "Hey, I'm all in!" That's a place we'd never been and would love to go visit. We planned it for a while. Thankfully for us, the weather worked out really well. We had a couple of days that were total rainouts. Very fortunate that on those days, we didn't have anything planned. The house that we rented was on top of a mountain on the Pacific Ocean side of the country, so we had a nice view and easy way to spend the day, even when the weather was bad. That's first time we've ever been. I loved it! I feel like if you love nature and wildlife and animals, that's a place you need to go visit. I can't speak to the other side of the country. From what I've understood, the Pacific side is better from a wildlife perspective. Certainly, we got to see a lot of it.
Hill: From a business standpoint, I know from following you on Twitter, you were reading John Carreyrou's book, Bad Blood.
Moser: That was just entertainment. I'd spoken with Greg Gauges, a member of ours, at Fool Fest. He had told me -- I was waiting to just watch the documentary on HBO. He said, "Dude, read the book, then watch the documentary; or watch the documentary, then read the book. Either way, do both." I took him up on that. No regrets. It was a terrific book!
I look at that trip, and man, there's so many things I did, that we did, that touch my portfolio in one way or another. The easy thing is to come back and talk about payments and travel. I'm not going to talk about that. I think I've talked about that before, traveling. But because of Costa Rica, because of the nature and wildlife side of it -- we went to an animal sanctuary one day. They were helping injured animals in the jungle recover, so they get hopefully put them back out. We went horseback riding one day through the jungle and on the beach. It was really cool. Saw tons of wildlife. It was so cool. It got me thinking that one of the companies I talk about a lot on the show, Idexx Laboratories. The other one that doesn't get as much attention is Zoetis, ticker ZTS. They're in the business of the animal health, medicines, and vaccines. Whether it's companion animals like dogs, cats, horses, or livestock animals, Zoetis is essentially the world's biggest company when it comes to this. Spun out of Pfizer a while back. A little bit of a bigger company, perhaps the growth isn't quite like a Rule Breaker. Plays in a very, very large and growing market. Pays a nice little dividend. Well-led. I own shares personally. Zoetis struck me as one that, from the wildlife perspective, I'm certain that some of their stuff was being used down there.
And then, from an entertainment perspective, beyond the book, I do think Spotify is building a strong entertainment platform. Beyond music. I think it's going to become an entertainment platform that people use for so many different things. They've got such a large user base now with a lot of data they can pull from that. They're building their own content. I think they'll be able to do a lot of stuff with it. So, Spotify is another one.
The Fats Domino award, that goes to TripAdvisor. Ain't that a shame? It's such a helpful service, and for whatever reason, they just cannot build a compelling business from it. I said it from the Bahamas, and Costa Rica was no exception, I got so much help from TripAdvisor on the trip there. But for whatever reason, they've not been able to build a compelling business out of it, at least yet. Maybe that'll change.
One to keep an eye on, even when you take a vacation, work never seems to escape you, particularly if you love your work like I do. With the new AR service, I was in touch with some people here back and forth, and Slack was really helpful from that perspective. Ticker WORK. New listing, obviously. Everything from work to, I got to go have dinner down there with Mario Gatica and his wife Sophia. They're Fools and they've been to an Austin event and more recently at Fool Fest. We got to go see them in their home country. That was really cool! Posted a picture of that on Slack. People here at work loved it. A lot of different things that the platform does. I like the integrations with other companies we like out there that are doing neat stuff, helping workplaces communicate better. That was what was going through my mind when I wasn't completely unplugging.
Hill: Nice! Glad you unplugged and I'm glad you made it back!
Moser: Thanks, man!
Hill: As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That'll do it for this edition of MarketFoolery! The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening! We'll see you tomorrow!
Chris Hill has no position in any of the stocks mentioned. Jason Moser owns shares of IDXX, TripAdvisor, and Zoetis. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), IDXX, and TripAdvisor. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE: ABBV) and Allergan (NYSE: AGN) plan to join up, but the market doesn't seem that happy for them. AbbVie buying Allergan. Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months. | AbbVie (NYSE: ABBV) and Allergan (NYSE: AGN) plan to join up, but the market doesn't seem that happy for them. AbbVie buying Allergan. Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months. | Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months. AbbVie (NYSE: ABBV) and Allergan (NYSE: AGN) plan to join up, but the market doesn't seem that happy for them. AbbVie buying Allergan. | Clearly, based on what's happening with shares of AbbVie today, it looks like there are plenty of people who don't like this deal, or at least think that they are paying too much for Allergan, because shares of AbbVie are down about 15%, and it's not like this stock's been lighting the world on fire the last 18 months. AbbVie (NYSE: ABBV) and Allergan (NYSE: AGN) plan to join up, but the market doesn't seem that happy for them. AbbVie buying Allergan. |
24953.0 | 2019-06-26 00:00:00 UTC | Validea John Neff Strategy Daily Upgrade Report - 6/26/2019 | ABBV | https://www.nasdaq.com/articles/validea-john-neff-strategy-daily-upgrade-report-6/26/2019-2019-06-26 | nan | nan | The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.
ABBVIE INC (ABBV) is a large-cap growth stock in the Biotechnology & Drugs industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson's disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab).
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on John Neff has returned 136.08% vs. 163.19% for the S&P 500. For more details on this strategy, click here
About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ABBVIE INC (ABBV) is a large-cap growth stock in the Biotechnology & Drugs industry. Company Description: AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. | ABBVIE INC (ABBV) is a large-cap growth stock in the Biotechnology & Drugs industry. Company Description: AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab). | ABBVIE INC (ABBV) is a large-cap growth stock in the Biotechnology & Drugs industry. Company Description: AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab). | ABBVIE INC (ABBV) is a large-cap growth stock in the Biotechnology & Drugs industry. Company Description: AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. |
24954.0 | 2019-06-26 00:00:00 UTC | Wednesday’s Vital Data: AbbVie, FedEx and Micron | ABBV | https://www.nasdaq.com/articles/wednesdays-vital-data%3A-abbvie-fedex-and-micron-2019-06-26 | nan | nan | U.S. stock futures are trading higher on the back of optimism surrounding a trade deal. Treasury Secretary Steven Mnuchin said the U.S. was nearing a trade deal with China and is confident talks at the G-20 summit will go well.
Against this backdrop, futures on the Dow Jones Industrial Average are up 0.28% and S&P 500 futures are higher by 0.28%. Nasdaq-100 futures have added 0.46%.
In the options pits, call volume held the upper hand yesterday despite the market’s retreat. Overall volume levels held steady near average readings with around 18.1 million calls and 14 million puts changing hands on the session.
Meanwhile, over at the CBOE, the gap between call and put volume narrowed. The single-session equity put/call volume ratio rose to 0.63 — a two-week high. The 10-day moving average continues to hold steady at one-month low territory at 0.62.
Options activity was buzzing in the following three stocks. Abbvie (NYSE:) shares plunged after the company announced it’s acquiring Allergan (NYSE:). FedEx (NYSE:) shares are up slightly after a well-received earnings release. Finally, Micron (NASDAQ:) shares are set to open 9% higher after smashing earnings estimates.
Let’s take a closer look:
AbbVie (ABBV)
Acquisition news sent AbbVie tumbling yesterday. The biopharmaceutical company best known for its production of Humira announced it is buying Allergan for $188.24 or a 45% premium to its price a day prior. The deal carries a $63 billion price tag and sent ABBV stock skidding 16%. AGN shareholders were the clear winner with the stock closing 25% higher.
With the smackdown, ABBV fell close to a two-year low. It has come a long way down from last year’s peak of $125.86, and its price chart continues to look weak. While an oversold bounce is likely in the cards over the coming weeks, you should view it with skepticism. There’s simply way too much overhead resistance to bet on bulls here.
On the options trading front, activity skyrocketed to 1,417% of the average daily volume, with 212,541 total contracts traded. Calls claimed 58% of the tally.
The increased demand drove implied volatility higher on the day to 33% placing it at the 48th percentile of its one-year range. Premiums are now baking in daily moves of $1.36 or 2.1%.
FedEx (FDX)
FedEx earnings were good enough to send the transportation giant slightly higher after hours. FDX stock is set to open up 1.6% after matching revenue estimates of $17.8 billion for the quarter and beating earnings-per-share forecasts. Analysts were looking for earnings of $4.85 a share, and the company delivered $5.01.
FDX shares remain a tough buy here. Headwinds from the ongoing trade war continue to hamper the stock, which is mostly flat for 2019. A longer-term view, however, reveals ample weakness over the past two years. Since peaking last January at $274.66, FDX has fallen 43% with multiple down gaps on disappointing earnings.
There are much healthier stocks to play if you’re shopping for bullish trades.
On the options front, traders were looking for a move of $7.52 or 4.8% after earnings. That makes this morning’s 1.6% rise a real dud and should bring big profits to those holding short volatility positions into earnings. Total activity jumped to 536% of the average daily volume, with 88,784 contracts traded. Puts accounted for 53% of the day’s take.
Micron (MU)
Micron was the other marquee name reporting earnings last night and traders love the number. The wounded semiconductor stock needed a catalyst to pull it out of the death spiral that began last month. For the quarter, Micron earned $1.05 per share on revenue of $4.79 billion. Both measures topped estimates and buyers swarmed after hours. MU stock is set to open up $3 or 9%.
There is a key resistance level near $36, which will be tested this morning. It rejected the last three recovery attempts, so a successful close above it will be needed to confirm buyers have the strength to reverse the trend higher.
On the options trading front, puts outpaced calls by a slim margin (53% vs. 47%). Activity climbed to 243% of the average daily volume, with 311,856 total contracts traded.
The expected move was $2.34 or 7%, which lands this morning’s 9% jump slightly outside of forecasts. Chalk this up as a slight win for volatility buyers.
As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released to learn how to defend your portfolio against market volatility.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Abbvie (NYSE:) shares plunged after the company announced it’s acquiring Allergan (NYSE:). Let’s take a closer look: AbbVie (ABBV) Acquisition news sent AbbVie tumbling yesterday. The deal carries a $63 billion price tag and sent ABBV stock skidding 16%. | Abbvie (NYSE:) shares plunged after the company announced it’s acquiring Allergan (NYSE:). Let’s take a closer look: AbbVie (ABBV) Acquisition news sent AbbVie tumbling yesterday. The deal carries a $63 billion price tag and sent ABBV stock skidding 16%. | Abbvie (NYSE:) shares plunged after the company announced it’s acquiring Allergan (NYSE:). Let’s take a closer look: AbbVie (ABBV) Acquisition news sent AbbVie tumbling yesterday. The deal carries a $63 billion price tag and sent ABBV stock skidding 16%. | Abbvie (NYSE:) shares plunged after the company announced it’s acquiring Allergan (NYSE:). Let’s take a closer look: AbbVie (ABBV) Acquisition news sent AbbVie tumbling yesterday. The deal carries a $63 billion price tag and sent ABBV stock skidding 16%. |
24955.0 | 2019-06-26 00:00:00 UTC | Health Care Sector Update for 06/26/2019: ACST, ABBV, EYEG, NBRV, AGN, JNJ, PFE, ABT, MRK, AMGN | ABBV | https://www.nasdaq.com/articles/health-care-sector-update-for-06-26-2019%3A-acst-abbv-eyeg-nbrv-agn-jnj-pfe-abt-mrk-amgn | nan | nan | Top Health Care Stocks:
JNJ: Flat
PFE: -0.07%
ABT: +0.07
MRK: +0.13%
AMGN: +0.08%
Most health care majors were higher in Wednesday's pre-market trading.
Early movers include:
(+) Acasti Pharma (ACST), which was up more than 11% after it said it remained "on track to report topline results for our primary endpoint of lowering triglycerides" in ongoing phase 3 trials of its drug CaPre.
(-) Nabriva Therapeutics (NBRV), which was down 2% after it said Tuesday that it entered into an open market sale agreement with Jefferies LLC, as sales agent, under which Nabriva may offer and sell ordinary shares for proceeds of up to $50 million.
(+) AbbVie (ABBV) was up 2% after saying that in connection with its proposed $63 billion merger with Allergan (AGN), it signed a $38 billion bridge loan agreement with Morgan Stanley Senior Funding and MUFG Bank.
(+) EyeGate Pharmaceuticals (EYEG), which was up 14% after it said early Wednesday it enrolled the first patient in its corneal wound repair study in patients having undergone photorefractive keratectomy (PRK) surgery.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (+) AbbVie (ABBV) was up 2% after saying that in connection with its proposed $63 billion merger with Allergan (AGN), it signed a $38 billion bridge loan agreement with Morgan Stanley Senior Funding and MUFG Bank. Early movers include: (+) Acasti Pharma (ACST), which was up more than 11% after it said it remained "on track to report topline results for our primary endpoint of lowering triglycerides" in ongoing phase 3 trials of its drug CaPre. (-) Nabriva Therapeutics (NBRV), which was down 2% after it said Tuesday that it entered into an open market sale agreement with Jefferies LLC, as sales agent, under which Nabriva may offer and sell ordinary shares for proceeds of up to $50 million. | (+) AbbVie (ABBV) was up 2% after saying that in connection with its proposed $63 billion merger with Allergan (AGN), it signed a $38 billion bridge loan agreement with Morgan Stanley Senior Funding and MUFG Bank. Top Health Care Stocks: JNJ: Flat Most health care majors were higher in Wednesday's pre-market trading. | (+) AbbVie (ABBV) was up 2% after saying that in connection with its proposed $63 billion merger with Allergan (AGN), it signed a $38 billion bridge loan agreement with Morgan Stanley Senior Funding and MUFG Bank. (-) Nabriva Therapeutics (NBRV), which was down 2% after it said Tuesday that it entered into an open market sale agreement with Jefferies LLC, as sales agent, under which Nabriva may offer and sell ordinary shares for proceeds of up to $50 million. (+) EyeGate Pharmaceuticals (EYEG), which was up 14% after it said early Wednesday it enrolled the first patient in its corneal wound repair study in patients having undergone photorefractive keratectomy (PRK) surgery. | (+) AbbVie (ABBV) was up 2% after saying that in connection with its proposed $63 billion merger with Allergan (AGN), it signed a $38 billion bridge loan agreement with Morgan Stanley Senior Funding and MUFG Bank. Top Health Care Stocks: JNJ: Flat Most health care majors were higher in Wednesday's pre-market trading. |
24956.0 | 2019-06-26 00:00:00 UTC | 3 Big Stock Charts for Wednesday: Tyson Foods, Lennar and State Street | ABBV | https://www.nasdaq.com/articles/3-big-stock-charts-for-wednesday%3A-tyson-foods-lennar-and-state-street-2019-06-26 | nan | nan | Already struggling under the weight of recent gains, investors interpreted some comments from Federal Reserve Chairman Jerome Powell in the worst possible light on Tuesday. The S&P 500 fell 0.95%, perhaps setting a tone for a return to the mean more in tune with June’s usual tepidness.
Source:
FedEx (NYSE:) did a bunch of the organic damage, falling more than 3% in front of its post-close fourth-quarter report that was partially undone in after-hours action. AbbVie (NYSE:) logged the day’s most sizeable loss by a single name, however, losing 16% on the heels of unpopular news that it was acquiring Allergan (NYSE:) at a healthy premium.
At the other end of the spectrum, aside from Allergan’s jump, Caesars Entertainment (NASDAQ:) gained another 1% after investors continued to celebrate its acquisition.
Headed into the midpoint of the trading week, however, it’s the stock charts of Lennar (NYSE:), Tyson Foods (NYSE:) and State Street (NYSE:) that merit the closest looks. Here’s why, and what to look for.
Lennar (LEN)
The one thing worse than a major daily setback for a particular stock is a day that starts out as a gain, and then slips into the red. It suggests a well-reasoned rethinking of the market’s opinion of a company, rather than a knee-jerk response that is just as easily reversed.
That’s what happened to Lennar on Tuesday. Shares of the homebuilder stock opened firmly on a seemingly good enough second-quarter report, but as investors mulled the numbers, they decided they were more of a liability than a success story. The sheer scope of the reversal sets the stage for lower lows in the near future.
Yesterday’s volume surge is also a red flag. Major pivots are often marked by a spike in volume. In this case, the pivot is out of an uptrend and into a downtrend.
Even so, the bulls are likely to push back a little from here. It’s the next ebb lower that will proverbially seal the downtrend in place. That’s mostly a move below the 200-day average line, in white on both stock charts.
Tyson Foods (TSN)
Tyson Foods shares have been overextended for weeks now, revisiting their multi-year high hit in late 2017. So far the bears haven’t been able to pull the rug out from underneath the stock, but the bulls have been unable to continue on.
As of Tuesday though, Tyson stock became more vulnerable to a pullback than it has been in months. The shape and placement of Tuesday’s bar is everything, particularly when it’s backed by another major red flag.
The surge in volume, as was the case with Lennar, also suggests a pivot or a transition. In this case, it’s from a net-buying environment to a net-selling one.
State Street (STT)
Finally, State Street shares may be up just a bit from last week’s lows, though are hardly in an impressive uptrend. A major move may be quietly taking shape though. Many of the telltale signs are already in place. Better still, there’s a clear line in the sand that will have to be hurdled before any of the potential rally matters.
Despite the tepid forward progress of late, the buyers are stepping up to the plate in earnest. All the key advances since the end of May have been on above-average volume.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website , or follow him on Twitter, at @jbrumley.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE:) logged the day’s most sizeable loss by a single name, however, losing 16% on the heels of unpopular news that it was acquiring Allergan (NYSE:) at a healthy premium. Already struggling under the weight of recent gains, investors interpreted some comments from Federal Reserve Chairman Jerome Powell in the worst possible light on Tuesday. Source: FedEx (NYSE:) did a bunch of the organic damage, falling more than 3% in front of its post-close fourth-quarter report that was partially undone in after-hours action. | AbbVie (NYSE:) logged the day’s most sizeable loss by a single name, however, losing 16% on the heels of unpopular news that it was acquiring Allergan (NYSE:) at a healthy premium. Headed into the midpoint of the trading week, however, it’s the stock charts of Lennar (NYSE:), Tyson Foods (NYSE:) and State Street (NYSE:) that merit the closest looks. Tyson Foods (TSN) Tyson Foods shares have been overextended for weeks now, revisiting their multi-year high hit in late 2017. | AbbVie (NYSE:) logged the day’s most sizeable loss by a single name, however, losing 16% on the heels of unpopular news that it was acquiring Allergan (NYSE:) at a healthy premium. Headed into the midpoint of the trading week, however, it’s the stock charts of Lennar (NYSE:), Tyson Foods (NYSE:) and State Street (NYSE:) that merit the closest looks. Lennar (LEN) The one thing worse than a major daily setback for a particular stock is a day that starts out as a gain, and then slips into the red. | AbbVie (NYSE:) logged the day’s most sizeable loss by a single name, however, losing 16% on the heels of unpopular news that it was acquiring Allergan (NYSE:) at a healthy premium. Headed into the midpoint of the trading week, however, it’s the stock charts of Lennar (NYSE:), Tyson Foods (NYSE:) and State Street (NYSE:) that merit the closest looks. The shape and placement of Tuesday’s bar is everything, particularly when it’s backed by another major red flag. |
24957.0 | 2019-06-25 00:00:00 UTC | What Happened in the Stock Market Today | ABBV | https://www.nasdaq.com/articles/what-happened-in-the-stock-market-today-2019-06-25 | nan | nan | Major indexes slumped Tuesday after comments from Federal Reserve officials indicated that an interest rate cut may not happen soon. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) opened roughly flat but fell through the session, finishing with moderate losses.
Today's stock market
Data source: Yahoo! Finance.
As for individual stocks, AbbVie (NYSE: ABBV) announced plans to buy Allergan (NYSE: AGN), and Lennar (NYSE: LEN) reported quarterly results.
Image source: Getty Images.
AbbVie wants to acquire Allergan in the latest pharma megadeal
AbbVie announced it plans to buy Botox maker Allergan in a deal worth $63 billion, but AbbVie investors panned the move, sending its shares down 16.3%. Allergan stock soared 25.4% to $162.43. Under the terms of the agreement, AbbVie will pay $120.30 in cash and 0.866 AbbVie shares for each share of Allergan, representing a whopping 45% premium based on yesterday's closing prices.
Motivating AbbVie to make such an expensive acquisition is the fact that Humira -- the world's top-selling drug, accounting for about 60% of the company's revenue -- will have biosimilar competition in the U.S. beginning in 2023. After the merger, Humira's $19 billion in sales would make up less than 40% of the total. AbbVie believes that it can find $2 billion in annual cost savings and that the combined company, excluding Humira, can generate high-single-digit sales growth.
Allergan has had its own growth challenges lately, with revenue falling 2% last quarter. The transaction is subject to regulatory approval and a vote by Allergan shareholders, who have plenty of reason to be happy with the deal.
Lennar reports a strong quarter, but guidance stirs worries
Homebuilder Lennar reported fiscal second-quarter results that beat expectations, but followed them with weak guidance, and shares fell 6.2%. Revenue grew 1.9% to $5.2 billion and earnings per share increased 38% to $1.30. Analysts were expecting the company to earn $1.14 per share on revenue of $5.1 billion.
Deliveries of homes rose 5% to 12,729 and new orders were up 1% to 14,518 homes. Lennar said more moderate price increases and lower interest rates were leading buyers back into the market after a pause in the second half of 2018.
Lennar shares opened higher but started to fall during the conference call when company officials said that labor and land shortages are adding to costs and that tariffs are adding $500 to the cost of a new home. Furthermore, the company forecast Q3 EPS between $1.25 and $1.35, compared with the analyst consensus of $1.52.
Lennar continues to be optimistic about the housing market, but investor nervousness about a slowdown and a report from the Commerce Department showing weak new home sales in May contributed to the decline in share price.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Motivating AbbVie to make such an expensive acquisition is the fact that Humira -- the world's top-selling drug, accounting for about 60% of the company's revenue -- will have biosimilar competition in the U.S. beginning in 2023. AbbVie believes that it can find $2 billion in annual cost savings and that the combined company, excluding Humira, can generate high-single-digit sales growth. As for individual stocks, AbbVie (NYSE: ABBV) announced plans to buy Allergan (NYSE: AGN), and Lennar (NYSE: LEN) reported quarterly results. | As for individual stocks, AbbVie (NYSE: ABBV) announced plans to buy Allergan (NYSE: AGN), and Lennar (NYSE: LEN) reported quarterly results. AbbVie wants to acquire Allergan in the latest pharma megadeal AbbVie announced it plans to buy Botox maker Allergan in a deal worth $63 billion, but AbbVie investors panned the move, sending its shares down 16.3%. Under the terms of the agreement, AbbVie will pay $120.30 in cash and 0.866 AbbVie shares for each share of Allergan, representing a whopping 45% premium based on yesterday's closing prices. | As for individual stocks, AbbVie (NYSE: ABBV) announced plans to buy Allergan (NYSE: AGN), and Lennar (NYSE: LEN) reported quarterly results. AbbVie wants to acquire Allergan in the latest pharma megadeal AbbVie announced it plans to buy Botox maker Allergan in a deal worth $63 billion, but AbbVie investors panned the move, sending its shares down 16.3%. Under the terms of the agreement, AbbVie will pay $120.30 in cash and 0.866 AbbVie shares for each share of Allergan, representing a whopping 45% premium based on yesterday's closing prices. | AbbVie wants to acquire Allergan in the latest pharma megadeal AbbVie announced it plans to buy Botox maker Allergan in a deal worth $63 billion, but AbbVie investors panned the move, sending its shares down 16.3%. As for individual stocks, AbbVie (NYSE: ABBV) announced plans to buy Allergan (NYSE: AGN), and Lennar (NYSE: LEN) reported quarterly results. Under the terms of the agreement, AbbVie will pay $120.30 in cash and 0.866 AbbVie shares for each share of Allergan, representing a whopping 45% premium based on yesterday's closing prices. |
24958.0 | 2019-06-25 00:00:00 UTC | Nasdaq Today: Hard to Keep Track of the Losers | ABBV | https://www.nasdaq.com/articles/nasdaq-today%3A-hard-to-keep-track-of-the-losers-2019-06-25 | nan | nan | Monday might have been a sleepy session, but on Tuesday, we fell out of bed. We had a mega biotech deal to shake things up, while stocks continue to fluctuate ahead of the G20 meeting. So what led to the roughly 1.5% drop in the Nasdaq today?
Source: Shutterstock
Sorting Out the Macro
We said it the other day, but it bears repeating: Investors are not navigating a normal period of time. The market is pricing in a rate cut while the economy seems mostly fine and stock markets hover near all-time highs.
That said, recent housing data was disappointing, consumer confidence slipped to a multi-year low and while it seems forgotten, the jobs report earlier this month was a major miss.
Fed Chairman Jerome Powell held a press conference on Tuesday, one that investors were tuned into to see whether they could get any hints about a rate cut, but Powell held firm. Instead, he pushed back against “criticisms” from the White House, saying that the Fed is insulated from short-term political pressures .
This also comes just a few days ahead of the G20 summit, where investors are hopeful that the U.S. and China can take some meaningful steps toward a trade deal. Trump and President Xi will meet on Saturday — setting up a potentially large move for next week.
That could have a huge impact on the Nasdaq, particularly for semiconductor stocks. It will also affect those that generate revenue from China and Asia or have production setup in the region.
Winners in the Nasdaq Today
The biggest winner in the Nasdaq today? Biotech. Last week we in this group and Monday’s $63 billion merger only adds to recent gains. AbbVie (NYSE:) is scooping up Allergan (NYSE:) in a $63 billion cash-and-stock deal. AGN rallied 26%, while ABBV fell 15%.
The move is driving names like Biogen (NASDAQ:), Mylan (NASDAQ:) and others higher on the day on above-average volume.
Other than that though, there weren’t a lot of winners in the Nasdaq today. I guess you can count the names that held up to the selling. Stocks like Starbucks (NASDAQ:), KLA-Tencor (NASDAQ:) and Walgreens (NASDAQ:), all of which closed higher on the day.
Losers in the Nasdaq Today
The column could cover today’s losers and be a two-part series. It was a tough day in tech, particularly for those in momentum names. Sellers continue to pile onto what were red-hot momentum stocks that are suddenly cooling off.
Names like Shopify (NASDAQ:), which fell over 8%, as well as Roku (NASDAQ:), Trade Desk (NASDAQ:), Twilio (NYSE:) and others all took it on the chin Tuesday.
Chinese tech stocks were also hit hard. iQiyi (NASDAQ:), Baozun (NASDAQ:), Baidu (NASDAQ:) and Huya (NYSE:) were all hit hard as sellers punished Chinese equities.
Microsoft (NASDAQ:) finally pulled in a bit, with shares falling over 3% on the day. The stock had been hitting new high after new high, but profit-taking finally got the best of it. MSFT shares are now resetting and here’s where it may find support.
Other large-cap tech names were down alongside Microsoft. The whole FANG group — Facebook (NASDAQ:), Amazon (NASDAQ:), Netflix (NASDAQ:) and Alphabet (NASDAQ:, NASDAQ:GOOG) — all declined roughly 2% to 3% on the day.
Adobe Systems (NASDAQ:) was clocked by more than 4% too. After ripping higher last week on solid earnings, shares were under pressure Tuesday, likely for the same reason that MSFT stock fell so much: profit-taking. See if this key level can act as support.
Bottom Line on the Nasdaq Today
There’s no other way to put it: the Nasdaq got punched in the face on Tuesday. Honestly though, seeing the index come down a bit after launching higher over the past few weeks is constructive. I was leery about going into the G20 summit with the market on its highs. With this action though, investors are going into the event lower. That helps lower expectations and keep investors from being too disappointed if there’s no trade progress. A trade-war escalation will not be good, though.
This price action is somewhat painful in the short term. However, it’s better for keeping the bull market intact over the long term.
On the earnings front, remember we have quarterly reports from Micron (NASDAQ:) after the bell and BlackBerry (NYSE:) on Wednesday morning.
Bret Kenwell is the manager and author of and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU, SBUX, AMZN and GOOGL.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE:) is scooping up Allergan (NYSE:) in a $63 billion cash-and-stock deal. AGN rallied 26%, while ABBV fell 15%. Source: Shutterstock Sorting Out the Macro We said it the other day, but it bears repeating: Investors are not navigating a normal period of time. | AbbVie (NYSE:) is scooping up Allergan (NYSE:) in a $63 billion cash-and-stock deal. AGN rallied 26%, while ABBV fell 15%. Names like Shopify (NASDAQ:), which fell over 8%, as well as Roku (NASDAQ:), Trade Desk (NASDAQ:), Twilio (NYSE:) and others all took it on the chin Tuesday. | AbbVie (NYSE:) is scooping up Allergan (NYSE:) in a $63 billion cash-and-stock deal. AGN rallied 26%, while ABBV fell 15%. Stocks like Starbucks (NASDAQ:), KLA-Tencor (NASDAQ:) and Walgreens (NASDAQ:), all of which closed higher on the day. | AbbVie (NYSE:) is scooping up Allergan (NYSE:) in a $63 billion cash-and-stock deal. AGN rallied 26%, while ABBV fell 15%. This also comes just a few days ahead of the G20 summit, where investors are hopeful that the U.S. and China can take some meaningful steps toward a trade deal. |
24959.0 | 2019-06-25 00:00:00 UTC | 5 Top Stock Trades for Wednesday — AGN, ABBV, FDX, MSFT, BB | ABBV | https://www.nasdaq.com/articles/5-top-stock-trades-for-wednesday-agn-abbv-fdx-msft-bb-2019-06-25 | nan | nan | It was a slippery slope in the markets on Tuesday, with equities breaking lower. By lunch the PowerShares QQQ ETF (NASDAQ:) was down by 1.5%, while the S&P 500 and Dow Jones carried losses of roughly 75 basis points. In light of that action though, we surely found some top stock trades to watch.
Top Stock Trades for Tomorrow #1: Allergan
Just yesterday Celgene (NASDAQ:) and Bristol-Myers Squibb (NYSE:) as they tangle with a mega merger. Now it’s Allergan’s (NYSE:) turn, which is being acquired by AbbVie (NYSE:).
Allergan is up 26.5% after agreeing to sell for $188.24 per share. comes in a cash and stock format, with AGN shareholders receiving $120.30 per share in cash and .866 shares of ABBV for each share of AGN they own.
So if the deal price came out to ~$188 per share, why is AGN only at $164 and retreating? Well, since the cash portion is only for ~$120 per share, the rest of the deal price depends on ABBV stock price.
With ABBV getting walloped on the day — more on that one in a second — it drags down the price of the deal. ABBV is currently down 15%, so that’s putting a bit of a damper on the deal.
We saw similar action after the CELG/BMY announcement, although until Monday they were both trading pretty well.
Some AGN investors may be frustrated with the deal price, given that less than a year ago AGN was above that mark. However, it’s a lot better than the floundering stock could muster on its own in 2019. Watch ABBV. If it recovers, so too should AGN.
Top Stock Trades for Tomorrow #2: AbbVie
ABBV dropped over 15% and isn’t showing many signs of life. To say the chart looks ugly would be a compliment at this point.
AbbVie shares have been locked in a brutal downtrend over the past 18 months. Shares are down more than 40% after hitting a high north of $118 in January 2018. Stuck below its 10-week and 50-week moving averages, shares are losing the 200-week moving average now. It’s also below downtrend support (blue line).
Maybe $65 can buoy the name or perhaps buyers will decide to gobble up the stock after digesting the AGN deal in a bit more detail. But if buyers don’t step up, the next notable level of support may not come until $60 to $61.
A further decline will hurt ABBV shareholders, obviously, but it will hurt AGN owners too. On a rebound, watch the $70 to $72 area. ABBV needs to reclaim this zone to garner upside momentum.
Top Stock Trades for Tomorrow #3: Microsoft
Microsoft (NASDAQ:) has been a beast. On Tuesday though, shares tumbled 3% at their lows as bulls take a breather.
The only question now is, how much of a break does MSFT need?
Share have been in a sharply rising channel for most of 2019, with the exception of a few trading sessions. Aggressive bulls may wait for a buying opportunity in the $127 to $130 range, while more conservative bullish traders may try waiting for a dip down to the $120 area.
That $120 fill may be hard to get without a larger correction. Even in late May when the markets were swooning, the stock only gave those looking for a $120 entry one day. And that was coming off a $131 high, not the $138.40 high it logged earlier this week.
Top Stock Trades for Tomorrow #4: FedEx
FedEx (NYSE:) will report earnings on Tuesday after the close and boy does the chart look unattractive.
The 10-week is currently squeezing this one lower, but its other trends aren’t doing FDX any favors. The stock has been putting in lower highs for 18 months, a trend that has accelerated over the last nine months.
FDX sports a double-bottom down near $150, which is the must-hold level after it reports. If it losses this mark, see that it reclaims it. It would preferably happen on the same day amid a big reversal, but by week’s end works too. Below $150 and FDX is in trouble.
On the upside, see if FedEx can reclaim its 10-week moving average and close above downtrend resistance (near $175). I don’t trade stocks ahead of earnings, but it’s possible FDX could pose post-earnings opportunities.
Top Stock Trades for Tomorrow #5: BlackBerry
This one is also looking ugly. BlackBerry (NYSE:) will report earnings before the open on Wednesday, and like FDX, the trend hasn’t been kind.
Over the last few weeks, the 50-week and 200-week moving averages have worked together to stymie BlackBerry’s rally attempts. Now back below the 10-week and the stock’s recent lows near $7.70 are on the table.
On a rally, a close over $9.01 sets up a test of downtrend resistance. Over $9.60 could spring BlackBerry free.
Bret Kenwell is the manager and author of and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long CELG.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Top Stock Trades for Tomorrow #2: AbbVie ABBV dropped over 15% and isn’t showing many signs of life. Now it’s Allergan’s (NYSE:) turn, which is being acquired by AbbVie (NYSE:). comes in a cash and stock format, with AGN shareholders receiving $120.30 per share in cash and .866 shares of ABBV for each share of AGN they own. | Top Stock Trades for Tomorrow #2: AbbVie ABBV dropped over 15% and isn’t showing many signs of life. Now it’s Allergan’s (NYSE:) turn, which is being acquired by AbbVie (NYSE:). comes in a cash and stock format, with AGN shareholders receiving $120.30 per share in cash and .866 shares of ABBV for each share of AGN they own. | comes in a cash and stock format, with AGN shareholders receiving $120.30 per share in cash and .866 shares of ABBV for each share of AGN they own. Well, since the cash portion is only for ~$120 per share, the rest of the deal price depends on ABBV stock price. Now it’s Allergan’s (NYSE:) turn, which is being acquired by AbbVie (NYSE:). | comes in a cash and stock format, with AGN shareholders receiving $120.30 per share in cash and .866 shares of ABBV for each share of AGN they own. Now it’s Allergan’s (NYSE:) turn, which is being acquired by AbbVie (NYSE:). Well, since the cash portion is only for ~$120 per share, the rest of the deal price depends on ABBV stock price. |
24960.0 | 2019-06-25 00:00:00 UTC | Health Care Sector Update for 06/25/2019: XNCR,BPMX,AGN,ABBV,CNAT,NVS,HF | ABBV | https://www.nasdaq.com/articles/health-care-sector-update-for-06-25-2019%3A-xncrbpmxagnabbvcnatnvshf-2019-06-25 | nan | nan | Top Health Care Stocks
JNJ +0.97%
PFE +0.29%
ABT -0.28%
MRK -0.11%
AMGN +0.12%
Health care stocks still were edging lower in late trade, including a slightly more than 0.2% decline for the NYSE Health Care Index while shares of health care companies in the S&P 500 also were down almost 0.3% as a group. The Nasdaq Biotechnology index was climbing nearly 0.1%.
Among health care stocks moving on news:
(+) Xencor (XNCR) was more than 14% higher in late Tuesday trade after the biotechnology company was selected to replace real estate services firm HFF Inc (HF) in the S&P Smallcap 600 index, effective with the start of trading next Tuesday, July 2, S&P Dow Jones Indices said.
In other sector news:
(+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. The deal values Allergan at $188.24 per share, representing a 45% premium to Allergan's closing price on Monday.
(-) BioPharmX (BPMX) was down 8.5% in late trade after earlier jumping as much as 32.6% higher after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. The topical gel met its primary endpoint of a statistically significant drop in the number of inflammatory facial lesions after 12 weeks compared with a vehicle control.
(-) Conatus Pharmaceuticals (CNAT) dropped almost 70% to a record low of 28 cents a share after announcing an aggressive restructuring plan, including laying off 40% of its existing staff and suspending development on its CTS-2090 drug candidate to treat inflammasome disease, after its emricasan prospective treatment for liver disease failed to meet its primary target during phase III testing.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. (-) BioPharmX (BPMX) was down 8.5% in late trade after earlier jumping as much as 32.6% higher after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. The topical gel met its primary endpoint of a statistically significant drop in the number of inflammatory facial lesions after 12 weeks compared with a vehicle control. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Health care stocks still were edging lower in late trade, including a slightly more than 0.2% decline for the NYSE Health Care Index while shares of health care companies in the S&P 500 also were down almost 0.3% as a group. The Nasdaq Biotechnology index was climbing nearly 0.1%. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Health care stocks still were edging lower in late trade, including a slightly more than 0.2% decline for the NYSE Health Care Index while shares of health care companies in the S&P 500 also were down almost 0.3% as a group. Among health care stocks moving on news: (+) Xencor (XNCR) was more than 14% higher in late Tuesday trade after the biotechnology company was selected to replace real estate services firm HFF Inc (HF) in the S&P Smallcap 600 index, effective with the start of trading next Tuesday, July 2, S&P Dow Jones Indices said. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. The Nasdaq Biotechnology index was climbing nearly 0.1%. Among health care stocks moving on news: (+) Xencor (XNCR) was more than 14% higher in late Tuesday trade after the biotechnology company was selected to replace real estate services firm HFF Inc (HF) in the S&P Smallcap 600 index, effective with the start of trading next Tuesday, July 2, S&P Dow Jones Indices said. |
24961.0 | 2019-06-25 00:00:00 UTC | 3 Biopharma Stocks to Buy for Income | ABBV | https://www.nasdaq.com/articles/3-biopharma-stocks-to-buy-for-income-2019-06-25 | nan | nan | Many investors are increasingly looking to generate safe income from dividend stocks. In general, big blue-chip stocks tend to be consistently generous dividend payers. And biopharma companies — when they’re established enough to offer payouts — have traditionally been seen as relatively safe dividend investments. Therefore, today I’d like to discuss the outlook for three such stocks, namely GlaxoSmithKline (NYSE:), AbbVie (NYSE:), and Johnson & Johnson (NYSE:).
Despite competitive pressures from other big pharma and biotech companies, GSK, ABBV, and JNJ stocks have strong balance sheets, proactive management and several important drugs in the pipeline that are likely to keep them ahead of the competition. Furthermore, all three companies offer healthy dividend yields that will provide strong support for their respective stock prices in the months ahead.
No investor has a crystal ball that can predict the markets’ next move with certainty, but with increased levels of volatility in broader markets, now could be an appropriate time to become a little defensive. Therefore, mega-cap healthcare stocks may be suit diversified portfolios.
However, investment risk and return go together, and any of these three biopharma stocks may suffer a setback later in 2019. In addition to potential company-specific issues, one industry concern is that the U.S. government may increase its drug pricing regulations.
Both President Trump and other politicians on both sides of the aisle have openly for the ever growing prescription prices and the effect on Medicare budget. Therefore, if the U.S. political discourse turns against the sector more, these stocks may experience further volatility.
With all of that said, let’s take a closer look at these high-yield, discounted stocks to buy.
GlaxoSmithKline (GSK)
Source: Shutterstock
When short-term volatility increases in the broader markets, I look for companies that offer fundamental value and growth potential, as well as proven stability. Overall, GSK stock fits the criteria well.
Despite management’s efforts to boost the company’s , since 2014, GlaxoSmithKline shares have not done much for investors. Year-to-date, GSK stock is up 5.5%.
The lackluster performance of GSK shares was mostly because its pharmaceutical business lagged other big pharma rivals in offering blockbuster drugs. However, management has been focusing on developing strong assets for GSK’s pipeline. For example, the “immune system” space, which gives the company pricing power, is now getting a higher share of GlaxoSmithKline’s research and development (R&D) budget. The company is also a global leader in respiratory diseases.
Furthermore, I am excited about the late-2018 between GSK and Pfizer (NYSE:), which will create a leader in over-the-counter (OTC) products. The two companies will spinoff their consumer healthcare brands in a new venture of which GSK will own 68% and contribute with its top brands, including Theraflu, Sensodyne and Voltaren. I expect this new company to be a winner for the investors.
Over the past two years, the political discourse in the U.K. on Brexit has increased the volatility of British companies and their stock prices. Although a potential no-deal Brexit could affect GSK with a broader UK-wide market decline, I believe most of the bad news regarding Brexit is already baked into GSK share price.
Going forward, Brexit is not likely to have a major negative impact on GlaxoSmithKline’s business model or its stock price.
GSK’s latest earnings release on showed a strong balance sheet as the group reported better-than-expected Q1 2019 revenue. Earnings per share of 79 cents was 13 cents above consensus. Management also gave positive outlook for the rest of the year.
GSK’s main segments are:
GlaxoSmithKline’s global dominance in two of these segments ensures a higher degree of predictability in cash flow.
Analysts also welcomed the fact that sales of Shingrix, GSK’s fast-growing shingles vaccine, was up 61.5% from the previous quarter. Nucala, a respiratory drug, also showed 41% year-over-year (YoY) sales growth. Furthermore, GlaxoSmithKline has enjoyed solid growth in its influenza and meningitis vaccines. Analysts have strong performance expectation of the HIV newcomer Juluca.
Due to its rock-solid dividend, which stands at over 5.1%, and its robust growth potential, GSK stock belongs in any balanced portfolio of healthcare stocks. During theearnings call CFO Iain MacKay reaffirmed the pharma giant’s projected dividend for 2019.
GSK stock may continue to trade sideways during the rest of 2019. However, patient GSK bulls will probably be proven right to believe in the management’s commitment to create shareholder value and to further grow the company. In the meantime, they can continue to collect high dividends.
AbbVie (ABBV)
Source: Shutterstock
AbbVie is a $115-billion-market-cap biopharma stock, but shares have been in a downtrend for almost a year, especially following the earnings report on April 25.
In 2013, Abbott Laboratories (NYSE:) spun off its research-based pharmaceuticals business, creating AbbVie, an independent biopharmaceutical company. Abbott decided to retain the branded generic pharmaceuticals, diagnostics, medical devices and nutrition.
Meanwhile, AbbVie took control of the development and commercialization of , including Humira, its flagship drug used to treat autoimmune diseases, Imbruvica, which differentiates between cancer cells and regular cells, and Synthroid, a replacement for a hormone normally produced by the thyroid gland. The company’s financials and growth metrics over the past five years have been impressive. During its short life since the spin off, AbbVie stock has delivered consistently growing revenues and free cash flows.
In other words, ABBV stock was in a strong financial position heading into 2019, with hopes of a higher share price during the first quarter. However, year-to-date, the share price is down 15%. This decline has been mostly due to the falling sales of Humira, the world’s bestselling drug that treats rheumatoid arthritis and Crohn’s disease.
International sales of Humira are falling as a result of , which makes up three-quarters of the overseas Humira business. In October 2018, its patent in the European Union expired.
The refers to biosimilars as a drug that is “highly similar to an FDA-approved biological product … [that has] no clinically meaningful differences in terms of safety and effectiveness.”
Although Wall Street had already known about this sales decline in Europe, investors decided to not be exposed to the potential risk from the U.S. sales of Humira. In the U.S., AbbVie has patent protection for Humira .
Many analysts on Wall Street are with the concentration risk that comes from getting such a high level of earnings from a single drug. But other analysts are optimistic that management will continue to grow earnings in double digits through different successful drugs in the pipeline, including Venclexta, Risankizumab and Orilissa.
It is important to emphasize that AbbVie’s revenue from the drug will not decline to nothing when the biosimilars hit the market in 2023. What will most likely happen is that as the company’s pricing power decreases, the revenue will also gradually decline.
Overall ABBV’s recent earnings release showed robust top-line growth, a strong pipeline of existing and new drugs. At present, AbbVie’s other major products include:
Creon, a pancreatic enzyme therapy to treat exocrine pancreatic insufficiency.
Viekira Pak, which treats chronic hepatitis C.
Management has been increasing its R&D budget each year. Analysts are also expecting in 2020, such as next-generation immunology drugs. These drugs and others that are being developed and commercialized, highlight how impressive the potential growth story could materialize in the next few years.
In some news that just broke today, ABBV has finalized a deal to buy Allergan (NYSE:) for $63 billion. AGN stockholders are elated — the stock is up a mindblowing 25%, but ABBV investors aren’t taking to the deal well. ABBV has plummeted 16% on the day.
Currently, the main calling card for AbbVie stock is , which stands at about 5.4%. Since its spinoff from Abbott Laboratories, ABBV has increased dividends every year — a trend that is likely to continue. Its next dividend payment is on Aug. 15. In other words, the short-term headwinds regarding the sales of Humira and the AGN merger are also creating long-term buying opportunities now. I’d personally view today’s movement as a discount.
Johnson & Johnson (JNJ)
Source: Shutterstock
With a market cap of $377 billion, Johnson & Johnson, the healthcare giant, is currently . The group builds its moat by investing heavily in its diverse pharmaceutical pipeline. JNJ operates in three segments that provide it with diversified sources of revenue, earnings and cash flow:
Consumer
JNJ’s provides treatments for immunology, cardiovascular and metabolic diseases, pulmonary hypertension, infectious diseases and cancer. The consumer section involves products in baby care, oral care, over-the-counter drugs, personal hygiene and women’s health. Several well-known brands within its consumer division include Aveeno, Band-Aid, Johnson’s Baby, Neutrogena, Rogaine, Tylenol and Zyrtec. JNJ’s medical devices segment develops and markets products and solutions for surgery, orthopedics and vision.
The pharamceutical and medical devices and diagnostics groups bring in about 80% of sales, contributing the majority of cash flows for the firm.
JNJ’s diversification enables the company to withstand economic cycles more effectively. No matter what the economy does, consumers will buy the products of many of these strong brands, and JNJ will have industry-leading market share in many areas. Geographically, the U.S. provides almost half of the revenue.
On April 16, the company reported better-than-expected , as its sales increased to $20.02 billion. JNJ’s earnings per share rose 1.9% to $2.10. Its pharmaceutical business grew 7.9%. Similarly, its medical devices unit grew 4.3% and its consumer sales increased 0.7%. Finally, Johnson & Johnson raised its full-year guidance.
Year-to-date, JNJ stock is up 10%, and I remain bullish on the long-term outlook of Johnson & Johnson shares.
However, in the short-term, investors may take some profits in JNJ stock. As a result of the recent run-up in price, short-term technical indicators have become somewhat overextended. Investors who pay attention to short-term should note that Johnson & Johnson stock has also become “overbought.”
Therefore, JNJ stock might drop towards the $135 level, where the stock is likely to find major support in the coming weeks.
Finally, investors who buy Johnson & Johnson stock now will enjoy a dividend yield of . The conglomerate has raised its dividend each year for over half a century. With its diverse range of products, I think JNJ is likely to continue to be a high-dividend staple stock. And dividends tend to create a “price floor” for stocks during market downturns.
As of this writing, Tezcan Gecgil holds covered calls on GSK (June 28 expiry).
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Therefore, today I’d like to discuss the outlook for three such stocks, namely GlaxoSmithKline (NYSE:), AbbVie (NYSE:), and Johnson & Johnson (NYSE:). Despite competitive pressures from other big pharma and biotech companies, GSK, ABBV, and JNJ stocks have strong balance sheets, proactive management and several important drugs in the pipeline that are likely to keep them ahead of the competition. AbbVie (ABBV) Source: Shutterstock AbbVie is a $115-billion-market-cap biopharma stock, but shares have been in a downtrend for almost a year, especially following the earnings report on April 25. | Despite competitive pressures from other big pharma and biotech companies, GSK, ABBV, and JNJ stocks have strong balance sheets, proactive management and several important drugs in the pipeline that are likely to keep them ahead of the competition. Therefore, today I’d like to discuss the outlook for three such stocks, namely GlaxoSmithKline (NYSE:), AbbVie (NYSE:), and Johnson & Johnson (NYSE:). AbbVie (ABBV) Source: Shutterstock AbbVie is a $115-billion-market-cap biopharma stock, but shares have been in a downtrend for almost a year, especially following the earnings report on April 25. | Despite competitive pressures from other big pharma and biotech companies, GSK, ABBV, and JNJ stocks have strong balance sheets, proactive management and several important drugs in the pipeline that are likely to keep them ahead of the competition. Therefore, today I’d like to discuss the outlook for three such stocks, namely GlaxoSmithKline (NYSE:), AbbVie (NYSE:), and Johnson & Johnson (NYSE:). AbbVie (ABBV) Source: Shutterstock AbbVie is a $115-billion-market-cap biopharma stock, but shares have been in a downtrend for almost a year, especially following the earnings report on April 25. | AbbVie (ABBV) Source: Shutterstock AbbVie is a $115-billion-market-cap biopharma stock, but shares have been in a downtrend for almost a year, especially following the earnings report on April 25. Since its spinoff from Abbott Laboratories, ABBV has increased dividends every year — a trend that is likely to continue. Therefore, today I’d like to discuss the outlook for three such stocks, namely GlaxoSmithKline (NYSE:), AbbVie (NYSE:), and Johnson & Johnson (NYSE:). |
24962.0 | 2019-06-25 00:00:00 UTC | Mid-Afternoon Market Update: NASDAQ Down 1.5%; Acer Therapeutics Shares Slide | ABBV | https://www.nasdaq.com/articles/mid-afternoon-market-update%3A-nasdaq-down-1.5-acer-therapeutics-shares-slide-2019-06-25 | nan | nan | Toward the end of trading Tuesday, the Dow traded down 0.71% to 26,536.70 while the NASDAQ fell 1.5% to 7,884.88. The S&P also fell, dropping 0.87% to 2,919.76.
Leading and Lagging Sectors
Materials shares rose 0.2% on Tuesday. Meanwhile, top gainers in the sector included New Gold Inc. (NYSE: NGD), up 8%, and Neenah, Inc. (NYSE: NP), up 6%.
In trading on Tuesday, communication services shares fell 1.3%.
Top Headline
Lennar Corporation (NYSE: LEN) announced better-than-expected results for its second quarter.
Lennar reported second-quarter earnings of $1.30 per share, which beat the analyst consensus estimate of $1.14. The company reported quarterly sales of $5.6 billion, which beat the analyst consensus estimate of $5.1 billion.
Equities Trading UP
Pyxus International, Inc. (NYSE: PYX) shares shot up 23% to $16.52 after Imperial Capital initiated coverage on the stock with an Outperform rating and announced a $71 price target.
Shares of Allergan plc (NYSE: AGN) got a boost, shooting up 27% to $164.14. AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share.
Xencor, Inc. (NASDAQ: XNCR) shares were also up, gaining 13% to $38.30 after it was announced the company would replace HFF Inc in the S&P SmallCap 600..
Equities Trading DOWN
Acer Therapeutics Inc. (NASDAQ: ACER) shares tumbled 79% to $3.9701 after the FDA rejected its New Drug Application for EDSIVO.
Shares of Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) were down 66% to $0.3165 after the company announced its ENCORE-LF trial of Emricasan did not meet its primary endpoint. The company will discontinue treatment, reduce its workforce and pursue strategic alternatives.
Gamida Cell Ltd. (NASDAQ: GMDA) was down, falling 26% to $5.30. Gamida Cell announced the launch of a proposed follow-on public offering of about $30 million worth of its shares.
Commodities
In commodity news, oil traded up 0.2% to $58.01, while gold traded up 0.6% to $1,427.20.
Silver traded down 0.1% Tuesday to $15.37, while copper rose 0.8% to $2.7265.
Euro zone
European shares closed mostly lower today. The eurozone’s STOXX 600 fell 0.1%, the Spanish Ibex Index fell 0.36%, while Italy’s FTSE MIB Index dropped 0.73%. Meanwhile, the German DAX slipped 0.38%, and the French CAC 40 fell 0.13% while UK shares rose 0.08%.
Economics
The Johnson Redbook Retail Sales Index fell 2.5% during the first three weeks of June versus May.
The S&P Corelogic Case-Shiller home price index increased 2.5% year-over-year in April, versus a revised 2.6 percent rise in the prior month.
The FHFA's house price index rose 0.4% in April, compared to a 0.1% increase in the prior month.
New home sales fell 7.8% for May to an annual rate of 626,000 in May.
The Conference Board consumer confidence index fell to 121.5 for June, versus a revised reading of 131.3.
The Richmond Fed's manufacturing index fell to 3 for June, versus prior reading of 5.
St. Louis Federal Reserve Bank President James Bullard will speak in St. Louis, Missouri at 6:30 p.m. ET.
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Equities Trading UP Pyxus International, Inc. (NYSE: PYX) shares shot up 23% to $16.52 after Imperial Capital initiated coverage on the stock with an Outperform rating and announced a $71 price target. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. The company reported quarterly sales of $5.6 billion, which beat the analyst consensus estimate of $5.1 billion. | Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. In trading on Tuesday, communication services shares fell 1.3%. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Leading and Lagging Sectors Materials shares rose 0.2% on Tuesday. |
24963.0 | 2019-06-25 00:00:00 UTC | Health Care Sector Update for 06/25/2019: BPMX,AGN,ABBV,CNAT,NVS | ABBV | https://www.nasdaq.com/articles/health-care-sector-update-for-06-25-2019%3A-bpmxagnabbvcnatnvs-2019-06-25-0 | nan | nan | (Corrects percentage change higher for BioPharmX)
Top Health Care Stocks
JNJ +0.58%
PFE +0.32%
ABT -0.03%
MRK -0.66%
AMGN +0.35%
Health care stocks were little changed in recent trade, including a fractional loss for the NYSE Health Care Index while shares of health care companies in the S&P 500 were up slightly as a group. The Nasdaq Biotechnology index was climbing 0.7%.
Among health care stocks moving on news:
(-) BioPharmX (BPMX) was down 3% after jumping as much as 32.6% earlier after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. The topical gel met its primary endpoint of a statistically significant drop in the number of inflammatory facial lesions after 12 weeks compared with a vehicle control.
In other sector news:
(+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. The deal values Allergan at $188.24 per share, representing a 45% premium to Allergan's closing price on Monday.
(-) Conatus Pharmaceuticals (CNAT) dropped as much as 66% to a record low of 31 cents a share after announcing an aggressive restructuring plan, including laying off 40% of its existing staff and suspending development on its CTS-2090 drug candidate to treat inflammasome disease, after its emricasan prospective treatment for liver disease failed to meet its primary target during phase III testing.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Among health care stocks moving on news: (-) BioPharmX (BPMX) was down 3% after jumping as much as 32.6% earlier after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. The topical gel met its primary endpoint of a statistically significant drop in the number of inflammatory facial lesions after 12 weeks compared with a vehicle control. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. (Corrects percentage change higher for BioPharmX) Top Health Care Stocks Health care stocks were little changed in recent trade, including a fractional loss for the NYSE Health Care Index while shares of health care companies in the S&P 500 were up slightly as a group. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Health care stocks were little changed in recent trade, including a fractional loss for the NYSE Health Care Index while shares of health care companies in the S&P 500 were up slightly as a group. (-) Conatus Pharmaceuticals (CNAT) dropped as much as 66% to a record low of 31 cents a share after announcing an aggressive restructuring plan, including laying off 40% of its existing staff and suspending development on its CTS-2090 drug candidate to treat inflammasome disease, after its emricasan prospective treatment for liver disease failed to meet its primary target during phase III testing. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. The Nasdaq Biotechnology index was climbing 0.7%. Among health care stocks moving on news: (-) BioPharmX (BPMX) was down 3% after jumping as much as 32.6% earlier after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. |
24964.0 | 2019-06-25 00:00:00 UTC | Health Care Sector Update for 06/25/2019: BPMX,AGN,ABBV,CNAT,NVS | ABBV | https://www.nasdaq.com/articles/health-care-sector-update-for-06-25-2019%3A-bpmxagnabbvcnatnvs-2019-06-25 | nan | nan | Top Health Care Stocks
JNJ +0.58%
PFE +0.32%
ABT -0.03%
MRK -0.66%
AMGN +0.35%
Health care stocks were little changed in recent trade, including a fractional loss for the NYSE Health Care Index while shares of health care companies in the S&P 500 were up slightly as a group. The Nasdaq Biotechnology index was climbing 0.7%.
Among health care stocks moving on news:
(-) BioPharmX (BPMX) was down 3% after jumping 32% earlier after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. The topical gel met its primary endpoint of a statistically significant drop in the number of inflammatory facial lesions after 12 weeks compared with a vehicle control.
In other sector news:
(+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. The deal values Allergan at $188.24 per share, representing a 45% premium to Allergan's closing price on Monday.
(-) Conatus Pharmaceuticals (CNAT) dropped as much as 66% to a record low of 31 cents a share after announcing an aggressive restructuring plan, including laying off 40% of its existing staff and suspending development on its CTS-2090 drug candidate to treat inflammasome disease, after its emricasan prospective treatment for liver disease failed to meet its primary target during phase III testing.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Among health care stocks moving on news: (-) BioPharmX (BPMX) was down 3% after jumping 32% earlier after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. The topical gel met its primary endpoint of a statistically significant drop in the number of inflammatory facial lesions after 12 weeks compared with a vehicle control. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Top Health Care Stocks Health care stocks were little changed in recent trade, including a fractional loss for the NYSE Health Care Index while shares of health care companies in the S&P 500 were up slightly as a group. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. Health care stocks were little changed in recent trade, including a fractional loss for the NYSE Health Care Index while shares of health care companies in the S&P 500 were up slightly as a group. (-) Conatus Pharmaceuticals (CNAT) dropped as much as 66% to a record low of 31 cents a share after announcing an aggressive restructuring plan, including laying off 40% of its existing staff and suspending development on its CTS-2090 drug candidate to treat inflammasome disease, after its emricasan prospective treatment for liver disease failed to meet its primary target during phase III testing. | In other sector news: (+) Allergan (AGN) climbed as much as 30% during Tuesday trading after the Irish drugmaker agreed to a $63 billion buyout offer from AbbVie (ABBV), which will swap $120.30 in cash and 0.8660 of an AbbVie share for each Allergan share. The Nasdaq Biotechnology index was climbing 0.7%. Among health care stocks moving on news: (-) BioPharmX (BPMX) was down 3% after jumping 32% earlier after the specialty pharmaceuticals company reported positive results from phase IIb testing of its BPX-04 drug candidate in patients with moderate to severe papulopustular rosacea. |
24965.0 | 2019-06-25 00:00:00 UTC | Mid-Day Market Update: Allergan Jumps On Acquisition News; Conatus Pharmaceuticals Shares Plunge | ABBV | https://www.nasdaq.com/articles/mid-day-market-update%3A-allergan-jumps-on-acquisition-news-conatus-pharmaceuticals-shares | nan | nan | Midway through trading Tuesday, the Dow traded down 0.38% to 26624.77 while the NASDAQ fell 0.95% to 7,929.49. The S&P also fell, dropping 0.55% to 2,929.04.
Leading and Lagging Sectors
Health care shares slipped by just 0.08% on Tuesday. Meanwhile, top gainers in the sector included Allergan plc (NYSE: AGN), up 26%, and Xencor, Inc. (NASDAQ: XNCR), up 13%.
In trading on Tuesday, communication services shares fell 1.3%.
Top Headline
Lennar Corporation (NYSE: LEN) announced better-than-expected results for its second quarter.
Lennar reported second-quarter earnings of $1.30 per share, which beat the analyst consensus estimate of $1.14. The company reported quarterly sales of $5.6 billion, which beat the analyst consensus estimate of $5.1 billion.
Equities Trading UP
Pyxus International, Inc. (NYSE: PYX) shares shot up 27% to $17.05 after Imperial Capital initiated coverage on the stock with an Outperform rating and announced a $71 price target.
Shares of Allergan plc (NYSE: AGN) got a boost, shooting up 27% to $164.05. AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share.
Rafael Holdings, Inc. (NYSE: RFL) shares were also up, gaining 16% to $27.76. Rafael Pharmaceuticals entered into an out-licensing agreement with Ono Pharmaceutical to accelerate clinical development and commercialization of cancer drug candidate CPI-613 in Japan and other Asian countries. .
Equities Trading DOWN
Acer Therapeutics Inc. (NASDAQ: ACER) shares tumbled 78% to $4.33 after the FDA rejected its New Drug Application for EDSIVO.
Shares of Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) were down 64% to $0.3280 after the company announced its ENCORE-LF trial of Emricasan did not meet its primary endpoint. The company will discontinue treatment, reduce its workforce and pursue strategic alternatives.
Gamida Cell Ltd. (NASDAQ: GMDA) was down, falling 27% to $5.29. Gamida Cell announced the launch of a proposed follow-on public offering of about $30 million worth of its shares.
Commodities
In commodity news, oil traded up 0.2% to $58.03, while gold traded up 0.7% to $1,428.30.
Silver traded up 0.1% Tuesday to $15.39, while copper rose 1.2% to $2.7375.
Euro zone
European shares were mostly lower today. The eurozone’s STOXX 600 fell 0.1%, the Spanish Ibex Index fell 0.36%, while Italy’s FTSE MIB Index dropped 0.73%. Meanwhile, the German DAX slipped 0.38%, and the French CAC 40 fell 0.13% while UK shares rose 0.08%.
Economics
The Johnson Redbook Retail Sales Index fell 2.5% during the first three weeks of June versus May.
The S&P Corelogic Case-Shiller home price index increased 2.5% year-over-year in April, versus a revised 2.6 percent rise in the prior month.
The FHFA's house price index rose 0.4% in April, compared to a 0.1% increase in the prior month.
New home sales fell 7.8% for May to an annual rate of 626,000 in May.
The Conference Board consumer confidence index fell to 121.5 for June, versus a revised reading of 131.3.
The Richmond Fed's manufacturing index fell to 3 for June, versus prior reading of 5.
St. Louis Federal Reserve Bank President James Bullard will speak in St. Louis, Missouri at 6:30 p.m. ET.
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Equities Trading UP Pyxus International, Inc. (NYSE: PYX) shares shot up 27% to $17.05 after Imperial Capital initiated coverage on the stock with an Outperform rating and announced a $71 price target. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. The company reported quarterly sales of $5.6 billion, which beat the analyst consensus estimate of $5.1 billion. | Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Midway through trading Tuesday, the Dow traded down 0.38% to 26624.77 while the NASDAQ fell 0.95% to 7,929.49. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Midway through trading Tuesday, the Dow traded down 0.38% to 26624.77 while the NASDAQ fell 0.95% to 7,929.49. |
24966.0 | 2019-06-25 00:00:00 UTC | AbbVie-Allergan Deal: AGN Stock Soars on $63 Billion Buyout | ABBV | https://www.nasdaq.com/articles/abbvie-allergan-deal%3A-agn-stock-soars-on-%2463-billion-buyout-2019-06-25 | nan | nan | News of an AbbVie-Allergan deal has AGG stock heading higher on Tuesday.
Source:
AbbVie (NYSE:) has announced a new deal that will have it acquiring Allergan (NYSE:) for a total value of $63 billion. The company will be using a mix of cash and stock to acquire all outstanding shares of AGN stock.
The AbbVie-Allergan deal will have the former offering up $120.30 in cash and 0.8660 ABBV shares for each share of AGN stock. This has the company valuing AGN stock at $188.24 per share. This represents a 45% premium over the closing price for AGN stock on Monday.
If the AbbVie-Allergan deal reaches completion, it will leave ABBV shareholders controlling a majority of the company. Holders of ABBV stock will own 83% of the company. The remaining 17% of the company’s stock will belong to holders of AGN stock.
This AbbVie-Allergan deal will also have the two companies seeing synergies as they come together. This includes annual synergies and cost savings of $2 billion starting in the third year after the deal closes.
The AbbVie-Allergan deal will have ABBV continuing to control the company. That means that Richard Gonzalez will continue to serve as its Chairman and CEO. The Board of Directors at the company will gain two new members from AGN’s Board. One of these will be Allergan Chairman and CEO Brent Saunders.
The The AbbVie-Allergan deal will need to complete customary closing conditions before it can reach completion. This will include approval from regulators and shareholders. If all goes well, the deal will close in early 2020.
ABBV stock was down 15% and AGN stock was up 26% as of noon Tuesday.
As of this writing, William White did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | News of an AbbVie-Allergan deal has AGG stock heading higher on Tuesday. If the AbbVie-Allergan deal reaches completion, it will leave ABBV shareholders controlling a majority of the company. Source: AbbVie (NYSE:) has announced a new deal that will have it acquiring Allergan (NYSE:) for a total value of $63 billion. | The AbbVie-Allergan deal will have the former offering up $120.30 in cash and 0.8660 ABBV shares for each share of AGN stock. If the AbbVie-Allergan deal reaches completion, it will leave ABBV shareholders controlling a majority of the company. The AbbVie-Allergan deal will have ABBV continuing to control the company. | The AbbVie-Allergan deal will have the former offering up $120.30 in cash and 0.8660 ABBV shares for each share of AGN stock. News of an AbbVie-Allergan deal has AGG stock heading higher on Tuesday. Source: AbbVie (NYSE:) has announced a new deal that will have it acquiring Allergan (NYSE:) for a total value of $63 billion. | This AbbVie-Allergan deal will also have the two companies seeing synergies as they come together. The AbbVie-Allergan deal will have ABBV continuing to control the company. ABBV stock was down 15% and AGN stock was up 26% as of noon Tuesday. |
24967.0 | 2019-06-25 00:00:00 UTC | Is The AbbVie-Allergan Deal as Bad for AbbVie as the Market Seems to Think? | ABBV | https://www.nasdaq.com/articles/is-the-abbvie-allergan-deal-as-bad-for-abbvie-as-market-seems-to-think-2019-06-25 | nan | nan | B
ack in January, I said that “elephant season” had opened for pharma companies, after the announcement that Bristol Myers Squib (BMY) was buying Celgene. By that, I meant that we could expect more big mergers and acquisitions this year, a prediction that came true this morning with the announcement that AbbVie (ABBV) is finalizing a deal to buy Allergan (AGN).
A move of some kind by AbbVie is not unexpected, given that the maker of the blockbuster drug Humira has come under fire recently for a perceived failure to protect itself sufficiently from the effects of intense competition to that therapy, and the looming expiration of its patent. As that criticism has intensified, ABBV has plummeted, losing around forty percent from the high in early 2018.
As you can also see from the chart above, this morning’s news hasn’t helped either. At the time of writing, the stock is down nearly sixteen percent from yesterday’s close, taking it to a new two-year low. Given that price action, AbbVie’s management must feel that they just can’t win. They have been punished for doing nothing and now are being punished for doing something, but in the long-term, this still looks like a decent move.
Let’s start with the basic facts. The deal is worth around $63 billion, making it the seventh largest deal in pharma history, and represents a price of about $188 per share of Allergan, paid part in cash and part in stock. That is a big premium to yesterday’s closing price of $129.57, and as a result, AGN is flying this morning.
The size of that premium has led to the initial conclusion from most analysts that this is a great deal for Allergan’s stockholders, and, by extension, a bad one for AbbVie. That is the most obvious way to look at it, but if we take a step back and consider some history, it isn’t necessarily true.
This isn’t the first time Allergan has been targeted for acquisition. Back in 2015, Pfizer (PFE) announced a deal to buy them for a whopping $160 billion, or around $169 billion in today’s dollars. That deal was canceled after the rules around tax inversion, a way of companies shifting their tax burden overseas, were changed. That advantage at the time accounted for some of that price but even so, the $63 billion price tag doesn’t look too bad in that context.
The main thrust of that piece I wrote in January was that whatever the nature and details of big pharma deals in the current environment, there were advantages beyond just the natural synergies of any merger or acquisition. The industry is facing some serious pressure on pricing, and a plethora of small companies with one or two targeted therapies has changed the competitive landscape. Those two things exaggerate the advantages of size in pharma right now—a fact that the market seems to be ignoring. A big, combined company would be better placed to fight pricing regulations, have access to more comprehensive R&D, and would have the cash flow and sheer size to expand their pipeline by buyouts of smaller companies in the future.
In other words, there is value to a big pharma deal that, while not immediately apparent, will become evident over time, and this is no exception.
It wouldn’t surprise me if we saw a bit of a bounce back in ABBV as today wears on, but even so, I would still not advocate rushing out and buying it yet. Over the next few days, analysts will look at this deal in the way they have been trained to, and that is unlikely to result in much positivity. They will assess the price paid and the immediate impact on revenue, and there is a good chance that with each negative release on that basis ABBV will drop a little more.
Before too long though, investors will consider the advantages above, the improved position of the new company relative to their competition, and, most of all, the value of its dividend yield in a static or even falling interest-rate environment. That won’t take long, and when it happens and ABBV will find a low. My best guess right now is that the low will come at around $60, but the trade should be based on price action rather than any particular level, with a couple of positive days in a row prompting a partial buy, and a view to average in several such events.
There is, of course, no guarantee that this will prove to be a good deal, but with all the bad possibilities getting priced in over the next few days there will be an opportunity in ABBV for those who take a slightly longer view.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By that, I meant that we could expect more big mergers and acquisitions this year, a prediction that came true this morning with the announcement that AbbVie (ABBV) is finalizing a deal to buy Allergan (AGN). A move of some kind by AbbVie is not unexpected, given that the maker of the blockbuster drug Humira has come under fire recently for a perceived failure to protect itself sufficiently from the effects of intense competition to that therapy, and the looming expiration of its patent. As that criticism has intensified, ABBV has plummeted, losing around forty percent from the high in early 2018. | By that, I meant that we could expect more big mergers and acquisitions this year, a prediction that came true this morning with the announcement that AbbVie (ABBV) is finalizing a deal to buy Allergan (AGN). A move of some kind by AbbVie is not unexpected, given that the maker of the blockbuster drug Humira has come under fire recently for a perceived failure to protect itself sufficiently from the effects of intense competition to that therapy, and the looming expiration of its patent. As that criticism has intensified, ABBV has plummeted, losing around forty percent from the high in early 2018. | By that, I meant that we could expect more big mergers and acquisitions this year, a prediction that came true this morning with the announcement that AbbVie (ABBV) is finalizing a deal to buy Allergan (AGN). There is, of course, no guarantee that this will prove to be a good deal, but with all the bad possibilities getting priced in over the next few days there will be an opportunity in ABBV for those who take a slightly longer view. A move of some kind by AbbVie is not unexpected, given that the maker of the blockbuster drug Humira has come under fire recently for a perceived failure to protect itself sufficiently from the effects of intense competition to that therapy, and the looming expiration of its patent. | There is, of course, no guarantee that this will prove to be a good deal, but with all the bad possibilities getting priced in over the next few days there will be an opportunity in ABBV for those who take a slightly longer view. By that, I meant that we could expect more big mergers and acquisitions this year, a prediction that came true this morning with the announcement that AbbVie (ABBV) is finalizing a deal to buy Allergan (AGN). A move of some kind by AbbVie is not unexpected, given that the maker of the blockbuster drug Humira has come under fire recently for a perceived failure to protect itself sufficiently from the effects of intense competition to that therapy, and the looming expiration of its patent. |
24968.0 | 2019-06-25 00:00:00 UTC | Stock Market News: AbbVie Bets Big; Can Microsoft Stay on Top? | ABBV | https://www.nasdaq.com/articles/stock-market-news%3A-abbvie-bets-big-can-microsoft-stay-on-top-2019-06-25 | nan | nan | Tuesday morning brought modest declines to the stock market, falling back from near-record levels as investors tried to get a handle on a wide variety of issues. Fears that the U.S. economy could fall into recession if the Federal Reserve doesn't intervene seemed to gain momentum, pushing 10-year Treasury bond yields back below the 2% mark. By 11:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was down 40 points to 26,688. The S&P 500 (SNPINDEX: ^GSPC) lost 10 points to 2,935, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was down 52 points to 7,954.
In the gap between earnings seasons, major corporate moves take on greater importance, and today, AbbVie (NYSE: ABBV) announced a huge deal to acquire Allergan (NYSE: AGN) that many investors seemed not to like. Meanwhile, Microsoft (NASDAQ: MSFT) has been the darling among tech giants lately, and some wonder if it'll be able to keep its market capitalization above the $1 trillion mark longer than two of its rivals did.
AbbVie pays up for growth
Shares of AbbVie sank 15% after the pharma giant said that it would buy industry peer Allergan. The deal values the maker of Botox at $63 billion.
Image source: AbbVie.
Under the terms of the merger agreement, AbbVie will pay $120.30 in cash and 0.8660 AbbVie shares for every Allergan share investors own. That amounts to a total of $188.24 per share -- far above the $129.57-per-share price at which Allergan's stock closed Monday afternoon.
It's easy to understand why AbbVie decided to make such an aggressive move. With its blockbuster drug Humira looking ahead at a downward spiral in sales from patent expirations and greater competition, AbbVie had to take steps to bolster its growth prospects. CEO Richard Gonzalez thinks buying Allergan will do just that, calling the deal "a transformational transaction for both companies [that] achieves unique and complementary strategic objectives."
Yet skeptics believe that AbbVie could have done better elsewhere. Allergan has faced some difficulties recently in finding growth of its own, and although Botox has done well, setbacks in areas like its CoolSculpting process and its Restasis eye treatment don't necessarily point to lightning-fast growth.
At their current prices, investors don't have high confidence that the AbbVie-Allergan deal will go through. Based on today's reaction in AbbVie's stock, that might not be such a bad result for the pharma giant.
Microsoft holds onto its sky-high market cap
Meanwhile, shares of Microsoft were down 2% Tuesday morning. That wasn't enough to take away the tech giant's $1 trillion-plus market cap, but it reflected some long-term concerns about the company's prospects for parts of its core business.
Analysts at Jefferies presented a more negative case for Microsoft in light of the stock's huge run higher so far this year. Jefferies kept an underperform rating on Microsoft, arguing that its valuation risen too far even as it continues to face massive competitive pressures. In particular, although Microsoft's Azure cloud computing platform has gained momentum, it's still likely to underperform Amazon.com's Amazon Web Services unit in terms of profit margin. Jefferies did boost its price target on the stock by $10, but that leaves the new figure of $90 per share still roughly a third below its current level.
As the third stock to achieve $1 trillion status, Microsoft is looking to succeed where its rivals have failed. Amazon and Apple were both above that key level for a short time, but they've since lost ground and stand well below that mark. Fans of the Redmond-based Windows maker think that a strong mix of loyal customers for office productivity and operating system software should provide a base of support.
Regardless of what happens in the long run, Microsoft has already proven to be a success story. After a decade in the doldrums, the company reinvented itself in a way while taking full advantage of its stranglehold on key products. As long as it remains the go-to place for those needing office productivity software, Microsoft should be able to hang onto its $1 trillion market cap.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With its blockbuster drug Humira looking ahead at a downward spiral in sales from patent expirations and greater competition, AbbVie had to take steps to bolster its growth prospects. In the gap between earnings seasons, major corporate moves take on greater importance, and today, AbbVie (NYSE: ABBV) announced a huge deal to acquire Allergan (NYSE: AGN) that many investors seemed not to like. AbbVie pays up for growth Shares of AbbVie sank 15% after the pharma giant said that it would buy industry peer Allergan. | In the gap between earnings seasons, major corporate moves take on greater importance, and today, AbbVie (NYSE: ABBV) announced a huge deal to acquire Allergan (NYSE: AGN) that many investors seemed not to like. Under the terms of the merger agreement, AbbVie will pay $120.30 in cash and 0.8660 AbbVie shares for every Allergan share investors own. AbbVie pays up for growth Shares of AbbVie sank 15% after the pharma giant said that it would buy industry peer Allergan. | AbbVie pays up for growth Shares of AbbVie sank 15% after the pharma giant said that it would buy industry peer Allergan. Under the terms of the merger agreement, AbbVie will pay $120.30 in cash and 0.8660 AbbVie shares for every Allergan share investors own. In the gap between earnings seasons, major corporate moves take on greater importance, and today, AbbVie (NYSE: ABBV) announced a huge deal to acquire Allergan (NYSE: AGN) that many investors seemed not to like. | AbbVie pays up for growth Shares of AbbVie sank 15% after the pharma giant said that it would buy industry peer Allergan. Under the terms of the merger agreement, AbbVie will pay $120.30 in cash and 0.8660 AbbVie shares for every Allergan share investors own. In the gap between earnings seasons, major corporate moves take on greater importance, and today, AbbVie (NYSE: ABBV) announced a huge deal to acquire Allergan (NYSE: AGN) that many investors seemed not to like. |
24969.0 | 2019-06-25 00:00:00 UTC | Why AbbVie Stock Is Sinking and Allergan Is Soaring Today | ABBV | https://www.nasdaq.com/articles/why-abbvie-stock-is-sinking-and-allergan-is-soaring-today-2019-06-25 | nan | nan | What happened
Shares of AbbVie (NYSE: ABBV) were sinking by 14.8% as of 10:38 a.m. EDT on Tuesday while shares of Allergan (NYSE: AGN) were soaring by 26.7%. These big moves came after AbbVie announced plans to acquire Allergan for $63 billion. Investors clearly didn't like AbbVie's decision to buy the Irish drugmaker, but it was great news for Allergan's shareholders.
So what
The deal represented a 45% premium above Allergan's closing price on Monday, giving Allergan shareholders a reason to be happy. However, many investors appear to think that AbbVie is making a $63 billion mistake.
Image source: Getty Images.
Allergan's top drug, Botox, continues to deliver solid growth. However, Botox also faces increased competition with a new -- and cheaper -- drug from Evolus (NASDAQ: EOLS) winning Food and Drug Administration approval earlier this year. Allergan's No. 2 moneymaker, Restasis, faces the prospects of generic competition beginning in 2024 and is already experiencing price erosion.
There are plenty of worries about Allergan's pipeline as well. Abicipar is the crown jewel with some analysts projecting peak annual sales in the ballpark of $3 billion if approved. But safety concerns could put a dent in the ability for the eye-disease drug to achieve those estimates.
Perhaps the biggest reason for a letdown with AbbVie's shareholders is that they were hoping that the company would make a deal that would reenergize the stock. AbbVie's shares were down year to date even before the Allergan announcement as investors fretted over declining sales of the company's top-selling drug Humira. The Allergan acquisition could merely add to AbbVie's problems in the eyes of some investors.
Now what
It's not a done deal yet. Both AbbVie and Allergan shareholders must approve the transaction. There are also plenty of regulatory hurdles to jump. But AbbVie expects the acquisition to close in early 2020.
Assuming the deal is finalized, AbbVie thinks that it will boost earnings per share (EPS) by 10% in the first full year following the close. In subsequent years, AbbVie maintains that EPS could increase by more than 20% due to the pickup of Allergan's products.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors clearly didn't like AbbVie's decision to buy the Irish drugmaker, but it was great news for Allergan's shareholders. AbbVie's shares were down year to date even before the Allergan announcement as investors fretted over declining sales of the company's top-selling drug Humira. Assuming the deal is finalized, AbbVie thinks that it will boost earnings per share (EPS) by 10% in the first full year following the close. | What happened Shares of AbbVie (NYSE: ABBV) were sinking by 14.8% as of 10:38 a.m. EDT on Tuesday while shares of Allergan (NYSE: AGN) were soaring by 26.7%. These big moves came after AbbVie announced plans to acquire Allergan for $63 billion. Investors clearly didn't like AbbVie's decision to buy the Irish drugmaker, but it was great news for Allergan's shareholders. | AbbVie's shares were down year to date even before the Allergan announcement as investors fretted over declining sales of the company's top-selling drug Humira. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Keith Speights owns shares of AbbVie. What happened Shares of AbbVie (NYSE: ABBV) were sinking by 14.8% as of 10:38 a.m. EDT on Tuesday while shares of Allergan (NYSE: AGN) were soaring by 26.7%. | What happened Shares of AbbVie (NYSE: ABBV) were sinking by 14.8% as of 10:38 a.m. EDT on Tuesday while shares of Allergan (NYSE: AGN) were soaring by 26.7%. These big moves came after AbbVie announced plans to acquire Allergan for $63 billion. Investors clearly didn't like AbbVie's decision to buy the Irish drugmaker, but it was great news for Allergan's shareholders. |
24970.0 | 2019-06-25 00:00:00 UTC | DGRO, VZ, ABBV, MRK: Large Inflows Detected at ETF | ABBV | https://www.nasdaq.com/articles/dgro-vz-abbv-mrk%3A-large-inflows-detected-at-etf-2019-06-25 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $158.8 million dollar inflow -- that's a 2.1% increase week over week in outstanding units (from 199,750,000 to 203,900,000). Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is off about 0.3%, AbbVie Inc (Symbol: ABBV) is off about 15.1%, and Merck & Co Inc (Symbol: MRK) is higher by about 0.4%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average:
Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.50 as the 52 week high point — that compares with a last trade of $38.06. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is off about 0.3%, AbbVie Inc (Symbol: ABBV) is off about 15.1%, and Merck & Co Inc (Symbol: MRK) is higher by about 0.4%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.50 as the 52 week high point — that compares with a last trade of $38.06. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is off about 0.3%, AbbVie Inc (Symbol: ABBV) is off about 15.1%, and Merck & Co Inc (Symbol: MRK) is higher by about 0.4%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.50 as the 52 week high point — that compares with a last trade of $38.06. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is off about 0.3%, AbbVie Inc (Symbol: ABBV) is off about 15.1%, and Merck & Co Inc (Symbol: MRK) is higher by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $158.8 million dollar inflow -- that's a 2.1% increase week over week in outstanding units (from 199,750,000 to 203,900,000). For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.50 as the 52 week high point — that compares with a last trade of $38.06. | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is off about 0.3%, AbbVie Inc (Symbol: ABBV) is off about 15.1%, and Merck & Co Inc (Symbol: MRK) is higher by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $158.8 million dollar inflow -- that's a 2.1% increase week over week in outstanding units (from 199,750,000 to 203,900,000). For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.50 as the 52 week high point — that compares with a last trade of $38.06. |
24971.0 | 2019-06-25 00:00:00 UTC | The 10 Biggest Biotech Stocks | ABBV | https://www.nasdaq.com/articles/the-10-biggest-biotech-stocks-2019-06-25 | nan | nan | If you're looking for a way to beat the market over the long run, biotech stocks look like a pretty good option. Over the last 10 years, the SPDR S&P Biotech ETF (NYSEMKT: XBI), which holds positions in more than 100 biotech stocks, has nearly doubled the performance of the S&P 500 Index.
Some investors are leery of biotech stocks, though. That mindset stems at least in part from the fact that hundreds of small biotechs are unprofitable and have no approved products. Still, there are quite a few large-cap biotech stocks that generate significant profits and claim multiple drugs on the market.
The 10 biggest biotech stocks together generate more than $50 billion in annual earnings and well over $200 billion in annual sales. Here's what you need to know about these biggest biotech stocks on the market right now.
Image source: Getty Images.
What exactly is a biotech?
Technically speaking, a biotech is a company that develops biologic drugs. These biologic drugs are large, complex molecules that are manufactured within a living organism.
Any drugmaker that develops biologic drugs could be referred to as a biotech. Because biologic drugs have proven to be highly effective at treating lots of diseases, most big pharmaceutical companies now include biologic drugs in their product lineups and pipelines. But, at least in most cases, these big pharma companies aren't called biotechs.
Johnson & Johnson (NYSE: JNJ), for example, markets multiple biologic drugs, including the company's top two best-selling drugs, Remicade and Stelara. However, J&J usually isn't referred to as a biotech because it makes the majority of its revenue from sources other than biologic drugs.
On the other hand, Gilead Sciences (NASDAQ: GILD) usually is categorized as a biotech stock. However, Gilead makes most of its revenue from non-biologic drugs. So, why is Gilead called a biotech stock while J&J isn't? The word "biotech" has also been frequently used in the past to describe any small drugmaker that wasn't a big pharma company. And for much of its existence, Gilead was a relatively small drugmaker.
As you can see, identifying exactly which drug stocks are biotech stocks and which aren't isn't a straightforward task. For this ranking of the biggest biotech stocks, we'll use two criteria. First, any stock that's included in the holdings of the SPDR S&P Biotech ETF will be counted as a biotech stock. Second, any big pharma stock that isn't in the ETF's holdings but derives more than half of its total revenue from biologic drugs will be considered to be a biotech stock.
Biggest biotech stocks
The 10 biggest biotech stocks on the market range from healthcare giants that have been in business for more than a century to companies that have grown rapidly in just the last few years. These biotechs focus on a wide range of therapeutic areas, from relatively common inflammatory diseases to rare genetic diseases.
Data source: Yahoo! Finance. Market caps as of June 24, 2019.
Here are some highlights for each of these big biotech stocks.
1. Roche Holdings
Roche's majority stake in Genentech made the Swiss healthcare giant a leader in the biotech world long before it finally acquired all of Genentech in 2009. In 2017, four of the world's top 10 best-selling biologics were marketed by Roche. Sales are slipping for a couple of those blockbuster drugs now, though, as they face competition from biosimilars -- which are similar enough to the original drug that there isn't a clinically meaningful difference.
However, Roche claims several biologic drugs for which sales are soaring. These include breast cancer drug Perjeta, multiple sclerosis drug Ocrevus, and cancer immunotherapy Tecentriq.
The big biotech has a robust late-stage pipeline. Roche hopes to pick up approvals for additional indications for several of its existing drugs, especially Tecentriq. Its pipeline also includes several promising new drugs targeting the treatment of cancer, inflammatory diseases, and rare diseases.
2. Novo Nordisk
Novo Nordisk makes most of its revenue from its strong diabetes franchise. The company's products include top-selling insulin products such as Tresiba and NovoRapid. Novo Nordisk's fastest-rising product is type 2 diabetes drug Ozempic, which ranked as one of the top new drugs launched in 2018.
The drugmaker has also enjoyed success on a couple of other fronts. Obesity drug Saxenda is picking up strong sales momentum. Novo Nordisk's hemophilia and growth disorders drugs contribute significantly to its top line.
Novo Nordisk's late-stage pipeline doesn't appear to be overly impressive, though. The company only has two late-stage candidates, with Ozempic being evaluated for treating diabetes, and somapacitan in phase 3 clinical testing for treating growth disorders. However, Novo Nordisk's early and mid-stage pipeline could be more promising, with several new diabetes, obesity, and rare disease drugs in development.
3. AbbVie
AbbVie is another big pharma that qualifies as a biotech thanks primarily to its biologic immunology drug Humira. In 2018, Humira ranked as the top-selling drug in the world and generated 61% of AbbVie's total revenue. However, sales for the drug have begun to slip as Humira faces biosimilar competition in Europe.
The good news for AbbVie is that it has several potential products to offset the declining sales for Humira. Imbruvica is at the top of that list. EvaluatePharma projects that AbbVie's cancer drug will be one of the five biggest blockbuster drugs of the future, with sales of $9.5 billion by 2024. Endometriosis drug Orilissa and new psoriasis drug Skyrizi are also expected to be big winners.
AbbVie's pipeline claims what could be the second-biggest new drug launched in 2019: upadacitinib. The big biotech thinks the drug could achieve peak annual sales of $6.5 billion. In addition, AbbVie has late-stage clinical studies in progress in hopes of picking up additional approvals for Orilissa in treating uterine fibroids and for Imbruvica and Venclexta in treating other types of cancer.
4. Amgen
Amgen's lineup currently includes seven blockbuster drugs. The problem for the big biotech, though, is that sales are under pressure for four of these drugs -- Enbrel, Neulasta, Epogen, and Aranesp -- with intense competition from newer rivals.
However, sales continue to soar for osteoporosis drug Prolia. Multiple myeloma drug Kyprolis could be on track to become Amgen's next blockbuster. The company also has high hopes for cholesterol drug Repatha, leukemia drug Blincyto, and migraine drug Aimovig, which Amgen is co-marketing with Novartis (NYSE: NVS).
Amgen doesn't have a particularly deep late-stage pipeline with only six programs, three of which target new indications for existing drugs. Another of the biotech's late-stage candidates is an experimental Alzheimer's disease drug that uses a similar approach taken by several other drugs that have already flopped in clinical testing. However, Amgen's early-stage pipeline looks promising, with several immunotherapies targeting various types of cancer in development.
5. Eli Lilly
You might not think of Eli Lilly as a biotech stock. But with the company's top-selling diabetes, cancer, and immunology therapies, well over half of Lilly's total revenue comes from biologic drugs, making it a biotech stock according to the criteria used for this ranking.
Lilly's rising stars right now include diabetes drug Trulicity, insulin product Basaglar, breast cancer drug Verzenio, and psoriasis drug Taltz. Increasing sales for these and some of the company's other products have enabled Lilly to more than make up for falling sales for several of its older drugs. New migraine drug Emgality should be another big winner for Lilly.
The drugmaker also claims a solid pipeline with 18 late-stage programs. These programs include new immunology drug mirikizumab and pain drug tanezumab as well as existing drugs such as Jardiance and Trulicity targeting additional indications.
6. Gilead Sciences
Gilead Sciences pioneered the treatment of HIV, and the biotech remains the market leader with six blockbuster HIV drugs in 2018. Gilead's latest success story, Biktarvy, appears likely to become the best-selling HIV drug of all time.
But Gilead isn't only focused on HIV. The company's hepatitis C virus (HCV) franchise continues to generate billions of dollars in revenue annually, although sales have dropped as Gilead and its main rival AbbVie battle each other for fewer new patients. Gilead also is a leader in cell therapy with Yescarta, a drug it gained with its 2017 acquisition of Kite Pharma.
The company's top late-stage pipeline candidate, filgotinib, could make Gilead a winner in yet another therapeutic category -- immunology. It's also hoping to add new approved indications for Descovy as a pre-exposure prophylaxis (PrEP) therapy for HIV and for Yescarta as a treatment for previously treated diffuse large B-cell lymphoma (DLBCL).
7. Celgene
Celgene's flagship product right now is Revlimid. This blood cancer drug currently accounts for over 60% of the biotech's total revenue. However, Revlimid faces generic competition beginning in 2022.
In addition to Revlimid, though, Celgene claims several other big winners: multiple myeloma drug Pomalyst, immunology drug Otezla, and cancer drug Abraxane. Celgene's pipeline is loaded with potential blockbusters, including multiple sclerosis drug ozanimod, cancer cell therapies bb2121 and liso-cel, blood disorder drug luspatercept, and myelofibrosis drug fedratinib.
However, Celgene won't be a big biotech stock for very long. The company is being acquired by Bristol-Myers Squibb (NYSE: BMY).
8. Vertex Pharmaceuticals
Vertex Pharmaceuticals dominates the market for treating cystic fibrosis (CF), a rare disease that can cause serious damage to the lungs and other organs. The biotech's currently approved CF drugs -- Kalydeco, Orkambi, and Symdeko -- combined to deliver sales of over $3 billion in 2018.
Another successful CF drug could be on the way for Vertex. The company expects to win U.S. and European approvals for a triple-drug combination in 2020. This combo, if approved, should expand the number of patients eligible for treatment with Vertex's drugs by 75%.
Vertex is also seeking to expand into diseases beyond CF. The biotech teamed up with CRISPR Therapeutics (NASDAQ: CRSP) to develop gene therapies targeting rare blood disorders beta-thalassemia and sickle cell disease. Vertex acquired Exonics Therapeutics and expanded its relationship with CRISPR Therapeutics to focus on gene therapies for treating rare genetic diseases Duchenne Muscular Dystrophy (DMD) and Myotonic Dystrophy Type 1 (DM1). Vertex's pipeline also includes a promising pain drug.
9. Biogen
Biogen rose to become a top biotech based on the strength of its multiple sclerosis (MS) franchise. However, sales for its interferon products Avonex and Plegridy have slipped. Tysabri also faces tough competition from Roche's Ocrevus, which Biogen initially developed but licensed to the Swiss drugmaker several years ago.
The biggest growth driver for Biogen now is its spinal muscular atrophy (SMA) drug Spinraza. However, that growth could be in jeopardy with the U.S. Food and Drug Administration's (FDA) approval for Novartis' SMA gene therapy Zolgensma.
Biogen had hoped to launch a game-changing Alzheimer's disease drug with aducanumab, but the once-promising drug failed in late-stage clinical studies. That leaves Biogen with four late-stage pipeline candidates, one of which also targets Alzheimer's disease.
10. Regeneron Pharmaceuticals
Regeneron Pharmaceuticals' eye-disease drug Eylea fueled the biotech's early success. Eylea continues to generate more than 60% of Regeneron's total revenue.
The company's partnership with Sanofi (NASDAQ: SNY) has also provided several winners for Regeneron. Eczema drug Dupixent has been the most successful of these drugs so far. Cancer immunotherapy Libtayo is also expected to become a blockbuster drug from the collaboration between Regeneron and Sanofi.
Regeneron's pipeline includes seven late-stage programs. Four of these late-stage programs are evaluating existing drugs in treating new indications. The three new drug candidates include promising pain drug fasinumab, which Regeneron is developing with Teva Pharmaceutical (NYSE: TEVA).
Risks for these big biotech stocks
Each of these 10 big biotech stocks face risks. There's always the possibility of clinical failures. Most of the companies' products compete against rival drugs that are already on the market and potentially new rival drugs on the way. Several of the biotechs, including AbbVie, Celgene, and Roche, either are already battling biosimilar or generic competition or will do so in the not-too-distant future.
There's also the possibility that healthcare reform in the U.S. could hurt some of these stocks. Politicians from both major parties have focused on ways to address high prescription drug costs. Some of the proposed solutions to these problems could negatively affect the growth prospects for these biotechs.
However, these 10 biotech stocks aren't as risky as most small-cap biotech stocks. They all generate significant revenue and profits that can be used to invest in developing new drugs or to make strategic acquisitions to fuel growth. Over the long run, big biotechs tend to get even bigger.
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Keith Speights owns shares of AbbVie, Celgene, Gilead Sciences, SPDR S&P Biotech, and Vertex Pharmaceuticals. The Motley Fool owns shares of and recommends Biogen, Celgene, and Gilead Sciences. The Motley Fool owns shares of CRISPR Therapeutics. The Motley Fool recommends Amgen, Johnson & Johnson, Novo Nordisk, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The company's hepatitis C virus (HCV) franchise continues to generate billions of dollars in revenue annually, although sales have dropped as Gilead and its main rival AbbVie battle each other for fewer new patients. AbbVie AbbVie is another big pharma that qualifies as a biotech thanks primarily to its biologic immunology drug Humira. In 2018, Humira ranked as the top-selling drug in the world and generated 61% of AbbVie's total revenue. | AbbVie AbbVie is another big pharma that qualifies as a biotech thanks primarily to its biologic immunology drug Humira. In 2018, Humira ranked as the top-selling drug in the world and generated 61% of AbbVie's total revenue. The good news for AbbVie is that it has several potential products to offset the declining sales for Humira. | AbbVie AbbVie is another big pharma that qualifies as a biotech thanks primarily to its biologic immunology drug Humira. In 2018, Humira ranked as the top-selling drug in the world and generated 61% of AbbVie's total revenue. The good news for AbbVie is that it has several potential products to offset the declining sales for Humira. | AbbVie AbbVie is another big pharma that qualifies as a biotech thanks primarily to its biologic immunology drug Humira. In 2018, Humira ranked as the top-selling drug in the world and generated 61% of AbbVie's total revenue. The good news for AbbVie is that it has several potential products to offset the declining sales for Humira. |
24972.0 | 2019-06-25 00:00:00 UTC | S&P 500 Movers: ABBV, AGN | ABBV | https://www.nasdaq.com/articles/sp-500-movers%3A-abbv-agn-2019-06-25 | nan | nan | In early trading on Tuesday, shares of Allergan (AGN) topped the list of the day's best performing components of the S&P 500 index, trading up 27.2%. Year to date, Allergan registers a 23.3% gain.
And the worst performing S&P 500 component thus far on the day is AbbVie (ABBV), trading down 14.5%. AbbVie is lower by about 27.2% looking at the year to date performance.
Two other components making moves today are Kroger (KR), trading down 2.7%, and Biogen (BIIB), trading up 3.1% on the day.
VIDEO: S&P 500 Movers: ABBV, AGN
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And the worst performing S&P 500 component thus far on the day is AbbVie (ABBV), trading down 14.5%. VIDEO: S&P 500 Movers: ABBV, AGN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. AbbVie is lower by about 27.2% looking at the year to date performance. | And the worst performing S&P 500 component thus far on the day is AbbVie (ABBV), trading down 14.5%. VIDEO: S&P 500 Movers: ABBV, AGN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. AbbVie is lower by about 27.2% looking at the year to date performance. | And the worst performing S&P 500 component thus far on the day is AbbVie (ABBV), trading down 14.5%. AbbVie is lower by about 27.2% looking at the year to date performance. VIDEO: S&P 500 Movers: ABBV, AGN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And the worst performing S&P 500 component thus far on the day is AbbVie (ABBV), trading down 14.5%. AbbVie is lower by about 27.2% looking at the year to date performance. VIDEO: S&P 500 Movers: ABBV, AGN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. |
24973.0 | 2019-06-25 00:00:00 UTC | Mid-Morning Market Update: Markets Open Lower; Lennar Tops Q2 Estimates | ABBV | https://www.nasdaq.com/articles/mid-morning-market-update%3A-markets-open-lower-lennar-tops-q2-estimates-2019-06-25 | nan | nan | Following the market opening Tuesday, the Dow traded down 0.27% to 26,656.50 while the NASDAQ fell 0.33% to 7,979.12. The S&P also fell, dropping 0.21% to 2,939.19.
Leading and Lagging Sectors
Health care shares gained 0.4% on Tuesday. Meanwhile, top gainers in the sector included Allergan plc (NYSE: AGN), up 27%, and Xencor, Inc. (NASDAQ: XNCR), up 14%.
In trading on Tuesday, communication services shares fell 0.8%.
Top Headline
Lennar Corporation (NYSE: LEN) announced better-than-expected results for its second quarter.
Lennar reported second-quarter earnings of $1.30 per share, which beat the analyst consensus estimate of $1.14. The company reported quarterly sales of $5.6 billion, which beat the analyst consensus estimate of $5.1 billion.
Equities Trading UP
Pyxus International, Inc. (NYSE: PYX) shares shot up 34% to $18.00 after Imperial Capital initiated coverage on the stock with an Outperform rating and announced a $71 price target.
Shares of Allergan plc (NYSE: AGN) got a boost, shooting up 27% to $164.90. AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share.
Xencor, Inc. (NASDAQ: XNCR) shares were also up, gaining 14% to $38.68 after it was announced the company would replace HFF Inc in the S&P SmallCap 600. .
Equities Trading DOWN
Acer Therapeutics Inc. (NASDAQ: ACER) shares tumbled 77% to $4.48 after the FDA rejected its New Drug Application for EDSIVO.
Shares of Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) were down 63% to $0.3404 after the company announced its ENCORE-LF trial of Emricasan did not meet its primary endpoint. The company will discontinue treatment, reduce its workforce and pursue strategic alternatives.
Aldeyra Therapeutics, Inc. (NASDAQ: ALDX) was down, falling 23% to $5.47. Aldeyra, which focuses on therapies for immune-mediated diseases, reported its Phase 3 trial dubbed SOLACE that evaluated its reproxalap, code-named ADX-102 (a topical ophthalmic solution) in non-infectious anterior uveitis did not meet both the primary and secondary endpoints.
Commodities
In commodity news, oil traded down 0.2% to $57.80, while gold traded up 0.8% to $1,429.60.
Silver traded down 0.2% Tuesday to $15.35, while copper rose 1.1% to $2.734.
Euro zone
European shares were lower today. The eurozone’s STOXX 600 fell 0.1%, the Spanish Ibex Index fell 0.8%, while Italy’s FTSE MIB Index dropped 0.7%. Meanwhile, the German DAX slipped 0.1%, and the French CAC 40 fell 0.1% while UK shares fell 0.1%.
Economics
The Johnson Redbook Retail Sales Index fell 2.5% during the first three weeks of June versus May.
The S&P Corelogic Case-Shiller home price index increased 2.5% year-over-year in April, versus a revised 2.6 percent rise in the prior month.
The FHFA's house price index rose 0.4% in April, compared to a 0.1% increase in the prior month.
New home sales fell 7.8% for May to an annual rate of 626,000 in May.
The Conference Board consumer confidence index fell to 121.5 for June, versus a revised reading of 131.3.
The Richmond Fed's manufacturing index fell to 3 for June, versus prior reading of 5.
Atlanta Federal Reserve Bank President Raphael Bostic will speak in Atlanta, GA at 12:00 p.m. ET.
Federal Reserve Chairman Jerome Powell is set to speak in New York at 1:00 p.m. ET.
The Treasury is set to auction 2-year notes at 1:00 p.m. ET.
St. Louis Federal Reserve Bank President James Bullard will speak in St. Louis, Missouri at 6:30 p.m. ET.
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Equities Trading UP Pyxus International, Inc. (NYSE: PYX) shares shot up 34% to $18.00 after Imperial Capital initiated coverage on the stock with an Outperform rating and announced a $71 price target. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Meanwhile, top gainers in the sector included Allergan plc (NYSE: AGN), up 27%, and Xencor, Inc. (NASDAQ: XNCR), up 14%. | Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. In trading on Tuesday, communication services shares fell 0.8%. | AbbVie Inc (NYSE: ABBV) reached a deal to acquire Allergan for $63 billion. Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share, for a total of $188.24 per Allergan share. Meanwhile, top gainers in the sector included Allergan plc (NYSE: AGN), up 27%, and Xencor, Inc. (NASDAQ: XNCR), up 14%. |
24974.0 | 2019-06-25 00:00:00 UTC | AbbVie’s $63 Billion Mistake | ABBV | https://www.nasdaq.com/articles/abbvies-%2463-billion-mistake-2019-06-25 | nan | nan | AbbVie (NYSE: ABBV) announced this morning its intention to acquire Irish drugmaker Allergan (NYSE: AGN) in a stock-and-cash deal for $63 billion (or $188.24 per share). More specifically, AbbVie is offering Allergan shareholders $120.30 in cash and 0.866 AbbVie shares per share of Allergan they currently own.
AbbVie absolutely should pursue an acquisition -- more on that in a minute -- but buying Allergan (especially at a 45% premium to yesterday's closing share price) is a terrible move.
Here's why.
Why AbbVie needs a transaction
In a word: Humira. The world's best-selling drug in 2018, autoimmune drug Humira is now set to become a serious albatross for AbbVie, as patent expirations and biosimilar competition outside the U.S. chip away at its revenue. For reference, last quarter, Humira's international revenue dropped by 28% year over year, even while domestic revenue increased by 7%. U.S. revenue should be safe until around 2023, but AbbVie is staring down a scary patent cliff given that Humira accounted for 57% of the company's total adjusted revenue last quarter.
It's never fun to watch your top-line decline. Image source: Getty Images.
Put differently, AbbVie is now in danger of becoming a victim of its flagship drug's previous success.
AbbVie has been working hard to plug that hole with a variety of autoimmune drugs, hoping to shore up its market position as Humira's inevitable decline comes into more focus. AbbVie's autoimmune drug Skyrizi recently received FDA approval for psoriasis and is in phase 3 testing for a variety of other indications, including Crohn's disease, ulcerative colitis, and psoriatic arthritis. Rheumatoid arthritis drug upadacitinib is next up on deck, with an FDA review anticipated by third quarter. Analysts think these drugs might ultimately generate a combined $9.5 billion in annual peak sales -- a hefty chunk, to be sure, but far less than the $19.9 billion Humira achieved just last year.
To summarize: AbbVie doesn't have impressive growth prospects without an acquisition. It needs one to reinvigorate growth.
Why this is the wrong one
AbbVie needs to acquire a growing company with a huge pipeline stocked full of opportunity. Allergan is not that company.
In the most recent quarter, Allergan reported a 2% decline in revenue and a measly 1.3% growth in non-GAAP income per net share. Botox, Allergan's flagship drug, is slowly growing but faces an increasingly competitive landscape.
That wouldn't necessarily be a deal breaker if Allergan had massive opportunities in its pipeline. But it really doesn't.
That's not to say it doesn't have some opportunities -- it does -- but most don't look to be that big. For example, analysts think that Bimatoprost SR -- a proposed glaucoma drug Allergan hopes to see approved in 2020 -- might hit around $600 million in peak annual sales by 2026. For a company that did $15.8 billion in revenue last year, that's just not going to be fundamentally needle moving.
Allergan's largest potential drug is abicipar in wet age-related macular degeneration (or AMD), which could generate as much as $3 billion in peak annual sales per the company. Unfortunately, the drug has been shown to have some safety issues that may prevent it from competing effectively against other proposed treatments for wet AMD (like Eylea and brolucizumab from Regeneron and Novartis, respectively). More specifically, 8.9% of abicipar patients had intraocular inflammation, a rate double or more that reported for competitor drugs.
Plus, the March failure of its late-stage depression drug rapastinel in clinical trials deals further blows to its investment thesis.
And the price is too high
AbbVie is proposing to acquire Allergan for $63 billion, just north of a four-times multiple on its 2018 revenue. That valuation isn't unheard of in biotech, but usually that's because a company has huge growth opportunities it would struggle to fully execute on its own.
Allergan just isn't that company. (And for what it's worth, given that Allergan anticipates non-GAAP net income per share of $3.50 this year at the midpoint, AbbVie's $188.24-per-share proposed buyout price looks ridiculous along a price/earnings metric as well.) There's also no hint of a tax inversion like Pfizer attempted back in 2016, whereby the acquiring company would lower its tax rate by redomiciling in Ireland. And frankly, the $2 billion in anticipated combined synergies just isn't enough to make this attractive.
For what it's worth, I think Allergan shareholders should be thrilled. Even though the proposed buyout price is far below the $160 billion Pfizer was offering in 2016, given the less-than-stellar business performance at Allergan, I personally believe it's a good deal for them.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie has been working hard to plug that hole with a variety of autoimmune drugs, hoping to shore up its market position as Humira's inevitable decline comes into more focus. AbbVie's autoimmune drug Skyrizi recently received FDA approval for psoriasis and is in phase 3 testing for a variety of other indications, including Crohn's disease, ulcerative colitis, and psoriatic arthritis. AbbVie (NYSE: ABBV) announced this morning its intention to acquire Irish drugmaker Allergan (NYSE: AGN) in a stock-and-cash deal for $63 billion (or $188.24 per share). | More specifically, AbbVie is offering Allergan shareholders $120.30 in cash and 0.866 AbbVie shares per share of Allergan they currently own. (And for what it's worth, given that Allergan anticipates non-GAAP net income per share of $3.50 this year at the midpoint, AbbVie's $188.24-per-share proposed buyout price looks ridiculous along a price/earnings metric as well.) AbbVie (NYSE: ABBV) announced this morning its intention to acquire Irish drugmaker Allergan (NYSE: AGN) in a stock-and-cash deal for $63 billion (or $188.24 per share). | More specifically, AbbVie is offering Allergan shareholders $120.30 in cash and 0.866 AbbVie shares per share of Allergan they currently own. And the price is too high AbbVie is proposing to acquire Allergan for $63 billion, just north of a four-times multiple on its 2018 revenue. AbbVie (NYSE: ABBV) announced this morning its intention to acquire Irish drugmaker Allergan (NYSE: AGN) in a stock-and-cash deal for $63 billion (or $188.24 per share). | More specifically, AbbVie is offering Allergan shareholders $120.30 in cash and 0.866 AbbVie shares per share of Allergan they currently own. AbbVie (NYSE: ABBV) announced this morning its intention to acquire Irish drugmaker Allergan (NYSE: AGN) in a stock-and-cash deal for $63 billion (or $188.24 per share). AbbVie absolutely should pursue an acquisition -- more on that in a minute -- but buying Allergan (especially at a 45% premium to yesterday's closing share price) is a terrible move. |
24975.0 | 2019-06-24 00:00:00 UTC | 3 Big Stock Charts for Monday: Medtronic, Paychex and AbbVie | ABBV | https://www.nasdaq.com/articles/3-big-stock-charts-for-monday%3A-medtronic-paychex-and-abbvie-2019-06-24 | nan | nan | Traders were willing to buoy the market up to April’s record highs on Thursday of last week, but no more. The S&P 500 lost 0.13% of its value on Friday, leaving most market participants wondering if the surprisingly bullish June to date is nothing more than a mirage.
Source:
Altria Group (NYSE:) was arguably the biggest drag, off 4.5% on doubts that its much-lauded Juul e-cigarette brand would be able to secure the needed approval of the Food and Drug Administration when those products have to get the regulatory agency’s green lights. Pot stock Canopy Growth (NYSE:) was the bigger disappointment though. It fell more than 8% after investors had a chance to parse the details of Thursday afternoon’s quarterly earnings report. Sales of recreational marijuana fell, sequentially, when they’re supposed to continue rising on the wake of recent legalization in Canada.
Overstock (NASDAQ:) did more than its part to keep the market in the black, gaining 15% in response to reports that a couple of potential buyers were mulling the purchase of its e-commerce arm, which is being shed so the company can focus on cryptocurrency.
It just wasn’t enough.
Headed into Monday’s trading, however, it’s the stock charts of AbbVie (NYSE:), Paychex (NASDAQ:) and Medtronic (NYSE:) that merit the closest looks. Here’s why, and what to look for.
AbbVie (ABBV)
In late April it was noted that AbbVie was being , formed by a horizontal support line that had been holding up since October, and a falling resistance line that extended back to last May’s high. Although the odds favored a bullish outcome despite the trajectory, it was clear that anything could happen. Waiting on one side or the other to flinch was the key.
We’re still waiting. Although ABBV shares slipped below that key floor a couple of times in the meantime, the floor mostly remains intact. Some new falling resistance lines have since come into play, though the old one marked with a dashed blue line remains part of the equation. Either way, we’re getting closer to a decision, if only because there’s not much room left to meander between support and resistance.
It became noteworthy again on Friday just because of the amount of bullish volume that materialized.
Medtronic (MDT)
Back in March we as it was toying with the idea of a major break above a resistance line around $94, plotted in blue on the daily chart. That didn’t happen … at least not right away. As it turns out, MDT would have to peel back one more time and then try again. This month’s effort did the job.
The speed and distance of that move, however, has also spurred concerns that this usually volatile name is already due for some profit-taking again. When one takes a step back and looks at the longer-term view, however, it’s clear there’s room for a bit more upside until the upper boundary of a major trading range is encountered again.
On that same weekly chart we see a relatively new bullish MACD crossover in conjunction with a push up and off the lower edge of the long-term trading channel, suggesting this effort’s got some “oomph.”
Paychex (PAYX)
Finally, with nothing more than a quick glance at the Paychex chart, it appears the stock is still in an uptrend, though a slowing one. And, perhaps that benign outcome is what lies ahead. Only time will tell.
But, given the sheer scope of the rally since late last year, the slowdown is concerning simply because it may point to an outright reversal into a downtrend. The pump for such a pullback is certainly primed. The good news is, we know exactly where the make-or-break lines are, and what they are.
Zooming out to the weekly chart we can see just how unusual the past six months have been. Paychex should have rolled over in March somewhere around $79, at the upper boundary of an established trading range.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, , or follow him on Twitter, at @jbrumley.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Headed into Monday’s trading, however, it’s the stock charts of AbbVie (NYSE:), Paychex (NASDAQ:) and Medtronic (NYSE:) that merit the closest looks. AbbVie (ABBV) In late April it was noted that AbbVie was being , formed by a horizontal support line that had been holding up since October, and a falling resistance line that extended back to last May’s high. Although ABBV shares slipped below that key floor a couple of times in the meantime, the floor mostly remains intact. | Headed into Monday’s trading, however, it’s the stock charts of AbbVie (NYSE:), Paychex (NASDAQ:) and Medtronic (NYSE:) that merit the closest looks. AbbVie (ABBV) In late April it was noted that AbbVie was being , formed by a horizontal support line that had been holding up since October, and a falling resistance line that extended back to last May’s high. Although ABBV shares slipped below that key floor a couple of times in the meantime, the floor mostly remains intact. | Headed into Monday’s trading, however, it’s the stock charts of AbbVie (NYSE:), Paychex (NASDAQ:) and Medtronic (NYSE:) that merit the closest looks. AbbVie (ABBV) In late April it was noted that AbbVie was being , formed by a horizontal support line that had been holding up since October, and a falling resistance line that extended back to last May’s high. Although ABBV shares slipped below that key floor a couple of times in the meantime, the floor mostly remains intact. | Headed into Monday’s trading, however, it’s the stock charts of AbbVie (NYSE:), Paychex (NASDAQ:) and Medtronic (NYSE:) that merit the closest looks. AbbVie (ABBV) In late April it was noted that AbbVie was being , formed by a horizontal support line that had been holding up since October, and a falling resistance line that extended back to last May’s high. Although ABBV shares slipped below that key floor a couple of times in the meantime, the floor mostly remains intact. |
24976.0 | 2019-06-21 00:00:00 UTC | Daily Dividend Report: WASH, MDT, CL, ABBV, UDR | ABBV | https://www.nasdaq.com/articles/daily-dividend-report%3A-wash-mdt-cl-abbv-udr-2019-06-21 | nan | nan | The Board of Directors of Washington Trust Bancorp, today declared a quarterly dividend of $0.51 cents per share for the quarter ending June 30, 2019. The declaration represents a $0.04 per share increase over the most recent quarterly dividend rate. The dividend will be paid July 12, 2019 to shareholders of record on July 1, 2019.
The board of directors of Medtronic today approved an 8 percent increase in its quarterly cash dividend, raising the quarterly amount to $0.54 per ordinary share. This would translate into an annual amount of $2.16 per ordinary share, or a dividend per share payout ratio of 41 percent of prior fiscal year non-GAAP diluted earnings per share (EPS). Today's announcement marks the 42nd consecutive year of an increase in the dividend payment for Medtronic, a constituent of the S&P 500 Dividend Aristocrats index. Including today's increase, Medtronic's dividend per share has grown by 77 percent over the past 5 years and has grown at a 17 percent compounded annual growth rate over the past 42 years. The dividend is payable on July 25, 2019, to shareholders of record at the close of business on July 8, 2019.
The Board of Directors of Colgate-Palmolive today declared a quarterly cash dividend of $0.43 per common share, payable on August 15, 2019, to shareholders of record on July 18, 2019. The Company has paid uninterrupted dividends on its common stock since 1895.
The board of directors of AbbVie declared a quarterly cash dividend of $1.07 per share. The cash dividend is payable August 15, 2019 to stockholders of record at the close of business on July 15, 2019. Since the company's inception in 2013, AbbVie has increased its dividend by 168 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
UDR, a leading multifamily real estate investment trust, today announced that its Board of Directors declared a regular quarterly dividend on its common stock for the second quarter of 2019 in the amount of $0.3425 per share, payable in cash, on July 31, 2019 to UDR common stock shareholders of record as of July 10, 2019. The July 31st dividend will be the 187th consecutive quarterly dividend paid by the Company on its common stock.
VIDEO: Daily Dividend Report: WASH, MDT, CL, ABBV, UDR
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The board of directors of AbbVie declared a quarterly cash dividend of $1.07 per share. Since the company's inception in 2013, AbbVie has increased its dividend by 168 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years. | The board of directors of AbbVie declared a quarterly cash dividend of $1.07 per share. Since the company's inception in 2013, AbbVie has increased its dividend by 168 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years. | The board of directors of AbbVie declared a quarterly cash dividend of $1.07 per share. Since the company's inception in 2013, AbbVie has increased its dividend by 168 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years. | The board of directors of AbbVie declared a quarterly cash dividend of $1.07 per share. Since the company's inception in 2013, AbbVie has increased its dividend by 168 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years. |
24977.0 | 2019-06-20 00:00:00 UTC | 3 Drugs Under FDA Review With Blockbuster Potential | ABBV | https://www.nasdaq.com/articles/3-drugs-under-fda-review-with-blockbuster-potential-2019-06-20 | nan | nan | Being the first drugmaker to develop a therapy attacking a new target in cells can result in blockbuster sales. But other companies can wrestle that market share away from the first-in-class drugs with follow-on drugs going after the same targets if the new drugs can provide better safety, efficacy, or dosing than the current offerings.
Here are three follow-on drugs that have proven their worth in clinical trials and are waiting for FDA approvals before the companies can start the competition with the current standard of care.
Source: Company press releases. *Estimated based on announcement of filing the marketing application and the FDA accepting it.
Image source: Getty Images.
JAK of all trades
Upadacitinib, which was licensed from Galapagos (NASDAQ: GLPG), is a Janus kinase 1 (JAK1) inhibitor that AbbVie is developing for a range of diseases in which an overactive immune system leads to inflammation. JAK1 and its siblings, JAK2 and JAK3, are signal transducers that work in the immune cell stimulation pathway. Inhibiting the pathway dampens the immune reaction that causes diseases such as rheumatoid arthritis, Crohn's disease, ulcerative colitis, atopic dermatitis, and psoriatic arthritis.
Pfizer's Xeljanz, which targets JAK3, brought in $423 million in sales in the first quarter, a jump of 34% as the drug moves beyond rheumatoid arthritis and into psoriatic arthritis and ulcerative colitis, which it was recently approved to treat.
While AbbVie has some work to do to take away market share from Pfizer and Eli Lilly's (NYSE: LLY) JAK inhibitor Olumiant -- and additional upcoming competition from Gilead Sciences' (NASDAQ: GILD) filgotinib -- there's some evidence that upadacitinib might work better than Xeljanz based on their respective studies comparing the drugs to Humira. AbbVie also has a dominant position in the rheumatoid arthritis space since it sells Humira, and it may be able to get a preferred position on insurers' lists of covered drugs.
Image source: Getty Images.
Seeing better efficacy
Brolucizumab targets vascular endothelial growth factor (VEGF), which promotes the blood vessel growth in patients with wet macular degeneration in the eye. The drug will compete directly with Regeneron Pharmaceuticals' (NASDAQ: REGN) megablockbuster Eylea, which also targets VEGF and brought in $1.7 billion in sales in the first quarter.
In two head-to-head studies, brolucizumab was deemed noninferior to Eylea, with the drugs improving patients' ability to see letters on an eye chart at about the same levels. But brolucizumab beat Eylea in measurements of disease activity with 23.5% and 21.9% of patients having disease activity at the end of the studies compared to 33.5% and 31.4% of patients taking Eylea having disease activity in the two respective late-stage clinical trials.
Brolucizumab may also have some dosing benefit because the clinical trials compared 12-week dosing of brolucizumab with 8-week dosing of Eylea. Patients obviously would prefer to have fewer injections into their eyes, and that goes double for older patients who may need assistance getting to the doctor. Eylea has since been approved by the FDA for 12-week dosing, although the 8-week dosing may still provide better results, leading doctors to prefer brolucizumab's 12-week scheme.
Second time's a charm
This is ozanimod's second time in front of the FDA, although the first stint was fairly short-lived. After submitting the marketing application, Celgene received a refuse-to-file letter from the FDA because it hadn't fully characterized a metabolite -- breakdown product -- of the drug. Celgene ran the required studies, and the FDA accepted the marketing application earlier this month. Nevertheless, the regulatory history of the drug makes an approval less certain than the other two drugs.
Ozanimod modulates sphingosine 1-phosphate (S1P) receptor 1 and 5 on immune cells, which attack myelin, the protective sheath that covers nerve fibers in multiple sclerosis patients. By modulating the activity of the immune cells, ozanimod and other S1P modulators, such as Novartis' Gilenya, can slow the disease progression.
Celgene, which is in the process of being purchased by Bristol-Myers Squibb (NYSE: BMY), has set up ozanimod as a safer version of Gilenya, which racked up $766 million in sales in the first quarter. For example, the first dose of Gilenya has to be monitored in a doctor's office because it can slow the heart rate in some patients, but ozanimod doesn't appear to have the heart issue. While ozanimod's activity may not be as strong as Gilenya's, doctors are likely to prescribe the safer drug even if it means giving up some disease-slowing activity.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | JAK of all trades Upadacitinib, which was licensed from Galapagos (NASDAQ: GLPG), is a Janus kinase 1 (JAK1) inhibitor that AbbVie is developing for a range of diseases in which an overactive immune system leads to inflammation. While AbbVie has some work to do to take away market share from Pfizer and Eli Lilly's (NYSE: LLY) JAK inhibitor Olumiant -- and additional upcoming competition from Gilead Sciences' (NASDAQ: GILD) filgotinib -- there's some evidence that upadacitinib might work better than Xeljanz based on their respective studies comparing the drugs to Humira. AbbVie also has a dominant position in the rheumatoid arthritis space since it sells Humira, and it may be able to get a preferred position on insurers' lists of covered drugs. | While AbbVie has some work to do to take away market share from Pfizer and Eli Lilly's (NYSE: LLY) JAK inhibitor Olumiant -- and additional upcoming competition from Gilead Sciences' (NASDAQ: GILD) filgotinib -- there's some evidence that upadacitinib might work better than Xeljanz based on their respective studies comparing the drugs to Humira. JAK of all trades Upadacitinib, which was licensed from Galapagos (NASDAQ: GLPG), is a Janus kinase 1 (JAK1) inhibitor that AbbVie is developing for a range of diseases in which an overactive immune system leads to inflammation. AbbVie also has a dominant position in the rheumatoid arthritis space since it sells Humira, and it may be able to get a preferred position on insurers' lists of covered drugs. | While AbbVie has some work to do to take away market share from Pfizer and Eli Lilly's (NYSE: LLY) JAK inhibitor Olumiant -- and additional upcoming competition from Gilead Sciences' (NASDAQ: GILD) filgotinib -- there's some evidence that upadacitinib might work better than Xeljanz based on their respective studies comparing the drugs to Humira. JAK of all trades Upadacitinib, which was licensed from Galapagos (NASDAQ: GLPG), is a Janus kinase 1 (JAK1) inhibitor that AbbVie is developing for a range of diseases in which an overactive immune system leads to inflammation. AbbVie also has a dominant position in the rheumatoid arthritis space since it sells Humira, and it may be able to get a preferred position on insurers' lists of covered drugs. | JAK of all trades Upadacitinib, which was licensed from Galapagos (NASDAQ: GLPG), is a Janus kinase 1 (JAK1) inhibitor that AbbVie is developing for a range of diseases in which an overactive immune system leads to inflammation. While AbbVie has some work to do to take away market share from Pfizer and Eli Lilly's (NYSE: LLY) JAK inhibitor Olumiant -- and additional upcoming competition from Gilead Sciences' (NASDAQ: GILD) filgotinib -- there's some evidence that upadacitinib might work better than Xeljanz based on their respective studies comparing the drugs to Humira. AbbVie also has a dominant position in the rheumatoid arthritis space since it sells Humira, and it may be able to get a preferred position on insurers' lists of covered drugs. |
24978.0 | 2019-06-19 00:00:00 UTC | Is Abbott Laboratories a Buy? | ABBV | https://www.nasdaq.com/articles/is-abbott-laboratories-a-buy-2019-06-19 | nan | nan | In the world of investing, sometimes boring is good. Diversified healthcare company Abbott Laboratories (NYSE: ABT) has been rewarding its shareholders with solid growth without the ups and downs that pharmaceutical stocks often deliver. Even though the stock is hitting new highs, is it a buy now?
Abbott Labs split into two companies at the beginning of 2013 when it spun off its research-based pharmaceutical business, which became AbbVie. The rationale for the division was that AbbVie's business would be high-risk and high-reward with high dividends, while Abbott Labs would be a diversified healthcare business not subject to the risks of bringing new drugs to market. The post-spinoff Abbott is a balanced company with four businesses that are all contributing well to the company's growth.
Image source: Getty Images.
Four segments with steady underlying growth
The company's largest segment at 37% of 2018 revenue is medical devices, bolstered by the 2017 acquisition of St. Jude Medical and proving to be the company's strongest source of growth. Abbott Labs' broad portfolio includes pacemakers, implantable heart monitors, mini heart pumps, electrostimulators for the brain and spinal cord, stents, and blood glucose monitors. The segment produced 2018 sales growth of 9.1% on an organic basis -- in other words, excluding the effects of currency, acquisitions, and divestitures.
The diagnostics business delivered 25% of the company's revenue and had 6.7% organic growth. The acquisition of Alere in late 2017 added point-of-care diagnostic instruments, which provide results in minutes, to an existing product forming the core equipment of clinical laboratories.
Providing about 24% of revenue is the company's nutrition business. These are products like Similac infant formula, Ensure nutrition drink, and specialized products to sustain patients with conditions such as diabetes or who are recovering from surgery. Growth in this segment picked up last year thanks to strong sales in Asia and Latin America, with an organic sales increase of 5.2%.
Not all of Abbott's pharmaceutical business went with AbbVie in the split. The established pharmaceuticals business focuses on selling "branded generics" in emerging markets, where the demand for healthcare is expanding as the standard of living increases. This segment was 15% of Abbott's 2018 revenue with a healthy 7% organic growth.
What stands out about Abbott's business segments are the diversification and the balance. No one segment dominates the results, and there's no weak link. All businesses are contributing to growth and profits. Operating margins are consistent between the groups, ranging from 20% in established pharmaceuticals to 32% in medical devices.
Recent results
Put all those businesses together and you get a company that delivers consistent, although perhaps unspectacular, growth. In the most recent quarter, sales grew a muted 2% to $7.54 billion, held back by currency headwinds due to the fact that 63% of sales comes from outside the U.S. Organic sales growth, excluding currency exchange and a discontinued business, was a healthy 7.1%. Adjusted earnings per share, which include the effect of exchange rates, grew 6.8% to $0.63.
Looking forward, Abbott expects organic sales growth in 2019 of between 6.5% and 7.5% and adjusted earnings per share of between $3.15 and $3.25, which equates to 11% profit growth at the midpoint.
Growth prospects
Three of Abbott's product lines are boosting the company's growth now. FreeStyle Libre is the company's continuous glucose monitor that uses a small sensor about the size of two stacked quarters that is applied to the back of the upper arm, a big improvement over pricking a finger to draw blood. Worldwide sales last quarter grew over 40% to $380 million with a million and a half users, and the company is expanding its manufacturing capacity to meet demand. There's a second generation of the device being reviewed by the FDA and a third under development. Ultimately, sales of FreeStyle Libre could reach $5 billion annually.
Abbott's Alinity is a family of integrated, high-throughput systems for core laboratory diagnostics for blood chemistry and composition, cancer, drug use, and infectious diseases. The system is selling well in Europe and just rolling out in the U.S., with the full range of capability available by the end of the year. The core laboratory business had 10% sales growth last quarter, but that should expand further as Alinity gets traction, and the product line will have a long runway of growth.
Alinity CI-Series. Image source: Abbott Laboratories.
The structural heart segment had 15% organic growth in Q1, largely because of MitraClip, an implant to repair leaky heart valves. That product is still in the early stages of adoption as well, with Abbott getting approval for new indications and expanding its sales force and clinical specialists to address an unmet need in minimally invasive mitral valve repair.
Abbott has a balance sheet and cash flow that would support growth through acquisitions. But when questioned about merger opportunities in recent quarters, Abbott officials have been clear that they haven't seen any appealing opportunities. Either valuations are too high or candidates don't fit their criteria, so the company has said flatly that acquisitions are not a high priority now. Instead, Abbott is focusing on retiring debt and improving organic growth, a direction that risk-averse investors should appreciate.
Dividends
Dividend yield isn't a big attraction for the stock, but dividend growth is a plus. Abbott pays a quarterly dividend of $0.32, which works out to an annual yield of 1.5%, not out of line with peers in the medical device industry. But Abbott is also a Dividend Aristocrat, having raised its payout for 47 consecutive years. Last year it boosted the dividend by a healthy 14%.
Risks and uncertainties
The attraction of Abbott stock for conservative investors is the steadiness and predictability of its business. Medical devices undergo clinical trials and are subject to FDA approvals, so there is always the risk of a failed trial or rejection of an application, but the stakes for each approval are much less than for a drug that's cost billions to develop. Abbott stock isn't likely to make big moves -- in either direction -- based on single events in its pipeline development.
The company is subject to competitive pressure, but that's where the company's balance and diversification are assets. With four consistently profitable segments of comparable size that are all contributing to growth, no one competitor can disrupt its business.
As with other companies in this industry, Abbott's business is mostly unaffected by economic cycles, making the stock attractive as a "defensive" holding.
Performance and valuation
Probably the biggest risk for Abbott shareholders is not a company-specific event, but that the entire industry gets marked down in a bear market or by worries over political threats to the healthcare industry. Abbott stock is vulnerable due to its relatively high valuation. Abbott sells for 29 times adjusted 2018 earnings and 26 times the midpoint of its guidance for adjusted earnings in 2019. That's quite pricey for a business that's delivering growth in the low double digits, and it's on the high end of the stock's historic range
Still, the market likes predictability and rewards companies that deliver it. The stock is up 16% this year after gaining 29% in 2018.
Expensive, but for a reason
Abbott Labs offers an attractive combination of predictable growth with lower risk than you'd typically find in the healthcare sector. The main reason an investor might hesitate to jump in is the valuation. The market has recognized the strengths of the business and has been willing to pay up for the shares. But the longer your investment time horizon is, the less relevant today's valuation will be. There are better values in healthcare, but for long-term investors, Abbott Labs is still a buy.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Abbott Labs split into two companies at the beginning of 2013 when it spun off its research-based pharmaceutical business, which became AbbVie. The rationale for the division was that AbbVie's business would be high-risk and high-reward with high dividends, while Abbott Labs would be a diversified healthcare business not subject to the risks of bringing new drugs to market. Not all of Abbott's pharmaceutical business went with AbbVie in the split. | The rationale for the division was that AbbVie's business would be high-risk and high-reward with high dividends, while Abbott Labs would be a diversified healthcare business not subject to the risks of bringing new drugs to market. Abbott Labs split into two companies at the beginning of 2013 when it spun off its research-based pharmaceutical business, which became AbbVie. Not all of Abbott's pharmaceutical business went with AbbVie in the split. | Abbott Labs split into two companies at the beginning of 2013 when it spun off its research-based pharmaceutical business, which became AbbVie. The rationale for the division was that AbbVie's business would be high-risk and high-reward with high dividends, while Abbott Labs would be a diversified healthcare business not subject to the risks of bringing new drugs to market. Not all of Abbott's pharmaceutical business went with AbbVie in the split. | The rationale for the division was that AbbVie's business would be high-risk and high-reward with high dividends, while Abbott Labs would be a diversified healthcare business not subject to the risks of bringing new drugs to market. Abbott Labs split into two companies at the beginning of 2013 when it spun off its research-based pharmaceutical business, which became AbbVie. Not all of Abbott's pharmaceutical business went with AbbVie in the split. |
24979.0 | 2019-06-17 00:00:00 UTC | Notable ETF Inflow Detected - DGRO, VZ, ABBV, MRK | ABBV | https://www.nasdaq.com/articles/notable-etf-inflow-detected-dgro-vz-abbv-mrk-2019-06-17 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $70.2 million dollar inflow -- that's a 0.9% increase week over week in outstanding units (from 197,900,000 to 199,750,000). Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is down about 1.7%, AbbVie Inc (Symbol: ABBV) is up about 0.2%, and Merck & Co Inc (Symbol: MRK) is up by about 0.4%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average:
Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.68. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is down about 1.7%, AbbVie Inc (Symbol: ABBV) is up about 0.2%, and Merck & Co Inc (Symbol: MRK) is up by about 0.4%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.68. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is down about 1.7%, AbbVie Inc (Symbol: ABBV) is up about 0.2%, and Merck & Co Inc (Symbol: MRK) is up by about 0.4%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.68. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is down about 1.7%, AbbVie Inc (Symbol: ABBV) is up about 0.2%, and Merck & Co Inc (Symbol: MRK) is up by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $70.2 million dollar inflow -- that's a 0.9% increase week over week in outstanding units (from 197,900,000 to 199,750,000). For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.68. | Among the largest underlying components of DGRO, in trading today Verizon Communications Inc (Symbol: VZ) is down about 1.7%, AbbVie Inc (Symbol: ABBV) is up about 0.2%, and Merck & Co Inc (Symbol: MRK) is up by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $70.2 million dollar inflow -- that's a 0.9% increase week over week in outstanding units (from 197,900,000 to 199,750,000). For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.68. |
24980.0 | 2019-06-17 00:00:00 UTC | Why AbbVie Is a Retiree's Dream Stock | ABBV | https://www.nasdaq.com/articles/why-abbvie-is-a-retirees-dream-stock-2019-06-17 | nan | nan | What does every retired investor want in a stock? You'd definitely expect a strong dividend to be ranked close to the top of the list. Retired investors would also want to make sure that the company was in good shape to keep those dividends flowing, with dividend growth a nice bonus. And it wouldn't hurt for the stock to have decent growth prospects.
Several stocks check off all these items. But one stock that I think especially stands out is AbbVie (NYSE: ABBV). Here's why this big pharma appears to be a retiree's dream stock.
Image source: Getty Images.
A fantastic -- and growing -- dividend
Let's start with AbbVie's dividend. It currently yields nearly 5.6%. That's not only one of the highest yields in healthcare, but it's also one of the highest dividend yields in the S&P 500.
AbbVie's track record when it comes to dividends is impeccable. The company is included in the elite group of stocks known as Dividend Aristocrats. Including the time that it was still part of its parent company, Abbott Labs (NYSE: ABT), AbbVie has increased its dividend for 47 consecutive years.
Abbott Labs spun off AbbVie as a separate entity in 2013. Since then, AbbVie has boosted its dividend payout by a whopping 168%.
The company appears to be in a strong position to keep the dividends coming. AbbVie currently uses a little over half of its free cash flow to fund the dividend program.
Based on AbbVie's current dividend level and its history of dividend growth, I fully expect that the dividend will double within the next seven years. This would mean that investors could be looking realistically at annual dividend payments that are at least 10% of their initial investments in the not-too-distant future. Any retiree would love to have an effective dividend yield of 10% or more.
Multiple growth opportunities
A lot of the focus for AbbVie right now is on the declining sales for Humira. The company's best-selling drug now faces competition from biosimilars in Europe and will see biosimilar rivals in the U.S. beginning in 2023. But even though Humira generates 57% of AbbVie's total revenue, the company isn't worried about the falling sales for its top drug.
AbbVie has known for years that the day would come when it couldn't count on Humira to deliver growth. It has been preparing by building a product lineup and pipeline that could take it into a post-Humira world.
One key step that AbbVie made was to acquire Pharmacyclics in 2015. The deal gave AbbVie two powerful cancer drugs, Imbruvica and Venclexta. The company thinks that these two drugs will together generate more than $9 billion of risk-adjusted annual sales growth by 2025.
AbbVie has also partnered with other companies to boost its growth prospects. It teamed up with Neurocrine Biosciences (NASDAQ: NBIX) to develop and market Orilissa. The drug is currently approved for the management of endometriosis pain. AbbVie hopes to pick up another approval for the drug in treating uterine fibroids. If all goes as expected, Orilissa could contribute an additional $2 billion in annual sales for AbbVie in a few years.
The biggest near-term growth opportunities for AbbVie, though, are with its new immunology drugs. Skyrizi won FDA approval earlier this year for treating plaque psoriasis. AbbVie expects to win FDA approval for upadacitinib in the third quarter of 2019 for treating rheumatoid arthritis. Market research company EvaluatePharma ranked the drugs No. 3 and No. 2, respectively, in its analysis of the top new drug launches of this year. AbbVie thinks the two drugs could together rake in $10 billion annually by 2025.
Risks offset by an attractive valuation
AbbVie faces some risks. It's possible that the company could experience pipeline setbacks. Major healthcare system changes in the U.S. could restrict the ability for AbbVie to set its drug prices at the levels it prefers.
However, I think that AbbVie's valuation largely offsets these risks. The big pharma stock trades at less than 8.4 times expected earnings. That's lower than the forward earnings multiples of more than 440 other stocks in the S&P 500.
AbbVie provides a strong dividend, solid growth prospects, and an attractive valuation. That's a combination that should appeal to retired investors -- and investors who are a long way from retirement, too.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Including the time that it was still part of its parent company, Abbott Labs (NYSE: ABT), AbbVie has increased its dividend for 47 consecutive years. But even though Humira generates 57% of AbbVie's total revenue, the company isn't worried about the falling sales for its top drug. Major healthcare system changes in the U.S. could restrict the ability for AbbVie to set its drug prices at the levels it prefers. | Including the time that it was still part of its parent company, Abbott Labs (NYSE: ABT), AbbVie has increased its dividend for 47 consecutive years. Risks offset by an attractive valuation AbbVie faces some risks. AbbVie provides a strong dividend, solid growth prospects, and an attractive valuation. | A fantastic -- and growing -- dividend Let's start with AbbVie's dividend. Based on AbbVie's current dividend level and its history of dividend growth, I fully expect that the dividend will double within the next seven years. 10 stocks we like better than AbbVie When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. | Including the time that it was still part of its parent company, Abbott Labs (NYSE: ABT), AbbVie has increased its dividend for 47 consecutive years. Based on AbbVie's current dividend level and its history of dividend growth, I fully expect that the dividend will double within the next seven years. But one stock that I think especially stands out is AbbVie (NYSE: ABBV). |
24981.0 | 2019-06-16 00:00:00 UTC | 3 Cheap Drug Stocks You Can Buy Right Now | ABBV | https://www.nasdaq.com/articles/3-cheap-drug-stocks-you-can-buy-right-now-2019-06-16 | nan | nan | Sure, the bull market is now more than 10 years old. Stock valuations, in general, have risen to lofty levels. Some investors might be tempted to sit on the sidelines until better bargains can be found.
The reality, though, is that there are currently quite a few stocks that look like bargains. Many pharma stocks haven't kept pace with the broader market so far in 2019. And some of them appear to be priced attractively.
Three cheap drug stocks that you can buy right now are AbbVie (NYSE: ABBV), Alexion Pharmaceuticals (NASDAQ: ALXN), and Vertex Pharmaceuticals (NASDAQ: VRTX). Here's what makes these stocks stand out.
Image source: Getty Images.
1. AbbVie
AbbVie's shares trade at only 8.3 times expected earnings. The stock's price-to-earnings-to-growth (PEG) ratio is a relatively low 1.27. AbbVie claims the No. 1 best-selling drug in the world with Humira. It has several other rising stars in its lineup, too. So why is the drug stock so cheap?
Investors are anxious about declining sales for Humira now that the drug faces biosimilar competition in Europe. Biosimilars to Humira will enter the U.S. market in 2023. With Humira generating 57% of AbbVie's total revenue, there are concerns about whether the company will be able to replace the declining sales from its top drug.
But AbbVie is in better shape than you might think. Sales are soaring for the company's cancer drugs Imbruvica and Venclexta. AbbVie projects that Orilissa will continue to gain momentum in treating endometriosis and pick up an additional indication in treating uterine fibroids, with peak annual sales likely to come in around $2 billion. Recently approved immunology drug Skyrizi is also expected to generate peak sales of at least $2 billion.
AbbVie's pipeline also includes several strong candidates, with upadacitinib especially standing out. The drug beat Humira in efficacy in late-stage clinical studies for the treatment of rheumatoid arthritis. Food and Drug Administration approval for upadacitinib is expected in the next few months. AbbVie thinks the drug could eventually rake in around $6.5 billion annually.
2. Alexion Pharmaceuticals
Alexion Pharmaceuticals also appears to be valued attractively, with a forward earnings multiple of 11.3. The biotech's PEG ratio of 0.84 makes it even more appealing.
Orphan-drug Soliris has fueled Alexion's growth throughout the company's history and still contributes over 80% of total revenue. With the drug getting kind of long in the tooth, you might wonder if the biotech's sales could be in jeopardy. They aren't for a couple of key reasons.
First, Alexion snagged additional patents for Soliris in 2017 that extend protection for the drug through 2027. Also, the company hopes to pick up another indication for Soliris in treating neuromyelitis optica spectrum disorder (NMOSD) with an FDA decision expected later this month.
Second, Alexion recently launched a successor to Soliris. Market research company EvaluatePharma ranked Ultomiris as the top new drug launch of 2019. Ultomiris is currently approved for treating paroxysmal nocturnal hemoglobinuria (PNH). Alexion also hopes to secure approval for its new drug in treating atypical hemolytic uremic syndrome (aHUS). Both PNH and aHUS are key indications for Soliris now. Ultomiris is expected to generate annual sales of close to $3.5 billion by 2024.
3. Vertex Pharmaceuticals
You might scratch your head that Vertex made a list of cheap drug stocks. After all, the biotech stock trades at 28 times expected earnings. But Vertex's tremendous growth prospects give the stock a low PEG ratio of 0.85. If analysts' growth projections pan out, Vertex's current price tag should look like a bargain in hindsight a few years from now.
The good news is that Vertex really should deliver impressive growth for years to come. The biotech's three approved drugs Kalydeco, Orkambi, and Symdeko currently enjoy a monopoly in treating the underlying cause of cystic fibrosis (CF). These drugs treat around 18,000 patients now, but the addressable patient population is 39,000. In addition, Vertex hopes to expand the labels for the drugs to treat younger patients, which could expand the addressable patient population to 44,000.
Just maximizing the potential for its current three drugs gives Vertex a great growth opportunity. But Vertex also has a triple-drug CF combo that will soon be submitted for approval. EvaluatePharma views this combo as the most valuable pipeline asset in the industry right now and thinks it will make around $4.3 billion by 2024 -- more than all three of Vertex's current drugs generate now combined. This triple-drug combo should also enable Vertex to treat another 24,000 CF patients.
Vertex plans to move into indications beyond CF, too. The biotech has a promising pain drug, VX-150, that looked good in a phase 2 study. Its pipeline includes a candidate in phase 1 testing for treating rare genetic disease alpha-1 antitrypsin deficiency (AATD). Vertex also recently moved into the arena for treating Duchenne muscular dystrophy (DMD) and Myotonic Dystrophy Type 1 (DM1) by acquiring Exonics Therapeutics and expanded its partnership with CRISPR Therapeutics.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Three cheap drug stocks that you can buy right now are AbbVie (NYSE: ABBV), Alexion Pharmaceuticals (NASDAQ: ALXN), and Vertex Pharmaceuticals (NASDAQ: VRTX). AbbVie AbbVie's shares trade at only 8.3 times expected earnings. AbbVie claims the No. | Three cheap drug stocks that you can buy right now are AbbVie (NYSE: ABBV), Alexion Pharmaceuticals (NASDAQ: ALXN), and Vertex Pharmaceuticals (NASDAQ: VRTX). AbbVie AbbVie's shares trade at only 8.3 times expected earnings. AbbVie claims the No. | Three cheap drug stocks that you can buy right now are AbbVie (NYSE: ABBV), Alexion Pharmaceuticals (NASDAQ: ALXN), and Vertex Pharmaceuticals (NASDAQ: VRTX). See the 10 stocks *Stock Advisor returns as of March 1, 2019 Keith Speights owns shares of AbbVie and Vertex Pharmaceuticals. AbbVie AbbVie's shares trade at only 8.3 times expected earnings. | With Humira generating 57% of AbbVie's total revenue, there are concerns about whether the company will be able to replace the declining sales from its top drug. Three cheap drug stocks that you can buy right now are AbbVie (NYSE: ABBV), Alexion Pharmaceuticals (NASDAQ: ALXN), and Vertex Pharmaceuticals (NASDAQ: VRTX). AbbVie AbbVie's shares trade at only 8.3 times expected earnings. |
24982.0 | 2019-06-15 00:00:00 UTC | 5 Biggest Blockbuster Drugs of the Future | ABBV | https://www.nasdaq.com/articles/5-biggest-blockbuster-drugs-of-the-future-2019-06-15 | nan | nan | Things change relatively quickly in the pharmaceutical world. Even a best-selling drug can only hold its top spot for a while before its sales fade and a newer treatment takes its place.
EvaluatePharma's recently released World Preview 2019, Outlook to 2024 report underscores this point. The market research company projected sales for all drugs on the market, as well as those that are expected to launch over the next few years, to forecast which will be the best-selling drugs in 2024. Three of 2018's five biggest sellers are expected to fall off the list in 2024 -- and two of them aren't even expected to make the top 10.
Let's review the five biggest blockbuster drugs of 2024, according to EvaluatePharma's projections, and the pharmaceutical stocks that are most likely to be winners for investors because of those drugs' successes.
Image source: Getty Images.
1. Keytruda
Merck's (NYSE: MRK) Keytruda is one of the fastest-rising drugs on the market. The cancer immunotherapy was first launched in 2014. Last year, Keytruda ranked as the third-best-selling drug in the world, with growing sales fueling Merck's impressive stock gain of close to 36% in 2018.
By 2024, EvaluatePharma forecasts that Keytruda will become the world's top-selling drug with annual sales of $17 billion -- more than double the $7.2 billion in revenue it generated last year. Underlying that is the expectation that the drug will be approved for more indications. Merck made pretty good progress on that score in 2018, when the blockbuster cancer drug picked up two new indications.
2. Humira
Humira's sales of $20.5 billion in 2018 made it the best-selling drug in the world, but its reign will come to an end soon. AbbVie (NYSE: ABBV) faces biosimilar competition for the enormously successful immunology drug in Europe already, and will battle biosimilars in the U.S. beginning in 2023.
But Humira will keep making plenty of money for AbbVie for a while longer. EvaluatePharma projects it will have annual sales of $12.4 billion in 2024, good enough to hold on to the second-place spot among best-selling drugs.
3. Eliquis
Bristol-Myers Squibb (NYSE: BMY) landed two drugs in EvaluatePharma's top five list of blockbuster drugs of the future last year. Anticoagulant Eliquis was the lower-ranked of the two drugs then, coming in at No. 5. However, strong sales momentum for Eliquis have led the analysts to revise their outlooks, and this time around, it claims the No. 3 spot.
EvaluatePharma now thinks that Eliquis will generate annual revenue of more than $12 billion in 2024 -- almost twice the $6.4 billion it made last year. Bristol-Myers Squibb doesn't keep all of that money to itself, though: The company partners with Pfizer (NYSE: PFE) in marketing Eliquis.
4. Opdivo
In 2018, Bristol-Myers Squibb's Opdivo held the No. 3 spot on the five-year forecast of best-sellers. This year, the company's leading immunotherapy slipped a spot to No. 4.
Although Keytruda appears to be on track to be the bigger winner in the battle between the top two immunotherapies, Opdivo is still on course to rake in $11.3 billion annually by 2024, up from $7.6 billion last year.
5. Imbruvica
Bristol-Myers Squibb isn't the only big pharma company with two drugs in 2024's top five list. AbbVie partners with Johnson & Johnson (NYSE: JNJ) in marketing cancer drug Imbruvica, which moves up from No. 6 last year to take the fifth spot on the ranking of future top blockbuster drugs this year.
EvaluatePharma projects that Imbruvica will make $9.5 billion in sales in 2024. That's more than twice the nearly $4.5 billion that the drug pulled in last year. That would also make Imbruvica the top-five drug with the second-fastest sales growth over the next few years, ranking behind only Keytruda.
The stocks most likely to soar
You might think that Merck would be the stock most likely to reward investors, based on these forecasts. As Keytruda rises to the top of the world, Merck certainly will see its sales increase nicely. However, the company also has some baggage, due to the declining sales of several of its older drugs.
On the other hand, Humira losing its top spot might suggest that among these pharmaceutical companies, AbbVie could be in the most trouble. Yet it has other drugs that have strong momentum -- Imbruvica among them -- and promising candidates in the pipeline that I think should help the stock perform solidly over the next five years.
My hunch is that Bristol-Myers Squibb might be the biggest winner of them all. This view isn't just based on the idea that the company's likely to claim two of the world's top-selling drugs in 2024. I think that its pending acquisition of Celgene (NASDAQ: CELG) will be a game-changer for the company. Celgene's pipeline is chock-full of candidates with blockbuster potential that I suspect will turbocharge growth for Bristol-Myers Squibb well beyond 2024.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (NYSE: ABBV) faces biosimilar competition for the enormously successful immunology drug in Europe already, and will battle biosimilars in the U.S. beginning in 2023. But Humira will keep making plenty of money for AbbVie for a while longer. AbbVie partners with Johnson & Johnson (NYSE: JNJ) in marketing cancer drug Imbruvica, which moves up from No. | AbbVie partners with Johnson & Johnson (NYSE: JNJ) in marketing cancer drug Imbruvica, which moves up from No. AbbVie (NYSE: ABBV) faces biosimilar competition for the enormously successful immunology drug in Europe already, and will battle biosimilars in the U.S. beginning in 2023. But Humira will keep making plenty of money for AbbVie for a while longer. | AbbVie (NYSE: ABBV) faces biosimilar competition for the enormously successful immunology drug in Europe already, and will battle biosimilars in the U.S. beginning in 2023. But Humira will keep making plenty of money for AbbVie for a while longer. AbbVie partners with Johnson & Johnson (NYSE: JNJ) in marketing cancer drug Imbruvica, which moves up from No. | AbbVie (NYSE: ABBV) faces biosimilar competition for the enormously successful immunology drug in Europe already, and will battle biosimilars in the U.S. beginning in 2023. But Humira will keep making plenty of money for AbbVie for a while longer. AbbVie partners with Johnson & Johnson (NYSE: JNJ) in marketing cancer drug Imbruvica, which moves up from No. |
24983.0 | 2019-06-11 00:00:00 UTC | 10 Smart Dividend Stocks for the Rest of the Year | ABBV | https://www.nasdaq.com/articles/10-smart-dividend-stocks-for-the-rest-of-the-year-2019-06-11 | nan | nan | The market has managed to back itself away from imminent danger, bouncing back from a relatively serious stumble from a couple of weeks ago. It’s too soon to say stocks will be able to remain out of trouble, though. Aside from a lethargic time of year, the wrong headline could still easily up-end it all.
Or, perhaps the market will continue to climb.
In an uncertain environment like the one we find ourselves in now, sometimes the right strategic move is to simplify. Step into reliable cash cows, accumulate cash from dividends, and wait for a more opportune time to make risky bets.
The $64,000 question is, of course, which dividend stocks? They certainly aren’t all built the same.
Here’s a run-down of 10 different dividend stocks to buy, from a variety of industries. Investors won’t necessarily need all of them to create a more defensive-minded portfolio, though considering more than one might not be a bad idea either.
Dividend Stocks to Buy: Microsoft (MSFT)
Source: Shutterstock
Dividend Yield: 1.4%
The 1.4% yield on shares of software giant Microsoft (NASDAQ:) stock isn’t exactly jaw-dropping. But this name is a healthy combination of income of well-shielded growth that could resist marketwide weakness should trouble arise.
The key is the ongoing shift in the company’s business model. Rather than sell software via a one-time purchase (and hope that customer chooses Microsoft again when it comes time for an upgrade), Microsoft is increasingly looking to “rent” access to wares for a nominal monthly fee. The end result is reliable recurring revenue driven by everything from its Azure cloud-management platform to its office-productivity suites to games played on its Xbox franchise.
The company is a bit cryptic when it comes to explaining how much of its business is repeat business, but of last quarter’s $30.6 billion in revenue, “commercial cloud” products like Azure, Office 365 and LinkedIn — which are subscription-based — .
AbbVie (ABBV)
Source: Shutterstock
Dividend Yield: 5.5%
Drugmaker AbbVie (NYSE:) has been a tough name to own of late. Shares are down 33% from their early 2018 peak, mostly in response to patent woes. The primary U.S. patent on its Humira — which accounts for more than half of its sales — has expired, which threatens a huge chunk of its business.
That generic threat (in the U.S. anyway) , however. That’s when the recently approved biosimilar Hyrimoz, from Novartis (NYSE:) subsidiary Sandoz will become available.
That clearly puts a countdown timer on ABBV stock and its capacity to pay a dividend, and other Humira-related patents are scheduled to expire in the meantime. It’s mostly incorrect to say that Humira sales are on the verge of collapse, though. In turn, the company shouldn’t have any trouble supporting its current dividend for the foreseeable future.
The yield? A very attractive 5.5%.
Waste Management (WM)
Source: Shutterstock
Dividend Yield: 1.8%
When most investors look for dividend stocks to buy, they first and foremost consider utilities, banks and real estate investment trusts, and for good reason. These types of companies are well suited to drive reliable, recurring revenue that’s relatively easy to pass along to shareholders.
There’s an oft-overlooked area, however, that’s even more recession-proof than utility companies are. In good times and bad, humans are always going to produce garbage … as in literal trash.
Enter Waste Management (NYSE:) — a company that hasn’t failed to grow its top line in any quarter since the beginning of 2016, and has never been in any serious dire straits. Income has , even if never at breakneck speeds.
It’s anything but sexy, and the present yield of 1.9% isn’t exactly thrilling. Given its defensive nature on top of reinvesting the regular income it offers though, WM stock has averaged an over the course of the past ten years.
Exxon Mobil (XOM)
Source: Shutterstock
Dividend Yield: 4.6%
The good news is, the trouble crude oil prices and energy stocks were in back in 2014 and 2015 is in the past. The bad news is, crude prices are stabilizing (more or less) at values that allow all energy companies to thrive.
It’s a scenario that actually plays into the hand that a huge name like Exxon Mobil (NYSE:) is holding. It has the size and scale smaller players don’t, allowing it to acquire opportunities as they arise while simultaneously allowing it safely hunker down when oil prices slide lower.
Factor in the stock’s dividend yield of 4.6%, and what you’re left with is a healthy name that’s not locked into the broad market’s up and downs.
Texas Instruments (TXN)
Source: Shutterstock
Dividend Yield: 2.7%
Any name in the semiconductor business can be viewed as a liability in the wrong environment. If there’s any worthy exception to that line of thinking, though, it’s Texas Instruments (NASDAQ:).
Its advantage? It doesn’t make the CPUs and GPUs and other high-performance tech that consumer and corporations have to have when times are good, but are shunned when times are bad. Rather, Texas Instruments makes a , many of which you utilize every day without even realizing it, and most of which you’ve never heard of.
That’s not to suggest Texas Instruments is bulletproof, because it isn’t. Its business still ebbs and flows. Those ebbs and flows aren’t sea-sickening though, and the edge is taken off of any big swing by its respectable current yield of 2.7%.
Kraft Heinz (KHC)
Source:
Dividend Yield: 5.3%
Kraft Heinz (NASDAQ:) shares are down a stunning 66% for the past year, with most of that rout stemming from accounting issues that delayed the company’s full-year filing until just last Friday. The stock’s jump in response barely made a dent in the stock’s long-term demise.
Analysts still aren’t exactly impressed either. Though closing the internal probe of accounting concerns and bringing in a new CEO to lead a rebuilding effort is a step in the right direction, “concerns about business distractions and the investment we think the company will need to make in management talent, brand-building, and product innovation as it tries to pivot to topline growth.” Stifel’s Christopher Growe isn’t a fan either.
Investors looking for reliable income won’t find many better dividend stocks to buy, however. Thanks to its long-term pullback, KHC now yields a solid 5.3%, and is still earning more than enough to pay its dividend.
It’s also earning enough to finally stop lowering its dividend, which is something of a victory in and of itself.
Verizon Communications (VZ)
Source: Shutterstock
Dividend Yield: 4.2%
No good list of dividend stocks to buy can afford to not name at least one telecom play. Verizon Communications (NYSE:) gets the nod this time around, sporting a yield of 4.2%.
Wall Street isn’t a huge fan, for the record. Its consensus rating is somewhere between a “buy” and a “hold” thanks to a slew of downgrades since the latter part of last year, and the average price target of $59.64 is only about three points better than the stock’s present price. The overarching theme from the pros is simply not enough bank for the bucks Verizon is being forced to spend not to get ahead, but just hold its place relative to its competitors.
Verizon does have an advantage though. While in retrospect its acquisition of Yahoo (and the melding of it with AOL) was ill-advised, rival AT&T (NYSE:) finds itself now bogged down by its video entertainment ambitions, while Sprint (NYSE:) and T-Mobile US (NASDAQ:) have essentially conceded defeat as standalone entities.
In short, Verizon remains the best-of-breed in a business that isn’t ever going to go away.
Altria Group (MO)
Source:
Dividend Yield: 6.1%
The smoking cessation movement has been in the United States for years. Yet, it would be wrong to say Americans are giving up vices. The decline of the cigarette market has of course been offset by vaping and even a growing interest in hookas — yes, hookas — as alternative forms of self-indulgence. Meanwhile, the nation is increasingly embracing and legalizing cannabis.
Altria Group (NYSE:) hasn’t overlooked this consumer shift. It now owns a significant piece of marijuana play Cronos Group (NASDAQ:), and though it has actually backed out of the vaping business for the time being, in April the company got the FDA’s green light to . It’s a hybrid of e-cigs and traditional cigarettes.
Altria’s dividend is going to remain protected for the foreseeable future, and with its current yield of 6.1% the stock gives income investors a lot to like.
U.S. Bancorp (USB)
Source: Shutterstock
Dividend Yield: 2.8%
Large banks have struggled of late, along with their stocks.
Most of that weakness has been merited. Aside from the occasional (albeit temporary) inversions of the yield curve that threaten the profitability of lending activities, most of the mega-banks appear to have trouble managing their sheer size when business isn’t exactly booming.
Not so with smaller, regional banks like U.S. Bancorp (NYSE:). By avoiding the more volatile pieces of the banking market like mezzanine loans to shaky corporations or an investment-banking business that has to underwrite wobbly startups, U.S. Bancorp actually finds itself better positioned for lethargic future than many of its peers. Reliability counts.
At the bank stock’s current price, its dividend yield is a solid 2.8%.
Ford Motor (F)
Source:
Dividend Yield: 6.1%
Finally, add carmaker Ford Motor (NYSE:) to your list of dividend stocks to buy if you’re looking for reliable income in the near future. Its current yield is an incredible 6.1%.
In retrospect, the doubters were technically right. Though predicted years too early, the company did hit the headwind shareholders expected it to. This year’s top line is projected to slide a little lower, while next year’s should be flat.
Nevertheless, Ford never imploded the way the stock’s multiyear, 50% drubbing suggested was in the cards. The company’s still making a ton of money, and still passing a bunch of it along to investors. Namely, it’s earned $1.30 per share last year, but . There’s more than a little wiggle room.
Better yet, now that Ford is (finally) regrouping and , a rekindled wave of demand for its next-generation vehicles could already be brewing.
As of this writing, James Brumley held a long position in Ford and AT&T. You can learn more about James at his site, , or follow him on Twitter, at @jbrumley.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie (ABBV) Source: Shutterstock Dividend Yield: 5.5% Drugmaker AbbVie (NYSE:) has been a tough name to own of late. That clearly puts a countdown timer on ABBV stock and its capacity to pay a dividend, and other Humira-related patents are scheduled to expire in the meantime. It now owns a significant piece of marijuana play Cronos Group (NASDAQ:), and though it has actually backed out of the vaping business for the time being, in April the company got the FDA’s green light to . | AbbVie (ABBV) Source: Shutterstock Dividend Yield: 5.5% Drugmaker AbbVie (NYSE:) has been a tough name to own of late. That clearly puts a countdown timer on ABBV stock and its capacity to pay a dividend, and other Humira-related patents are scheduled to expire in the meantime. Dividend Stocks to Buy: Microsoft (MSFT) Source: Shutterstock Dividend Yield: 1.4% The 1.4% yield on shares of software giant Microsoft (NASDAQ:) stock isn’t exactly jaw-dropping. | AbbVie (ABBV) Source: Shutterstock Dividend Yield: 5.5% Drugmaker AbbVie (NYSE:) has been a tough name to own of late. That clearly puts a countdown timer on ABBV stock and its capacity to pay a dividend, and other Humira-related patents are scheduled to expire in the meantime. Dividend Stocks to Buy: Microsoft (MSFT) Source: Shutterstock Dividend Yield: 1.4% The 1.4% yield on shares of software giant Microsoft (NASDAQ:) stock isn’t exactly jaw-dropping. | AbbVie (ABBV) Source: Shutterstock Dividend Yield: 5.5% Drugmaker AbbVie (NYSE:) has been a tough name to own of late. That clearly puts a countdown timer on ABBV stock and its capacity to pay a dividend, and other Humira-related patents are scheduled to expire in the meantime. Dividend Stocks to Buy: Microsoft (MSFT) Source: Shutterstock Dividend Yield: 1.4% The 1.4% yield on shares of software giant Microsoft (NASDAQ:) stock isn’t exactly jaw-dropping. |
24984.0 | 2019-06-10 00:00:00 UTC | Don't Expect CBD Action Anytime Soon | ABBV | https://www.nasdaq.com/articles/dont-expect-cbd-action-anytime-soon-2019-06-10 | nan | nan | The recent public hearing by the Food & Drug Administration on cannabidiol (CBD) provided little clarity on the regulatory way forward for the marijuana-based compound. Acting FDA commissioner Ned Sharpless said there were "real risks" with using CBD and reiterated that since the agency has approved drugs with CBD as the active ingredient, it cannot be added to food products sold across state lines or sold as a dietary supplement.
While acknowledging the intense and growing public interest in the subject, "there is still much that we don't know," he said, indicating the way out of the regulatory labyrinth would not be easy or quick.
Image source: Getty Images.
Reducing the carnival barker atmosphere
It doesn't help that some companies hawk CBD like snake oil, claiming magical, therapeutic properties that can relieve or cure a variety of ailments, from anxiety and inflammation to insomnia and pain, and have added it to all manner of products like creams, lotions, and ointments. Sharpless said the FDA is aware of many that are marketing their products in violation of the law, and it has issued warning letters to others.
While there are studies that back up the efficacy of CBD's benefits, dosing levels are important for them to be effective, which many over-the-counter products don't come close to providing, and there is also the risk of conflating the outcomes from the high dosages of pharmaceutical-grade CBD used during clinical trials with the limited levels of commercial-grade CBD used in OTC products.
Even so, numerous national retail chains are lining up to sell CBD products to their customers, and even pharmacy giants Walgreens (NASDAQ: WBA), CVS (NYSE: CVS), and Rite Aid (NYSE: RAD) are jumping on the CBD bandwagon.
Sharpless is worried that wanton marketing of CBD products puts the health and safety of consumers at risk because they may avoid approved therapies in favor of CBD for serious or even fatal diseases without knowing the consequences.
Eliminating the patchwork approach to regulation
The FDA sees potential in these compounds, having approved GW Pharmaceuticals' (NASDAQ: GWPH) Epidiolex, which uses CBD as the active ingredient, as a drug treatment for epilepsy, as well as Marinol from AbbVie (NYSE: ABBV) and Syndros from Insys Therapeutics (NASDAQ: INSY), which contain tetrahydrocannabinol (THC), the psychoactive compound derived from marijuana. However, Sharpless says, "There are important reasons to generally prohibit putting drugs in the food supply."
Still, you will find that where states have legalized marijuana use, CBD is beginning to crop up in food and drinks (the FDA's regulatory jurisdiction extends only to interstate commerce). Large brewers like Heineken's Lagunitas has produced a CBD-infused beer for years that was only available in California, and now we're seeing restaurants adding it to their menus.
Carl's Jr. introduced a CBD burger this past April in its Colorado restaurants, and Denver-based Illegal Burger, which is developing CBD-based seasonings, is planning to launch food trucks under the AmeriCanna Cafe banner that will sell CBD-infused menu items outside of dispensaries.
The future is a long way off
While the hearing does open up a path for the eventual easing of the rules surrounding CBD usage, institutional resistance suggests it won't be quick.
FDA principal deputy commissioner and acting CIO Dr. Amy Abernethy wrote a tweet thread acknowledging public and business interest in reducing confusion around CBD but also noted, "It's our responsibility to ensure that the regulatory path is scientifically sound and in the interest of public health."
Abernethy's approach indicates the FDA will be slow-walking this forward -- a point the market seemed to agree on, since many cannabis-related stocks fell sharply following the hearing, including Canopy Growth, Aurora Cannabis, and Tilray.
Still, the FDA panel will continue to collect comments as it decides how best to regulate the compound. And though the efficacy of some of the products being hawked so far might be questionable, CBD's natural origins and the public's desire for it may ultimately persuade regulators to take a more hands-off approach. It just won't be happening anytime soon.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Eliminating the patchwork approach to regulation The FDA sees potential in these compounds, having approved GW Pharmaceuticals' (NASDAQ: GWPH) Epidiolex, which uses CBD as the active ingredient, as a drug treatment for epilepsy, as well as Marinol from AbbVie (NYSE: ABBV) and Syndros from Insys Therapeutics (NASDAQ: INSY), which contain tetrahydrocannabinol (THC), the psychoactive compound derived from marijuana. Reducing the carnival barker atmosphere It doesn't help that some companies hawk CBD like snake oil, claiming magical, therapeutic properties that can relieve or cure a variety of ailments, from anxiety and inflammation to insomnia and pain, and have added it to all manner of products like creams, lotions, and ointments. The future is a long way off While the hearing does open up a path for the eventual easing of the rules surrounding CBD usage, institutional resistance suggests it won't be quick. | Eliminating the patchwork approach to regulation The FDA sees potential in these compounds, having approved GW Pharmaceuticals' (NASDAQ: GWPH) Epidiolex, which uses CBD as the active ingredient, as a drug treatment for epilepsy, as well as Marinol from AbbVie (NYSE: ABBV) and Syndros from Insys Therapeutics (NASDAQ: INSY), which contain tetrahydrocannabinol (THC), the psychoactive compound derived from marijuana. Acting FDA commissioner Ned Sharpless said there were "real risks" with using CBD and reiterated that since the agency has approved drugs with CBD as the active ingredient, it cannot be added to food products sold across state lines or sold as a dietary supplement. Sharpless is worried that wanton marketing of CBD products puts the health and safety of consumers at risk because they may avoid approved therapies in favor of CBD for serious or even fatal diseases without knowing the consequences. | Eliminating the patchwork approach to regulation The FDA sees potential in these compounds, having approved GW Pharmaceuticals' (NASDAQ: GWPH) Epidiolex, which uses CBD as the active ingredient, as a drug treatment for epilepsy, as well as Marinol from AbbVie (NYSE: ABBV) and Syndros from Insys Therapeutics (NASDAQ: INSY), which contain tetrahydrocannabinol (THC), the psychoactive compound derived from marijuana. Acting FDA commissioner Ned Sharpless said there were "real risks" with using CBD and reiterated that since the agency has approved drugs with CBD as the active ingredient, it cannot be added to food products sold across state lines or sold as a dietary supplement. While there are studies that back up the efficacy of CBD's benefits, dosing levels are important for them to be effective, which many over-the-counter products don't come close to providing, and there is also the risk of conflating the outcomes from the high dosages of pharmaceutical-grade CBD used during clinical trials with the limited levels of commercial-grade CBD used in OTC products. | Eliminating the patchwork approach to regulation The FDA sees potential in these compounds, having approved GW Pharmaceuticals' (NASDAQ: GWPH) Epidiolex, which uses CBD as the active ingredient, as a drug treatment for epilepsy, as well as Marinol from AbbVie (NYSE: ABBV) and Syndros from Insys Therapeutics (NASDAQ: INSY), which contain tetrahydrocannabinol (THC), the psychoactive compound derived from marijuana. Acting FDA commissioner Ned Sharpless said there were "real risks" with using CBD and reiterated that since the agency has approved drugs with CBD as the active ingredient, it cannot be added to food products sold across state lines or sold as a dietary supplement. Sharpless is worried that wanton marketing of CBD products puts the health and safety of consumers at risk because they may avoid approved therapies in favor of CBD for serious or even fatal diseases without knowing the consequences. |
24985.0 | 2019-06-10 00:00:00 UTC | Better Buy: Eli Lilly vs. AbbVie | ABBV | https://www.nasdaq.com/articles/better-buy%3A-eli-lilly-vs.-abbvie-2019-06-10 | nan | nan | Eli Lilly (NYSE: LLY) and AbbVie (NYSE: ABBV) are similar-sized major drugmakers. But investors have viewed Lilly much more favorably lately. Its shares have soared 38% over the past 12 months, while AbbVie stock has sunk nearly 23%.
Does this mean that Lilly is the better pick for long-term investors than AbbVie is? Not necessarily. Here's what you need to know about the prospects for each of these big pharma stocks.
Image source: Getty Images.
The case for Eli Lilly
There's a lot to like with Eli Lilly's current product lineup. Sales for its psoriasis and psoriatic arthritis drug Taltz are booming, with the company reporting a 72% year-over-year increase in the first quarter. Several of Lilly's diabetes drugs also continue to generate strong growth, especially Basaglar, Jardiance, and Trulicity. Breast cancer drug Verzenio is also performing really well.
Lilly has some weak spots. Generic competition is taking a toll on longtime winner Cialis. Sales are slipping for insulin products Humalog and Humulin. However, the company is still able to deliver overall revenue growth despite these headwinds.
Emgality isn't generating significant revenue for Lilly yet. The drug won FDA approval in September 2018 for preventing migraines. However, Lilly recently picked up another approval for Emgality in preventing episodic cluster headaches. Analysts project that the drug could achieve peak annual sales in the ballpark of $700 million.
Lilly could have an even more successful migraine drug on the way. The company awaits an FDA decision on lasmiditan in preventing migraine. The drug could have blockbuster sales potential if approved.
The big pharma company's pipeline includes 18 late-stage programs. Several of these programs seek to gain additional approvals for existing drugs, including Jardiance and Trulicity. Lilly also has some promising new candidates, notably including immunology drug mirikizumab and pain drug tanezumab.
Wall Street expects Lilly to grow its earnings by an average of nearly 11% annually over the next five years. With the company also paying a dividend that currently yields around 2.2%, Lilly should provide an attractive total return to long-term investors.
The case for AbbVie
One drug currently contributes 57% of AbbVie's total revenue. The bad news for AbbVie is that this drug, Humira, faces competition from biosimilars in Europe. As a result, sales for Humira are beginning to decline.
There's plenty of good news for AbbVie, though. It has several other drugs for which sales are growing at a strong pace. Cancer drug Imbruvica continues to enjoy solid momentum. AbbVie expects that another cancer drug, Venclexta, will be a blockbuster in the future.
Like Lilly, AbbVie has a relatively new drug that isn't a significant moneymaker yet but could be in the not-too-distant future. Orilissa received FDA approval for managing endometriosis pain last year. The drug could eventually reach peak annual sales of around $2 billion.
Actually, AbbVie has another new drug that will almost certainly be an even bigger winner. The company won FDA approval for Skyrizi earlier this year in treating psoriasis. AbbVie expects peak sales of $2 billion for the drug.
The company has 16 late-stage programs in its pipeline. As was the case for Lilly, several of AbbVie's late-stage candidates target additional indications for existing drugs, including Imbruvica, Orilissa, Skyrizi, and Venclexta.
The big drugmaker's most promising candidate is upadacitinib, which awaits FDA approval in treating rheumatoid arthritis and is being evaluated in late-stage studies for several other immunology indications. AbbVie thinks that upadacitinib could bring in $6.5 billion annually.
You're not going to find many stronger dividends than AbbVie's. Its dividend currently yields nearly 5.6%. AbbVie has increased its dividend payout by 168% over the last six years.
Wall Street analysts project average annual earnings growth for AbbVie of nearly 8% over the next five years. The combination of this solid growth with a stellar dividend makes AbbVie an intriguing alternative for long-term investors.
Better buy
Eli Lilly and AbbVie seem likely to deliver similar total returns over the next few years. But there's one thing we haven't mentioned yet that I think tips the balance in favor of one of these stocks -- valuation.
Lilly's shares trade at nearly 18 times expected earnings. AbbVie's forward earnings multiple is a super-low 8.2. Even factoring in growth prospects for both companies, AbbVie's valuation is much more attractive. In my view, AbbVie is the better choice between these two big pharma stocks.
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Keith Speights owns shares of AbbVie. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | As was the case for Lilly, several of AbbVie's late-stage candidates target additional indications for existing drugs, including Imbruvica, Orilissa, Skyrizi, and Venclexta. Eli Lilly (NYSE: LLY) and AbbVie (NYSE: ABBV) are similar-sized major drugmakers. Its shares have soared 38% over the past 12 months, while AbbVie stock has sunk nearly 23%. | As was the case for Lilly, several of AbbVie's late-stage candidates target additional indications for existing drugs, including Imbruvica, Orilissa, Skyrizi, and Venclexta. Wall Street analysts project average annual earnings growth for AbbVie of nearly 8% over the next five years. Eli Lilly (NYSE: LLY) and AbbVie (NYSE: ABBV) are similar-sized major drugmakers. | The case for AbbVie One drug currently contributes 57% of AbbVie's total revenue. Like Lilly, AbbVie has a relatively new drug that isn't a significant moneymaker yet but could be in the not-too-distant future. As was the case for Lilly, several of AbbVie's late-stage candidates target additional indications for existing drugs, including Imbruvica, Orilissa, Skyrizi, and Venclexta. | AbbVie expects peak sales of $2 billion for the drug. As was the case for Lilly, several of AbbVie's late-stage candidates target additional indications for existing drugs, including Imbruvica, Orilissa, Skyrizi, and Venclexta. AbbVie has increased its dividend payout by 168% over the last six years. |
24986.0 | 2019-06-07 00:00:00 UTC | iShares Core Dividend Growth ETF Experiences Big Inflow | ABBV | https://www.nasdaq.com/articles/ishares-core-dividend-growth-etf-experiences-big-inflow-2019-06-07 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $247.4 million dollar inflow -- that's a 3.4% increase week over week in outstanding units (from 191,550,000 to 198,150,000). Among the largest underlying components of DGRO, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.5%, Home Depot Inc (Symbol: HD) is up about 0.5%, and Walt Disney Co. (Symbol: DIS) is higher by about 0.5%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average:
Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.72. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of DGRO, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.5%, Home Depot Inc (Symbol: HD) is up about 0.5%, and Walt Disney Co. (Symbol: DIS) is higher by about 0.5%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.72. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of DGRO, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.5%, Home Depot Inc (Symbol: HD) is up about 0.5%, and Walt Disney Co. (Symbol: DIS) is higher by about 0.5%. For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.72. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Among the largest underlying components of DGRO, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.5%, Home Depot Inc (Symbol: HD) is up about 0.5%, and Walt Disney Co. (Symbol: DIS) is higher by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $247.4 million dollar inflow -- that's a 3.4% increase week over week in outstanding units (from 191,550,000 to 198,150,000). For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.72. | Among the largest underlying components of DGRO, in trading today AbbVie Inc (Symbol: ABBV) is up about 0.5%, Home Depot Inc (Symbol: HD) is up about 0.5%, and Walt Disney Co. (Symbol: DIS) is higher by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core Dividend Growth ETF (Symbol: DGRO) where we have detected an approximate $247.4 million dollar inflow -- that's a 3.4% increase week over week in outstanding units (from 191,550,000 to 198,150,000). For a complete list of holdings, visit the DGRO Holdings page » The chart below shows the one year price performance of DGRO, versus its 200 day moving average: Looking at the chart above, DGRO's low point in its 52 week range is $31.04 per share, with $38.22 as the 52 week high point — that compares with a last trade of $37.72. |
24987.0 | 2019-06-07 00:00:00 UTC | Why I'm Sticking With My 3 Worst-Performing Stocks of 2019 So Far | ABBV | https://www.nasdaq.com/articles/why-im-sticking-my-3-worst-performing-stocks-2019-so-far-2019-06-07 | nan | nan | I just checked to see how the stocks that I own are performing. It's not something that I do very often, although I do keep close tabs on the business developments related to each of my positions. Despite the market downturn over the past few weeks, I was pleased to learn that my stocks are doing pretty well overall.
Eight of the 27 stocks that I own have delivered year-to-date gains of 20% or more. Another six are up by double-digit percentages. Overall, my portfolio is beating the S&P 500 index so far this year, 17% to 12%.
But I do have a few laggards. In fact, five of the stocks that I own are in negative territory. My three worst-performing stocks so far in 2019 are AbbVie (NYSE: ABBV), Editas Medicine (NASDAQ: EDIT), and Pfizer (NYSE: PFE). Am I ready to bail out on these stocks? Not at all. Here's why I'm sticking with them.
Image source: Getty Images.
Common denominators
You might have noticed that there's a common denominator for my three worst stocks of the year: They're all drug stocks. That isn't surprising considering that the healthcare sector overall is performing well below the broader market indexes.
Quite frankly, the current environment isn't a very good one for many healthcare stocks. I even floated the idea several weeks ago that this could be the most dangerous time ever to invest in healthcare.
Both Democrats and Republicans have targeted escalating prescription drug costs as a major issue to address. And a significant number of Democratic presidential candidates are promoting a single-payer healthcare system. Whatever you think about the merits of such a plan, there's no question that it would result in a major upheaval for many healthcare companies, including drugmakers.
There's another common denominator for AbbVie, Editas, and Pfizer. Each of these stocks delivered much higher returns in the recent past. In 2017, for example, AbbVie was one of my best-performing stocks, soaring more than 50%. That year Editas skyrocketed 89% (unfortunately, though, I didn't own it then). And in 2018, Pfizer jumped nearly 21%, trouncing the S&P 500. So while they're losers so far in 2019, they haven't always been losers.
Unique twists
AbbVie, Editas, and Pfizer haven't floundered so far this year just because of the political uncertainties related to the U.S. healthcare system. Each of these stocks also has its own unique reasons for underperforming.
In January, AbbVie posted disappointing 2018 fourth-quarter results. The big pharma company missed Wall Street estimates for both revenue and earnings. Even worse, AbbVie provided weak guidance for full-year 2019 due to sinking international sales for its top-selling drug Humira, which now faces competition from biosimilars in Europe.
There was also more bad news for AbbVie. The U.S. Food and Drug Administration (FDA) placed a partial clinical hold on studies evaluating Venclexta in treating multiple myeloma after a higher proportion of deaths was observed in a late-stage study among patients receiving the drug compared to those on placebo. AbbVie's Depatux-M also flopped in a late-stage clinical study targeting the treatment of glioblastoma, an aggressive type of brain cancer.
Editas Medicine's CEO unexpectedly left the company in January, causing its stock to plunge. And the news came only a few weeks after the biotech's CFO announced his resignation.
Pfizer faces headwinds from key drugs losing patent exclusivity, which resulted in the company providing lower-than-expected full-year 2019 revenue guidance. Blockbuster erectile dysfunction drug Viagra already lost patent exclusivity. Another of the company's top-selling drugs, Lyrica, loses exclusivity this summer. Overall, Pfizer's revenue will be negatively impacted to the tune of around $2.6 billion this year due to these headwinds.
The power of long-term thinking
Does all of this have me worried? Am I fretting over what I should do with these anchors dragging down my portfolio's returns this year? No and no.
It's not that I'm ignoring the negative news. I'll admit that when Editas announced the departure of its CFO and then its CEO I was concerned. I wasn't pleased with AbbVie's pipeline setbacks or that both AbbVie and Pfizer gave relatively weak guidance for 2019.
However, the reason why I'm not selling any of these three stocks despite their bad news this year is simple: I still believe in their long-term prospects. When you look at stocks with a long-term mindset, events that cause stumbles over the short run don't bother you nearly as much as they otherwise would.
Yes, AbbVie faces declining sales for Humira due to competition from biosimilars. Yes, Editas Medicine's executive team has gone through a shake-up. Yes, Pfizer must deal with key drugs losing exclusivity. But I still think all three companies will be big winners over the long term.
AbbVie's current lineup includes drugs with soaring sales like Imbruvica, Orilissa, and Skyrizi. Another immunology drug with blockbuster potential, upadacitinib, should launch later this year. Pfizer appears to be positioned to return to solid growth after 2020. In the meantime, both stocks pay mouth-watering dividends.
Editas is set to begin the first ever in vivo (in the body) clinical testing in humans of a CRISPR gene-editing therapy this year. If it's successful, the biotech's lead candidate EDIT-101 could literally cause the blind to see.
I'm not talking about just thinking positive thoughts about AbbVie, Editas, and Pfizer along the lines of Norman Vincent Peale's book The Power of Positive Thinking. Instead, I'm adhering to what you might call the power of long-term thinking.
This way of thinking allows me to hold onto stocks that underperform for a while. By the way, one of my worst stocks of last year, Celgene, is in my top three stocks so far this year. That's the power of long-term thinking at work.
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Keith Speights owns shares of AbbVie, CELG, Editas Medicine, and Pfizer. The Motley Fool owns shares of and recommends CELG and Editas Medicine. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Unique twists AbbVie, Editas, and Pfizer haven't floundered so far this year just because of the political uncertainties related to the U.S. healthcare system. Even worse, AbbVie provided weak guidance for full-year 2019 due to sinking international sales for its top-selling drug Humira, which now faces competition from biosimilars in Europe. My three worst-performing stocks so far in 2019 are AbbVie (NYSE: ABBV), Editas Medicine (NASDAQ: EDIT), and Pfizer (NYSE: PFE). | Even worse, AbbVie provided weak guidance for full-year 2019 due to sinking international sales for its top-selling drug Humira, which now faces competition from biosimilars in Europe. See the 10 stocks *Stock Advisor returns as of March 1, 2019 Keith Speights owns shares of AbbVie, CELG, Editas Medicine, and Pfizer. My three worst-performing stocks so far in 2019 are AbbVie (NYSE: ABBV), Editas Medicine (NASDAQ: EDIT), and Pfizer (NYSE: PFE). | See the 10 stocks *Stock Advisor returns as of March 1, 2019 Keith Speights owns shares of AbbVie, CELG, Editas Medicine, and Pfizer. My three worst-performing stocks so far in 2019 are AbbVie (NYSE: ABBV), Editas Medicine (NASDAQ: EDIT), and Pfizer (NYSE: PFE). There's another common denominator for AbbVie, Editas, and Pfizer. | My three worst-performing stocks so far in 2019 are AbbVie (NYSE: ABBV), Editas Medicine (NASDAQ: EDIT), and Pfizer (NYSE: PFE). There's another common denominator for AbbVie, Editas, and Pfizer. In 2017, for example, AbbVie was one of my best-performing stocks, soaring more than 50%. |
24988.0 | 2019-05-31 00:00:00 UTC | Notable Friday Option Activity: MSFT, ABBV, LRCX | ABBV | https://www.nasdaq.com/articles/notable-friday-option-activity%3A-msft-abbv-lrcx-2019-05-31 | nan | nan | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Microsoft Corporation (Symbol: MSFT), where a total volume of 109,184 contracts has been traded thus far today, a contract volume which is representative of approximately 10.9 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 44.2% of MSFT's average daily trading volume over the past month, of 24.7 million shares. Particularly high volume was seen for the $134 strike call option expiring June 21, 2019, with 7,984 contracts trading so far today, representing approximately 798,400 underlying shares of MSFT. Below is a chart showing MSFT's trailing twelve month trading history, with the $134 strike highlighted in orange:
AbbVie Inc (Symbol: ABBV) options are showing a volume of 19,564 contracts thus far today. That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.6% of ABBV's average daily trading volume over the past month, of 4.6 million shares. Particularly high volume was seen for the $90 strike call option expiring August 16, 2019, with 3,557 contracts trading so far today, representing approximately 355,700 underlying shares of ABBV. Below is a chart showing ABBV's trailing twelve month trading history, with the $90 strike highlighted in orange:
And Lam Research Corp (Symbol: LRCX) saw options trading volume of 7,996 contracts, representing approximately 799,600 underlying shares or approximately 40.8% of LRCX's average daily trading volume over the past month, of 2.0 million shares. Particularly high volume was seen for the $145 strike put option expiring June 07, 2019, with 809 contracts trading so far today, representing approximately 80,900 underlying shares of LRCX. Below is a chart showing LRCX's trailing twelve month trading history, with the $145 strike highlighted in orange:
For the various different available expirations for MSFT options, ABBV options, or LRCX options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Particularly high volume was seen for the $90 strike call option expiring August 16, 2019, with 3,557 contracts trading so far today, representing approximately 355,700 underlying shares of ABBV. Below is a chart showing MSFT's trailing twelve month trading history, with the $134 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) options are showing a volume of 19,564 contracts thus far today. That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.6% of ABBV's average daily trading volume over the past month, of 4.6 million shares. | Below is a chart showing MSFT's trailing twelve month trading history, with the $134 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) options are showing a volume of 19,564 contracts thus far today. Below is a chart showing ABBV's trailing twelve month trading history, with the $90 strike highlighted in orange: And Lam Research Corp (Symbol: LRCX) saw options trading volume of 7,996 contracts, representing approximately 799,600 underlying shares or approximately 40.8% of LRCX's average daily trading volume over the past month, of 2.0 million shares. That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.6% of ABBV's average daily trading volume over the past month, of 4.6 million shares. | Below is a chart showing ABBV's trailing twelve month trading history, with the $90 strike highlighted in orange: And Lam Research Corp (Symbol: LRCX) saw options trading volume of 7,996 contracts, representing approximately 799,600 underlying shares or approximately 40.8% of LRCX's average daily trading volume over the past month, of 2.0 million shares. Below is a chart showing MSFT's trailing twelve month trading history, with the $134 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) options are showing a volume of 19,564 contracts thus far today. That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.6% of ABBV's average daily trading volume over the past month, of 4.6 million shares. | Below is a chart showing ABBV's trailing twelve month trading history, with the $90 strike highlighted in orange: And Lam Research Corp (Symbol: LRCX) saw options trading volume of 7,996 contracts, representing approximately 799,600 underlying shares or approximately 40.8% of LRCX's average daily trading volume over the past month, of 2.0 million shares. Below is a chart showing LRCX's trailing twelve month trading history, with the $145 strike highlighted in orange: For the various different available expirations for MSFT options, ABBV options, or LRCX options, visit StockOptionsChannel.com. Below is a chart showing MSFT's trailing twelve month trading history, with the $134 strike highlighted in orange: AbbVie Inc (Symbol: ABBV) options are showing a volume of 19,564 contracts thus far today. |
24989.0 | 2019-05-30 00:00:00 UTC | 3 Top Gene Therapy Stocks That Could Soar | ABBV | https://www.nasdaq.com/articles/3-top-gene-therapy-stocks-that-could-soar-2019-05-30 | nan | nan | Thanks to advances in technology and gene sequencing, gene therapy has gone from science fiction to science fact. By either adding new genes to fight faulty ones, replacing/editing missing/broken prices or actually “turning off” the genes causing problems, gene therapy has the potential to change the game when it comes to biotech stocks and healthcare.
That’s great news, as there are more than 10,000 different disorders and diseases caused by faulty genes.
With the FDA launching several fast-track programs for gene therapies last summer, the biotech stocks that specialize in these cutting-edge treatments could see their drugs hit the market that much faster. And yet, the recent market sell-off has caused many of the biotech stocks looking at gene therapy to crater. Given their game-changing potential, these days many stocks in the sector could be considered bargains.
Some more than others.
Which gene-therapy biotech stocks have great potential to soar over the long haul? Here are three stocks to buy that could do just that.
Gene Therapy Stocks to Buy: CRISPR Therapeutics (CRSP)
Source: Shutterstock
Clustered Regularly Interspaced Short Palindromic Repeats is a mouthful to say, which is why scientists have shortened it to just CRISPR. CRISPR is the latest method of gene editing and offers cheaper, simpler and faster slicing and dicing of genes. As its name implies, CRISPR Therapeutics (NASDAQ:) uses the technique.
CRSP stock is targeting blood diseases such as beta-thalassemia and sickle cell disease- which are caused by the same mutation. The beauty of this is that the biotech has been able to move ahead at the same time for both indications. Partnering with biotech giant Vertex Pharmaceuticals (NASDAQ:), CRSP’s lead candidate — CTX001 — started phase 1 clinical trials this past February. This trial marks the first time in history that a human trial for a CRISPR-based product has been conducted.
Naturally, a lot is riding on the trial- especially with the drug winning FDA fast track status. If results are even somewhat positive, CRSP stock could surge higher.
But CTX001 isn’t the only . The firm is working one several oncology products as well as new gene editing therapies for muscular dystrophy and cystic fibrosis. These drugs could provide plenty of upside as well down the road.
In the end, if you’re looking for biotech stocks to buy that are looking at gene therapy, CRISPR Therapeutics could be a major star.
uniQure NV (QURE)
Source: Shutterstock
When it comes to biotech stocks, uniQure (NASDAQ:) is gene therapy royalty. That’s because the firm actually created and launched the very first successful gene therapy back in 2012. However, due to the cost of the drug, it was never prescribed. But QURE has turned that successful approval into a platform for further successful development.
This includes the biotech stock’s latest work for hemophilia. QURE has seen great success with its gene therapy program for the blood disorder. After seeing , QURE has moved its top hemophilia medication — AMT-061 — into phase I/IIb trials. This news sent the clinical stage biotech stock up more than 34%. Given its past history of navigating the gene therapy waters to approval, QURE could have another hit on its hand.
Elsewhere, the firm has started trials for the first gene therapy targeting Huntington’s disease and has gene therapies for congestive heart failure in pipelines. All of these are much more “popular” issues and should help QURE actually see prescription growth if successful.
Like most clinical-stage biotech stocks, QURE is a gamble. But it’s a more calculated risk than most given its history and how great its previous results were.
Voyager Therapeutics (VYGR)
Source: Shutterstock
When it comes to clinical stage biotech stocks, it pays to look at partnerships. For gene therapy play Voyager Therapeutics (NASDAQ:), partnerships include biotech giant AbbVie (NYSE:), neurological specialist Neurocrine Biosciences (NASDAQ:) and major pharma stock Sanofi (NASDAQ:). All three of those major players have provided VYGR with some major cash infusions to develop its technology and gene therapy applications. Most clinical biotech stocks would kill to have more than $360 million in cash on their balance sheets.
That cash will provide it plenty of working capital to develop its lucrative gene therapy portfolio.
And lucrative it will be. VYGR is targeting Parkinson’s disease, Amyotrophic Lateral Sclerosis (ALS), Huntington’s disease and Alzheimer’s disease. These are some of the hardest diseases to crack and winners here will be massive achievements. It seems that Voyager may just get there.
So far, results for the firm’s tech have been pretty positive, which could explain all the major partnerships. , Voyager announced that its initial trial for VY-AADC demonstrated improvement in clinical measures for Parkinson’s Disease. This success prompted VYGR to start phase II trials — with results coming in mid-2020. Meanwhile, the firm is moving forward with initial trials with its other partners and developing a robust pipeline. With ample cash, VYGR has plenty of time to get these therapies through testing. Fast track designation from the FDA doesn’t hurt either.
All in all, VYGR represents a great gene therapy play thanks to its leading partners. Clearly, they see the good in the biotech stocks
At the time of writing, Aaron Levitt was long CRSP and VYGR stock
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For gene therapy play Voyager Therapeutics (NASDAQ:), partnerships include biotech giant AbbVie (NYSE:), neurological specialist Neurocrine Biosciences (NASDAQ:) and major pharma stock Sanofi (NASDAQ:). With the FDA launching several fast-track programs for gene therapies last summer, the biotech stocks that specialize in these cutting-edge treatments could see their drugs hit the market that much faster. Partnering with biotech giant Vertex Pharmaceuticals (NASDAQ:), CRSP’s lead candidate — CTX001 — started phase 1 clinical trials this past February. | For gene therapy play Voyager Therapeutics (NASDAQ:), partnerships include biotech giant AbbVie (NYSE:), neurological specialist Neurocrine Biosciences (NASDAQ:) and major pharma stock Sanofi (NASDAQ:). Gene Therapy Stocks to Buy: CRISPR Therapeutics (CRSP) Source: Shutterstock Clustered Regularly Interspaced Short Palindromic Repeats is a mouthful to say, which is why scientists have shortened it to just CRISPR. Partnering with biotech giant Vertex Pharmaceuticals (NASDAQ:), CRSP’s lead candidate — CTX001 — started phase 1 clinical trials this past February. | For gene therapy play Voyager Therapeutics (NASDAQ:), partnerships include biotech giant AbbVie (NYSE:), neurological specialist Neurocrine Biosciences (NASDAQ:) and major pharma stock Sanofi (NASDAQ:). By either adding new genes to fight faulty ones, replacing/editing missing/broken prices or actually “turning off” the genes causing problems, gene therapy has the potential to change the game when it comes to biotech stocks and healthcare. Elsewhere, the firm has started trials for the first gene therapy targeting Huntington’s disease and has gene therapies for congestive heart failure in pipelines. | For gene therapy play Voyager Therapeutics (NASDAQ:), partnerships include biotech giant AbbVie (NYSE:), neurological specialist Neurocrine Biosciences (NASDAQ:) and major pharma stock Sanofi (NASDAQ:). QURE has seen great success with its gene therapy program for the blood disorder. Voyager Therapeutics (VYGR) Source: Shutterstock When it comes to clinical stage biotech stocks, it pays to look at partnerships. |
24990.0 | 2019-05-30 00:00:00 UTC | The Inverted Yield Curve Should Make Investors Pivot, Not Panic | ABBV | https://www.nasdaq.com/articles/inverted-yield-curve-should-make-investors-pivot-not-panic-2019-05-30 | nan | nan | Investors have sold stocks on nervousness surrounding the inverted yield curve. No inversion this large has occurred , right before the 2008 financial crisis. But don’t indiscriminately slam that “SELL” button just yet. Yield-curve inversions merely indicate recessions rather than predict them.
However, given the length of the economic cycle, cautious investors could take the recent yield-curve inversion as a signal to go into cash or low-cost stocks.
What Is an Inverted Yield Curve?
In most cases, longer maturity dates on bonds tend to bring higher interest rates. However, anomalies sometimes occur. One example involves an . The yield curve inverts when the interest rate on 10-year treasury bonds dips below the same interest rate on three-month bonds.
With the trade war in Asia looming, investors have sold stocks and put money into the 10-year treasury as a haven. As a result of increased demand, the interests rates on these bonds have fallen and the U.S. now faces the most significant inversion since 2007. As of this writing, the three-month Treasury yields 2.36%. Meanwhile, the 10-year interest rate has fallen to just above 2.23%. Hence the yield curve has now inverted by almost 13 basis points.
This worries investors mainly because of the length of the current economic cycle. The current recovery first began in March 2009, making this the eleventh year of the ongoing expansion. Since 1945, economic expansion cycles have lasted for an average of 58.4 months. Hence, the current cycle has now run more than double the length of the average period.
That said, investors should see the length of the expansion as a risk factor instead of a sign of a looming recession. Australia has seen of economic expansion. For this reason, we cannot assume the U.S. current growth period will end soon.
Investors Can Still Find Stocks to Buy
Moreover, even if a recession occurs, investors can still find stocks to buy. This typically happens because some companies operate on different economic cycles. For example, AbbVie (NYSE:) has faced a looming patent expiration on Humira, a key source of revenue. Consequently, ABBV stock trades at a forward P/E ratio of just 8.25. Moreover, ABBV’s dividend yield stands at about 5.4%. What makes the cash return more significant is the fact that AbbVie has built a 46-year track record of annual payout hikes that will likely continue. Even with a recession looming, I cannot recommend selling such a stock in that instance.
The same holds true for AT&T (NYSE:). T stock has suffered as competition in wireless as well as cord cutting hurt profits. Moreover, it had to spend tens of billions of dollars to build a 5G network to remain competitive. However, thanks to 5G, AT&T looks poised to begin an expansion cycle. With or without a recession, customers will make this switch, and this should bolster AT&T stock. Further, the forward P/E stands at 8.8 on a stock with a 34-year history of dividend hikes. Hence, the payout should continue to increase annually despite a 6.6% dividend yield.
Concluding Thoughts on the Inverted Yield Curve
The inverted yield curve may or may not signal a coming recession. However, cash and low-cost stocks will serve investors no matter what happens to the economy. The recent yield curve inversion is the most significant since 2007. As a result, stocks sold off as investors feared another economic slowdown. The current economic expansion also causes concern as it has now persisted more than twice as long as the average post-World War II expansion.
Still, investors should not panic. For one, Australia has shown that expansion cycles can persist for decades. Further, many stocks have seen recessions of their own in recent years. Consequently, investors can find equities at low P/E ratios, some of which offer growing dividends with high yields.
Investors cannot avoid a recession. However, by remaining nimble and finding stocks coming out of a downturn of their own, investors can still profit.
As of this writing, Will Healy is long ABBV stock. You can at @HealyWriting.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What makes the cash return more significant is the fact that AbbVie has built a 46-year track record of annual payout hikes that will likely continue. For example, AbbVie (NYSE:) has faced a looming patent expiration on Humira, a key source of revenue. Consequently, ABBV stock trades at a forward P/E ratio of just 8.25. | For example, AbbVie (NYSE:) has faced a looming patent expiration on Humira, a key source of revenue. Consequently, ABBV stock trades at a forward P/E ratio of just 8.25. Moreover, ABBV’s dividend yield stands at about 5.4%. | For example, AbbVie (NYSE:) has faced a looming patent expiration on Humira, a key source of revenue. Consequently, ABBV stock trades at a forward P/E ratio of just 8.25. Moreover, ABBV’s dividend yield stands at about 5.4%. | For example, AbbVie (NYSE:) has faced a looming patent expiration on Humira, a key source of revenue. Consequently, ABBV stock trades at a forward P/E ratio of just 8.25. Moreover, ABBV’s dividend yield stands at about 5.4%. |
24991.0 | 2019-05-28 00:00:00 UTC | This Just In: Goldman Sachs Picks 4 Big Pharma Stocks to Buy | ABBV | https://www.nasdaq.com/articles/just-%3A-goldman-sachs-picks-4-big-pharma-stocks-buy-2019-05-28 | nan | nan | Every day, Wall Street analysts upgrade some stocks, downgrade others, and "initiate coverage" on a few more. But do these analysts even know what they're talking about? Today, we're taking several high-profile Wall Street picks and putting them under the microscope...
Investment banker Goldman Sachs plunged back into the world of big pharma stocks this morning. Initiating coverage of seven biotech and pharmaceutical companies running nearly the length of the alphabet -- from AbbVie all the way to Pfizer (NYSE: PFE) -- Goldman Sachs had good news for investors:
Three of these stocks -- Johnson & Johnson (NYSE: JNJ), Eli Lilly (NYSE: LLY), and Bristol-Myers Squibb (NYSE: BMY) -- are buys, and a fourth looks like such a great bargain that the analyst actually calls it a "Conviction Buy."
Here they are for you -- and here's what Goldman has to say about each of them.
Image source: Getty Images.
Johnson & Johnson
Easily the largest of Goldman Sachs' pharma picks today, Johnson & Johnson tips the scales at $370 billion in market cap and $81.6 billion in annual revenue. (J&J is also the most expensive, with a price-to-earnings ratio of 25.8.)
But Johnson & Johnson is worth the price premium, argues Goldman Sachs in a note covered today on StreetInsider.com (subscription required). Although earnings declined 14% last quarter, the company is poised to turn around its fortunes on the strength of its diversified portfolio of consumer and medical products and devices.
What's more, in contrast to other large pharmaceutical companies, Goldman Sachs sees Johnson & Johnson as having the least exposure to government Medicare and Medicaid spending of any big pharma stock the analyst covers. As the 2020 presidential race gets underway, and Medicare for All proposals get put under the spotlight, Goldman Sachs worries that discussions of changes to healthcare policy (and cuts to healthcare spending) could pressure healthcare stocks. In such an environment, diversification away from government healthcare programs could become a big plus for Johnson & Johnson.
Eli Lilly
In contrast to Johnson & Johnson and its 25-plus P/E ratio, Eli Lilly looks like a relative bargain at just 19 times trailing earnings. Less than one-third J&J's size in both market cap and sales, Eli Lilly also arguably has more room to grow.
Indeed, growth prospects are key to Goldman Sachs' investment thesis. In a note covered on TheFly.com, the analyst argues that Eli Lilly has new product cycles underway in four separate categories: Cancer, pain management, immunology, and diabetes. Goldman Sachs says the company's growth prospects in diabetes treatment are particularly undervalued by the market right now, and argues that rather than trading at a discount to peers like Johnson & Johnson, Eli Lilly stock should actually trade at a premium.
Bristol-Myers Squibb
The smallest of Goldman Sachs' four big pharma companies scoring buy ratings today, Bristol-Myers Squibb tips the scales at a svelte $76 billion market cap -- even though its $23.2 billion in trailing sales aren't that much less than Eli Lilly's $24.7 billion!
So why is Bristol-Myers Squibb stock selling for such a large discount to its peers -- less than 15 times trailing earnings? Some investors worry that it's a "value-trap," reports StreetInsider, with the company having just anted up $74 billion to acquire Celgene -- just as the latter is facing the prospect of its Revlimid patent expiring. Goldman Sachs, however, is looking forward to Bristol-Myers' Opdivo lung cancer treatment becoming a "front-line" drug in the war against cancer, and predicts positive data from clinical trials will emerge later this summer.
Pointing out that Bristol-Myers stock sells at a "significant discount" to other big pharma companies, Goldman argues that it's too cheap, and its multiple to earnings is bound to expand -- transforming from $47 a share to $54 within a year.
Pfizer
Each of the three stocks named above won a buy rating from Goldman Sachs this morning, but the analyst's most coveted rating -- "Conviction Buy" -- went to only one stock in the pharmaceuticals sector: Pfizer.
Selling for under $42 a share today, Goldman Sachs believes Pfizer can soar 17% to hit $49 over the next 12 months as expectations for the company's growth rate (earnings up 9% last quarter, but sales up less than 2%) begin to "inflect" as investors look ahead to 2021. The analyst highlights sales prospects for Pfizer's Tafamidis, Ibrance, and Xtandi drugs, which Goldman Sachs believes the Street is underestimating, as key to the company's ability to grow its $53.9 billion revenue stream to $57.4 billion over the next two years -- 6.5% total sales growth.
On top of that, the analyst predicts that Pfizer's operating profit margin on these sales will expand. According to data from S&P Global Market Intelligence, the drugmaker earned a very respectable 29.8% operating profit margin over the last 12 months -- its best margin in the last four years. But Goldman Sachs believes we'll see this margin soar as high as 40.6% by 2022 on the back of faster sales growth and restrained cost growth.
What it means for investors
Now be warned: As optimistic as Goldman Sachs is about the prospects for each of these four companies, its predictions are far off the beaten track on Wall Street, where most analysts expect to see no more than single-digit earnings growth for most of them (Eli Lilly is said to be the fastest grower, with consensus estimates predicting earnings growth of about 10% annually over the next five years).
If Goldman Sachs is right about Pfizer, however, growing sales at 3% or better over the next few years and expanding its operating profit margin by more than a third, Pfizer may in fact be the best bet of the bunch.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Initiating coverage of seven biotech and pharmaceutical companies running nearly the length of the alphabet -- from AbbVie all the way to Pfizer (NYSE: PFE) -- Goldman Sachs had good news for investors: Three of these stocks -- Johnson & Johnson (NYSE: JNJ), Eli Lilly (NYSE: LLY), and Bristol-Myers Squibb (NYSE: BMY) -- are buys, and a fourth looks like such a great bargain that the analyst actually calls it a "Conviction Buy." Today, we're taking several high-profile Wall Street picks and putting them under the microscope... Investment banker Goldman Sachs plunged back into the world of big pharma stocks this morning. Pointing out that Bristol-Myers stock sells at a "significant discount" to other big pharma companies, Goldman argues that it's too cheap, and its multiple to earnings is bound to expand -- transforming from $47 a share to $54 within a year. | Initiating coverage of seven biotech and pharmaceutical companies running nearly the length of the alphabet -- from AbbVie all the way to Pfizer (NYSE: PFE) -- Goldman Sachs had good news for investors: Three of these stocks -- Johnson & Johnson (NYSE: JNJ), Eli Lilly (NYSE: LLY), and Bristol-Myers Squibb (NYSE: BMY) -- are buys, and a fourth looks like such a great bargain that the analyst actually calls it a "Conviction Buy." Johnson & Johnson Easily the largest of Goldman Sachs' pharma picks today, Johnson & Johnson tips the scales at $370 billion in market cap and $81.6 billion in annual revenue. Bristol-Myers Squibb The smallest of Goldman Sachs' four big pharma companies scoring buy ratings today, Bristol-Myers Squibb tips the scales at a svelte $76 billion market cap -- even though its $23.2 billion in trailing sales aren't that much less than Eli Lilly's $24.7 billion! | Initiating coverage of seven biotech and pharmaceutical companies running nearly the length of the alphabet -- from AbbVie all the way to Pfizer (NYSE: PFE) -- Goldman Sachs had good news for investors: Three of these stocks -- Johnson & Johnson (NYSE: JNJ), Eli Lilly (NYSE: LLY), and Bristol-Myers Squibb (NYSE: BMY) -- are buys, and a fourth looks like such a great bargain that the analyst actually calls it a "Conviction Buy." Goldman Sachs says the company's growth prospects in diabetes treatment are particularly undervalued by the market right now, and argues that rather than trading at a discount to peers like Johnson & Johnson, Eli Lilly stock should actually trade at a premium. Bristol-Myers Squibb The smallest of Goldman Sachs' four big pharma companies scoring buy ratings today, Bristol-Myers Squibb tips the scales at a svelte $76 billion market cap -- even though its $23.2 billion in trailing sales aren't that much less than Eli Lilly's $24.7 billion! | Initiating coverage of seven biotech and pharmaceutical companies running nearly the length of the alphabet -- from AbbVie all the way to Pfizer (NYSE: PFE) -- Goldman Sachs had good news for investors: Three of these stocks -- Johnson & Johnson (NYSE: JNJ), Eli Lilly (NYSE: LLY), and Bristol-Myers Squibb (NYSE: BMY) -- are buys, and a fourth looks like such a great bargain that the analyst actually calls it a "Conviction Buy." Eli Lilly In contrast to Johnson & Johnson and its 25-plus P/E ratio, Eli Lilly looks like a relative bargain at just 19 times trailing earnings. Indeed, growth prospects are key to Goldman Sachs' investment thesis. |
24992.0 | 2019-05-27 00:00:00 UTC | This 5% Dividend Yield Isn't Good Enough for Me | ABBV | https://www.nasdaq.com/articles/5-dividend-yield-isnt-good-enough-me-2019-05-27 | nan | nan | The very first stock I ever bought had a 20% dividend yield.
It didn't pan out well for me. The details are a story for another day, but suffice it to say that I fell into the classic trap that catches many income investors: getting excited about a company's juicy yield, and then buying the company for the dividend.
Income investing is about more than just playing defense. Image source: Getty Images.
After all, when you see a juicy yield, it's easy to see the opportunity and gloss over any problems. But I think AbbVie (NYSE: ABBV) has too many problems right now. So, despite its 5% dividend yield, AbbVie isn't worth an investment today.
What is dividend sustainability?
Now, you might think my concern centers on the sustainability of AbbVie's dividend. After all, AbbVie's dividend payout ratio was 94% of adjusted diluted EPS for the trailing 12 months. Normally this would scream trouble (I avoid a dividend payout ratio greater than 80% or so), but the company predicted it will roughly double adjusted earnings in 2019, which lessens my concerns.
Plus, if you measure the dividend by the cash dividend payout ratio (that is, dividing dividends paid by operating cash flow minus capital expenditures), AbbVie achieves a 46% ratio -- a sign that the company's dividend is quite well funded by cash.
(The gap between the two can be explained by AbbVie taking a $4 billion impairment charge -- which impacts earnings, but not cash -- when it scrapped a major clinical drug in January.)
So, in short, there's no reason to think AbbVie's dividend is in any immediate trouble.
The extended, painful patent cliff
If you remember anything about AbbVie, remember this: It has too many of its proverbial eggs in one basket. Humira, AbbVie's megablockbuster immunology drug, represented 57% of total adjusted revenue last quarter. As background, Humira is administered via an injection and treats a variety of autoimmune diseases, including rheumatoid arthritis, plaque psoriasis, Crohn's disease, and ankylosing spondylitis (to name a few).
And that was after its sales dipped by 6% year over year. Humira's sales contraction was primarily due to the expiration of its international patents, which led to a 28% year-over-year decrease in international revenue as biosimilar competition stole market share. By contrast, in the U.S. -- where Humira shouldn't see biosimilar competition until around 2023 -- Humira's sales grew 7% year over year. Fortunately for AbbVie (at least in the short term), about three-quarters of Humira's sales are domestic, so most of its revenue is shielded from biosimilar competition for a few more years. Although Humira's $19.9 billion in 2018 sales undoubtedly represented its high-water mark, there's still plenty of money to be made over the next few years before biosimilar competition decimates Humira in the U.S.
AbbVie has a plan
AbbVie is attempting to use that time constructively -- in part by switching patients from Humira to new drug Skyrizi, which was approved in April to treat psoriasis. That's intentional cannibalization -- to prevent losing patients (and revenue) to biosimilars, AbbVie is trying to move as many over to Skyrizi as possible. SVB Leerink analyst Geoffrey Porges thinks Skyrizi will ultimately peak at about $3 billion in annual sales. By contrast, AbbVie thinks it could peak at $5 billion by 2025. And AbbVie's rheumatoid arthritis drug upadacitinib was recently granted a priority review by the FDA, which means AbbVie should get a yea or nay sometime in the third quarter of this year. With management predicting as much as $6.5 billion in peak annual sales, AbbVie has quite a bit riding on it. Yet, when you compare the perhaps $11.5 billion in combined annual revenue these two drugs could potentially bring in years down the road if everything goes well to Humira's $19.9 billion in sales last year...well...there's still a massive gaping hole in AbbVie's prospects for growth (or even stability) .
AbbVie has still other irons in the fire -- perhaps most notably blood cancer drug Imbruvica, which it acquired in 2015, and is on track to contribute as much as perhaps $4.5 billion to AbbVie's top line this year (versus $3.6 billion last year). Venclexta, another blood cancer drug, is earlier in its growth trajectory but may ultimately peak out to the tune of around $2 billion in annual sales.
All those drugs combined might allow AbbVie to avoid further top-line degradation due to the Humira patent cliff. To be clear, that's not really a prescription for growth -- it's really more about trying to fill a Humira-size hole in AbbVie's income statement -- which is not exactly exciting.
It's about what I'm looking for
I'm never satisfied with "just" a dividend. I want a company with credible plans for growth so I can take advantage of both growing dividend income and stock price returns. And I can only reasonably expect that sort of opportunity with a company that is better diversified and better primed for growth than AbbVie. (Plus, although I don't think AbbVie's dividend is in any danger today...if a few things go wrong in the next few years, that could change.)
The bottom line is, I suggest searching for other dividend growth stocks if you're hunting for income stock ideas.
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Michael Douglass has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (The gap between the two can be explained by AbbVie taking a $4 billion impairment charge -- which impacts earnings, but not cash -- when it scrapped a major clinical drug in January.) Fortunately for AbbVie (at least in the short term), about three-quarters of Humira's sales are domestic, so most of its revenue is shielded from biosimilar competition for a few more years. But I think AbbVie (NYSE: ABBV) has too many problems right now. | But I think AbbVie (NYSE: ABBV) has too many problems right now. So, despite its 5% dividend yield, AbbVie isn't worth an investment today. Now, you might think my concern centers on the sustainability of AbbVie's dividend. | Plus, if you measure the dividend by the cash dividend payout ratio (that is, dividing dividends paid by operating cash flow minus capital expenditures), AbbVie achieves a 46% ratio -- a sign that the company's dividend is quite well funded by cash. Although Humira's $19.9 billion in 2018 sales undoubtedly represented its high-water mark, there's still plenty of money to be made over the next few years before biosimilar competition decimates Humira in the U.S. AbbVie has a plan AbbVie is attempting to use that time constructively -- in part by switching patients from Humira to new drug Skyrizi, which was approved in April to treat psoriasis. Yet, when you compare the perhaps $11.5 billion in combined annual revenue these two drugs could potentially bring in years down the road if everything goes well to Humira's $19.9 billion in sales last year...well...there's still a massive gaping hole in AbbVie's prospects for growth (or even stability) . | Plus, if you measure the dividend by the cash dividend payout ratio (that is, dividing dividends paid by operating cash flow minus capital expenditures), AbbVie achieves a 46% ratio -- a sign that the company's dividend is quite well funded by cash. Fortunately for AbbVie (at least in the short term), about three-quarters of Humira's sales are domestic, so most of its revenue is shielded from biosimilar competition for a few more years. Yet, when you compare the perhaps $11.5 billion in combined annual revenue these two drugs could potentially bring in years down the road if everything goes well to Humira's $19.9 billion in sales last year...well...there's still a massive gaping hole in AbbVie's prospects for growth (or even stability) . |
24993.0 | 2019-05-22 00:00:00 UTC | 3 Top Dividend Stocks With Yields Over 5% | ABBV | https://www.nasdaq.com/articles/3-top-dividend-stocks-yields-over-5-2019-05-22 | nan | nan | High dividend yields are harder to find lately, given the long-running stock market rally. But that scarcity doesn't mean investors have to sacrifice quality to stretch for higher income rates.
Below, we'll look at a few dividend stocks that pay over 5% today, but still look attractive as business investments. Read on to see why Ford (NYSE: F), AbbVie (NYSE: ABBV), and Six Flags (NYSE: SIX) all deserve a spot on your income watchlist.
Image source: Getty Images.
A cheap, juicy dividend stock
Daniel Miller (Ford Motor Company): It's been a bumpy road for Ford investors over the past couple of years as the company failed to capitalize on the momentum it gained in the years following the past recession. While new-vehicle sales in North America have plateaued, and sales growth in China has also slumped, Ford trades at a cheap P/E of 13 -- suggesting much of the negativity is priced in -- and offers investors a valuable 5.74% dividend yield.
Investors and analysts were frustrated with Ford's lack of a timely, concise, and compelling turnaround plan, but that doesn't mean management wasn't trying to fix the company's problems. Ford reduced its vehicle complexity, prioritized higher-margin markets, reduced structural costs, and improved or eliminated unprofitable products.
In China, where Ford has really struggled over the past year, it developed plans to launch more than 50 new products by 2025.
And on Monday, May 20, the company announced it would part ways with 7,000 white-collar workers globally, roughly 10% of its global workforce. The move will save roughly $600 million annually. And while layoffs are never an enjoyable topic, for investors it shows the company is trying to reduce bureaucracy and improve decision-making, along with cutting costs.
That 5.74% dividend yield is enticing, especially if much of the negativity is priced into the stock, but long-term investors will need to see a compelling strategy with driverless vehicles, smart mobility projects, and electrified vehicles. So far, Ford appears a step behind crosstown rival General Motors in those key projects. Although Ford's recent $500 million investment in start-up Rivian -- a partnership to build an all-new battery electric vehicle on Rivian's flexible platform -- is a glimmer of hope that the automaker is about to double down on developing the future products it needs.
If Ford can indeed catch GM with driverless and electric vehicle technology, while continuing to produce in-demand and highly profitable trucks and SUVs, it's an enticing dividend stock to own.
No love for this big pharma company
Nicholas Rossolillo (AbbVie): The first quarter of 2019 was just OK for AbbVie. Investors have grown accustomed to double-digit growth since the pharmaceuticals company was spun off of Abbott Laboratories in 2013, so the 1.3% year-over-year decline in revenue and 5.2% decline in earnings wasn't exactly exciting news.
The challenges for AbbVie surround its marquee autoimmune disorder treatment Humira, which is facing competition from biosimilar treatments overseas after its patent expired. As a result, AbbVie's stock has fallen 18% since the start of 2018 and over 30% from its all-time high. The upshot is that shares are now yielding a cool 5.4% annually.
But AbbVie is more than a simple dividend play. The next few years could be challenging as the biopharmaceutical company works to diversify its sales to supplement Humira. AbbVie has a promising pipeline -- including a new treatment for rheumatoid arthritis that could surpass Humira's results in that fight. On the financial front, things don't look so bad, either. Adjusted earnings are expected to rise this year by double digits, and rose 14.4% during the first quarter in spite of lackluster sales.
AbbVie's days of blockbuster sales are over for the time being, but the stock is far from dead. While investors wait for a rebound in revenue, a dividend north of 5% is a pretty good consolation prize.
Strap in and enjoy the ride
Demitri Kalogeropoulos (Six Flags): Regional theme park specialist Six Flags represents an attractive buy for income investors. In 2018, the company logged its 10th straight year of record operating results, and yet it still pays a hefty dividend that right now yields over 6%.
Image source: Getty Images.
Theme park businesses have a few risks that are important to understand before considering owning a company like Six Flags or its rival Cedar Fair. Operating results tend to drop, but not crater, during economic downturns, and there's intense seasonality that can make it hard to predict sales in any given year. A full 75% of Six Flags' revenue comes in the second and third quarters around the summer season in North America, and poor weather or competitive challenges in that short window can have an outsize influence on full-year results.
But Six Flags has navigated those challenges well in the past decade. Improved guest experiences have helped it win more season-pass sales, and per capita park spending reached new highs. Membership programs account for just 20% of ticket revenue today, leaving plenty of room for growth. Finally, management is excited about long-term licensing opportunities in emerging markets, which today barely move the needle at 3% of revenue. Put together, these options give Six Flags many avenues toward expanding the business over the next few years.
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Daniel Miller owns shares of Ford. Demitrios Kalogeropoulos has no position in any of the stocks mentioned. Nicholas Rossolillo owns shares of Ford. The Motley Fool recommends Cedar Fair. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Read on to see why Ford (NYSE: F), AbbVie (NYSE: ABBV), and Six Flags (NYSE: SIX) all deserve a spot on your income watchlist. No love for this big pharma company Nicholas Rossolillo (AbbVie): The first quarter of 2019 was just OK for AbbVie. The challenges for AbbVie surround its marquee autoimmune disorder treatment Humira, which is facing competition from biosimilar treatments overseas after its patent expired. | Read on to see why Ford (NYSE: F), AbbVie (NYSE: ABBV), and Six Flags (NYSE: SIX) all deserve a spot on your income watchlist. No love for this big pharma company Nicholas Rossolillo (AbbVie): The first quarter of 2019 was just OK for AbbVie. The challenges for AbbVie surround its marquee autoimmune disorder treatment Humira, which is facing competition from biosimilar treatments overseas after its patent expired. | Read on to see why Ford (NYSE: F), AbbVie (NYSE: ABBV), and Six Flags (NYSE: SIX) all deserve a spot on your income watchlist. No love for this big pharma company Nicholas Rossolillo (AbbVie): The first quarter of 2019 was just OK for AbbVie. The challenges for AbbVie surround its marquee autoimmune disorder treatment Humira, which is facing competition from biosimilar treatments overseas after its patent expired. | Read on to see why Ford (NYSE: F), AbbVie (NYSE: ABBV), and Six Flags (NYSE: SIX) all deserve a spot on your income watchlist. No love for this big pharma company Nicholas Rossolillo (AbbVie): The first quarter of 2019 was just OK for AbbVie. The challenges for AbbVie surround its marquee autoimmune disorder treatment Humira, which is facing competition from biosimilar treatments overseas after its patent expired. |
24994.0 | 2019-05-21 00:00:00 UTC | Better Buy: AbbVie vs. Pfizer | ABBV | https://www.nasdaq.com/articles/better-buy%3A-abbvie-vs.-pfizer-2019-05-21 | nan | nan | Over the last five years, AbbVie (NYSE: ABBV) and Pfizer (NYSE: PFE) have both produced market-crushing returns for investors -- that is, when their top-notch dividends are figured into the equation. This year, however, hasn't exactly been kind to either company. Key patent expires and the drug pricing controversy have weighed on both of these elite pharma stocks over the course of 2019.
Which of these top drugmakers has a better shot at returning to form? Let's take a deeper look at each company to find out.
Image source: Getty Images.
The case for AbbVie
AbbVie is a company on the cusp of a major metamorphosis. The company's flagship arthritis medication Humira is now facing competition from copycat versions in Europe and its patent protection is set to end in the U.S. in 2023. As a result, investors lately have been largely shying away from this former star, causing the drugmaker's shares to tumble by a whopping 11.4% in 2019.
This blanket opposition to AbbVie, though, may not be warranted. The company already has a promising hematologic oncology franchise consisting of the two rising stars Imbruvica and Venclexta. Moreover, the drugmaker grabbed a key regulatory approval for its next-generation immunoncology drug Skyrizi last month, and the rheumatoid arthritis candidate, upadacitinib, should also get a green light from the Food and Drug Administration in the third quarter of this year. Topping it off, AbbVie launched a new, high-value endometriosis drug, Orilissa, last year as well. The drugmaker thus has five potential megablockbusters that should more than offset Humira's loss of exclusivity.
Unfortunately, AbbVie's business development and clinical activities designed to carry it past Humira's decline have come at a steep cost. At the end of the most recent quarter, for example, the company only had $5.23 billion in cash but an eye-popping $37.1 billion in debt. AbbVie, therefore, doesn't have much room to maneuver in terms of future business development activities.
AbbVie's super-aggressive dividend program -- that's culminated in a sky-high yield of 5.39% -- also appears to be running out of steam. While the drugmaker has raised its dividend by a stellar 20.6% every year for the last five years, its trailing payout ratio of 110% strongly implies that this trend won't continue.
The case for Pfizer
Pfizer is a company in transition. The drug giant reorganized itself into three largely independent units at the start of 2019: an innovative biopharma and biosimilar segment, an Upjohn off-patent drug business headquartered in China, and a consumer healthcare segment that's set to be combined with GlaxoSmithKline's unit and subsequently spun off into a separate entity.
Looking ahead, the drugmaker seems poised to carve out its Upjohn generic drug business into a stand-alone segment as well. Such a move would unlock the tremendous growth occurring in the company's branded medication and biosimilar segment. The generic drug space, after all, has been in steady decline over the past four years due to pricing challenges in the United States. Packaging this generic unit into a separate entity would also further shield the company's top line from the upcoming loss of exclusivity for the megablockbuster nerve pain medication Lyrica.
Keeping with this theme, Pfizer's top-notch clinical pipeline has brought numerous high-growth products to market over the last few years, such as the blood thinner Eliquis, breast cancer medication Ibrance, pneumococcal disease vaccine Prevnar 13, and anti-inflammatory treatment Xeljanz, among others. These burgeoning drugs have been posting double-digit sales growth across the board, but their collective impact has been blunted to a large degree by the company's flagging legacy drug and consumer healthcare segments.
On the financial side of the equation, Pfizer's balance sheet isn't in the greatest shape. With a total debt-to-equity ratio of 65.8 and less than $12 billion in cash, the company's deal-making capacity isn't what it was a few years ago. Then again, Pfizer has already tacked on several value-adding units over the past few years with the acquisitions of Anacor Pharmaceuticals, Hospira, and Medivation. Pfizer, in turn, probably won't be a big player on the mergers-and-acquisition scene anytime soon, either.
With a forward-looking dividend yield of 3.55%, Pfizer does offer a moderately above-average payout for a big pharma stock. However, the company's trailing payout ratio of 70.7% and the uncertainty that comes with a major restructuring both suggest that further increases to the dividend may not be in the cards for a while. In fact, Pfizer's dividend has only grown by an anemic 6.72% per year over the last five years, which is one of the lowest dividend growth rates in the large-cap biopharma space over this period.
Verdict
Both of these elite pharma stocks will more than likely turn out to be big winners at the end of the day. Pfizer has an impressive cohort of new growth products in hand and a feasible plan in place to realize their full value for shareholders. AbbVie, for its part, has also built out a strong group of products capable of delivering strong levels of revenue growth in the company's post-Humira era.
Which stock is the better buy? From a risk-to-reward perspective, Pfizer is the hands-down winner in this comparison. The simple reason is that Pfizer isn't overly reliant on any one product for top-line growth, whereas AbbVie arguably needs its rheumatoid arthritis candidate to get off to a blistering start to assuage the market's fears over Humira. That may not be fair, but the market has already shown that it doesn't believe in AbbVie's real-world ability to keep growing once Humira loses patent protection in the U.S.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Over the last five years, AbbVie (NYSE: ABBV) and Pfizer (NYSE: PFE) have both produced market-crushing returns for investors -- that is, when their top-notch dividends are figured into the equation. The case for AbbVie AbbVie is a company on the cusp of a major metamorphosis. This blanket opposition to AbbVie, though, may not be warranted. | Unfortunately, AbbVie's business development and clinical activities designed to carry it past Humira's decline have come at a steep cost. Over the last five years, AbbVie (NYSE: ABBV) and Pfizer (NYSE: PFE) have both produced market-crushing returns for investors -- that is, when their top-notch dividends are figured into the equation. The case for AbbVie AbbVie is a company on the cusp of a major metamorphosis. | The simple reason is that Pfizer isn't overly reliant on any one product for top-line growth, whereas AbbVie arguably needs its rheumatoid arthritis candidate to get off to a blistering start to assuage the market's fears over Humira. That may not be fair, but the market has already shown that it doesn't believe in AbbVie's real-world ability to keep growing once Humira loses patent protection in the U.S. 10 stocks we like better than Pfizer When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Over the last five years, AbbVie (NYSE: ABBV) and Pfizer (NYSE: PFE) have both produced market-crushing returns for investors -- that is, when their top-notch dividends are figured into the equation. | Over the last five years, AbbVie (NYSE: ABBV) and Pfizer (NYSE: PFE) have both produced market-crushing returns for investors -- that is, when their top-notch dividends are figured into the equation. The case for AbbVie AbbVie is a company on the cusp of a major metamorphosis. This blanket opposition to AbbVie, though, may not be warranted. |
24995.0 | 2019-05-21 00:00:00 UTC | 3 Top Dividend Stocks to Buy Right Now | ABBV | https://www.nasdaq.com/articles/3-top-dividend-stocks-buy-right-now-2019-05-21 | nan | nan | There's nothing easy about selecting a dividend stock, especially when the market is trading near all-time highs, as it is now. But if you dig deep enough, you can find some great opportunities that combine high yields and compelling investment opportunities. Three that you should be looking at right now, according to these three Motley Fool contributors, are cellphone giant Verizon (NYSE: VZ), global drugmaker AbbVie (NYSE: ABBV), and utility bellwether Southern Company (NYSE: SO). They aren't exactly set-and-forget investments, but for a little extra work, you'll get a lot of extra yield.
A big payout from a market leader
Brian Stoffel (Verizon): While I don't own shares of Verizon myself, that's largely because I still have over three decades until retirement comes calling. But if my golden years were right around the corner, this company would be at the top of my list.
Image source: Getty Images.
There are three very simple reasons for this. First, only a few players dominate the telecom space because the costs of building the infrastructure to connect the country are massive. The chance of an upstart disrupting the field -- while possible -- is very slim. By keeping an eye on AT&T and T-Mobile, you can have a pretty good idea where Verizon stands.
Which brings me to my second point: Verizon is the leader in its industry. It has the highest market share of mobile plans in America, and it was the first to market with 5G technology. As a result, it will likely be able to charge more for its plans, and open the door to more Internet of Things (IoT) revenue.
And third, the dividend is big and sustainable. Currently yielding 4.2%, Verizon's dividend has only eaten up 54% of the company's free cash flow over the past year. That means the payout is very safe, and there's even room for it to go up in the long run.
A falling knife worth catching
George Budwell (AbbVie): AbbVie, a dividend aristocrat, has suddenly turned into a falling knife. The loss of exclusivity for its flagship anti-inflammatory medication Humira in Europe, a major setback in immuno-oncology with Rova-T, and the steady decline in its hepatitis C franchise have all conspired to drive the drugmaker's shares down by a whopping 30% over the last 12 months. However, this steep sell-off might represent an extremely attractive entry point for income and value investors alike.
After this sharp downturn, AbbVie's shares now sport a ginormous 5.4% yield and are trading at a rock-bottom 8.4 times forward-looking earnings. That's a rare combination for a top pharma stock, implying that the market has been far too harsh on the company. The market, in effect, is saying that it won't be able to overcome Humira's eventual demise as the world's top-selling drug. This dire outlook, though, flies in the face of the facts.
Why should investors give AbbVie a second chance? The biotech's hematologic oncology portfolio -- consisting of Imbruvica and Venclexta --has been performing beyond expectations this year. And the recent approval of Skyrizi for moderate to severe plaque psoriasis gives AbbVie yet another major growth driver to power past Humira's patent cliff. The company could also receive another big boost from the approval of upadacitinib for rheumatoid arthritis in the third quarter of this year.
AbbVie has built a healthy portfolio of new products capable of keeping its growth engine humming along at full speed. The market will want solid proof of this thesis once Humira goes off patent globally, but the risk of a moderate drop-off in sales early in the next decade seems to be priced in at these bargain-basement levels.
A clearer path to completion
Reuben Gregg Brewer (Southern Company): At 4.6%, Southern's dividend yield sits at the high end of the utility spectrum. The reason is that it has been having some troubles getting big projects over the finish line. First, it had to give up on carbon capture technology it helped create for a coal plant (it eventually converted the plant to natural gas). And, perhaps more troubling, it has been forced to take operational control of a nuclear project that has faced delays, cost overruns, and the bankruptcy of Westinghouse, the original contractor.
SO Dividend Yield (TTM) data by YCharts.
To make matters worse, Southern still has a couple of years of heavy lifting (and spending) before its nuclear ambitions are realized. The planned start dates for the two nuclear units it's building are November 2021 and November 2022. However, it just completed a review of these projects, known as Vogtle 3 and 4, and it looks like it has built up a six-month cushion to deal with any problems that might arise. If there are no more troubles, then the units could actually come on line early.
As investors get more comfortable with the improving results at the Vogtle builds, they are likely to feel more comfortable with Southern's stock. (Southern is much more than just the Vogtle project.) And that, in turn, could lead to higher prices and a lower yield. Although there's still a lot of work to be done, all indications are that Southern has gotten this project back on track. That makes now a good time to jump on the fat yield it's offering today.
Brian Stoffel has no position in any of the stocks mentioned. George Budwell owns shares of AbbVie. Reuben Gregg Brewer owns shares of Southern Company. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And the recent approval of Skyrizi for moderate to severe plaque psoriasis gives AbbVie yet another major growth driver to power past Humira's patent cliff. Three that you should be looking at right now, according to these three Motley Fool contributors, are cellphone giant Verizon (NYSE: VZ), global drugmaker AbbVie (NYSE: ABBV), and utility bellwether Southern Company (NYSE: SO). A falling knife worth catching George Budwell (AbbVie): AbbVie, a dividend aristocrat, has suddenly turned into a falling knife. | Three that you should be looking at right now, according to these three Motley Fool contributors, are cellphone giant Verizon (NYSE: VZ), global drugmaker AbbVie (NYSE: ABBV), and utility bellwether Southern Company (NYSE: SO). A falling knife worth catching George Budwell (AbbVie): AbbVie, a dividend aristocrat, has suddenly turned into a falling knife. After this sharp downturn, AbbVie's shares now sport a ginormous 5.4% yield and are trading at a rock-bottom 8.4 times forward-looking earnings. | Three that you should be looking at right now, according to these three Motley Fool contributors, are cellphone giant Verizon (NYSE: VZ), global drugmaker AbbVie (NYSE: ABBV), and utility bellwether Southern Company (NYSE: SO). A falling knife worth catching George Budwell (AbbVie): AbbVie, a dividend aristocrat, has suddenly turned into a falling knife. After this sharp downturn, AbbVie's shares now sport a ginormous 5.4% yield and are trading at a rock-bottom 8.4 times forward-looking earnings. | Why should investors give AbbVie a second chance? Three that you should be looking at right now, according to these three Motley Fool contributors, are cellphone giant Verizon (NYSE: VZ), global drugmaker AbbVie (NYSE: ABBV), and utility bellwether Southern Company (NYSE: SO). A falling knife worth catching George Budwell (AbbVie): AbbVie, a dividend aristocrat, has suddenly turned into a falling knife. |
24996.0 | 2019-05-19 00:00:00 UTC | Top 5 New Drug Launches of 2019 -- and the Biotech Stocks That Could Win Big | ABBV | https://www.nasdaq.com/articles/top-5-new-drug-launches-2019-and-biotech-stocks-could-win-big-2019-05-19 | nan | nan | Every year, biopharmaceutical companies introduce new drugs to the market. Some of these drugs become big winners. Others don't.
Market research company EvaluatePharma analyzed all of the drugs that could launch in 2019. The company then projected how much each drug could potentially generate by 2024. Alexion Pharmaceuticals (NASDAQ: ALXN), AbbVie (NYSE: ABBV), Aimmune Therapeutics (NASDAQ: AIMT), and bluebird bio (NASDAQ: BLUE) came out on top in EvaluatePharma's ranking of the top five new drug launches expected this year. Here are the drugs that made the list.
Image source: Getty Images.
1. Ultomiris (Alexion)
EvaluatePharma thinks that the top new drug launched this year will be Alexion's Ultomiris. The drug received FDA approval earlier than expected in December for treating adults with ultra-rare blood disorder paroxysmal nocturnal hemoglobinuria (PNH).
Ultomiris could reach sales of nearly $3.5 billion by 2024, according to EvaluatePharma's projections. It's off to a good start: Alexion reported sales for the drug of $24.6 million in the first quarter.
2. Upadacitinib (AbbVie)
AbbVie's upadacitinib is expected to be the No. 2 new drug launched in 2019. EvaluatePharma thinks the drug could generate sales approaching $2.2 billion by 2024.
The Food and Drug Administration (FDA) is expected to make an approval decision for upadacitinib in treating rheumatoid arthritis in the third quarter of 2019. That could be the the first of several approved indications. AbbVie is also evaluating upadacitinib in late-stage clinical studies targeting atopic dermatitis, Crohn's disease, psoriatic arthritis, and ulcerative colitis.
3. Risankizumab (AbbVie)
Upadacitinib wasn't AbbVie's only immunology drug to make EvaluatePharma's top five list. Risankizumab ranks third with projected 2024 sales of more than $2 billion.
AbbVie won FDA approval for risankizumab in April for treating plaque psoriasis, and the company launched the drug under the brand name Skyrizi earlier this month. AbbVie CEO Rick Gonzalez said in the company's Q1 conference call that Skyrizi should have "more than 50% commercial access by the end of July." That would reflect broad access to the market achieved more quickly than any other psoriasis drug in recent history. AbbVie expects sales for Skyrizi of around $150 million this year.
4. LentiGlobin (Bluebird)
EvaluatePharma thinks that gene therapy LentiGlobin could rake in nearly $1.9 billion by 2024. Bluebird expects European approval for the drug in treating transfusion-dependent beta-thalassemia (TDT) in the second quarter of 2019. Assuming the drug wins approval, the biotech will launch it under the brand name Zynteglo.
An even bigger market opportunity shouldn't be too far behind. Bluebird plans to file for U.S. approval of LentiGlobin by the end of the year.
5. AR101 (Aimmune)
Aimmune's peanut allergy drug AR101 looks like another big winner in EvaluatePharma's estimation. The market research company projects that the drug could pull in almost $1.8 billion by 2024.
However, EvaluatePharma might be a little too optimistic about AR101 launching this year. Aimmune CEO Jayson Dallas said in the company's Q1 conference call that a filing for European approval of the drug is expected in mid-2019. He added that the FDA's review of AR101 could potentially take until January 2020.
Are the stocks good picks?
You might think that with blockbuster drugs either already on the market or likely on the way soon, these biotech stocks would be good picks right now. And you'd be right, in my opinion.
Alexion's Ultomiris should be a great successor to the company's older blockbuster PNH drug Soliris. Sales for AbbVie's top-selling drug Humira are beginning to slip, but Skyrizi and upadacitinib, along with the company's other newer drugs and pipeline candidates, should enable the company to continue growing.
Bluebird also has a very strong pipeline. In addition to LentiGlobin/Zynteglo, the biotech has another promising gene therapy in late-stage development with Lenti-D. Bluebird is also working with Celgene on developing cancer cell therapies ide-cel and bb21217.
All of Aimmune's hopes are riding on AR-101 right now. But with tremendous sales potential for the drug and Aimmune's market cap of only $1.3 billion, I think the stock looks attractive.
10 stocks we like better than Alexion Pharmaceuticals
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Keith Speights owns shares of AbbVie and Celgene. The Motley Fool owns shares of and recommends Bluebird Bio and Celgene. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AbbVie is also evaluating upadacitinib in late-stage clinical studies targeting atopic dermatitis, Crohn's disease, psoriatic arthritis, and ulcerative colitis. AbbVie won FDA approval for risankizumab in April for treating plaque psoriasis, and the company launched the drug under the brand name Skyrizi earlier this month. Alexion Pharmaceuticals (NASDAQ: ALXN), AbbVie (NYSE: ABBV), Aimmune Therapeutics (NASDAQ: AIMT), and bluebird bio (NASDAQ: BLUE) came out on top in EvaluatePharma's ranking of the top five new drug launches expected this year. | Risankizumab (AbbVie) Upadacitinib wasn't AbbVie's only immunology drug to make EvaluatePharma's top five list. Alexion Pharmaceuticals (NASDAQ: ALXN), AbbVie (NYSE: ABBV), Aimmune Therapeutics (NASDAQ: AIMT), and bluebird bio (NASDAQ: BLUE) came out on top in EvaluatePharma's ranking of the top five new drug launches expected this year. Upadacitinib (AbbVie) AbbVie's upadacitinib is expected to be the No. | Alexion Pharmaceuticals (NASDAQ: ALXN), AbbVie (NYSE: ABBV), Aimmune Therapeutics (NASDAQ: AIMT), and bluebird bio (NASDAQ: BLUE) came out on top in EvaluatePharma's ranking of the top five new drug launches expected this year. Risankizumab (AbbVie) Upadacitinib wasn't AbbVie's only immunology drug to make EvaluatePharma's top five list. Sales for AbbVie's top-selling drug Humira are beginning to slip, but Skyrizi and upadacitinib, along with the company's other newer drugs and pipeline candidates, should enable the company to continue growing. | Risankizumab (AbbVie) Upadacitinib wasn't AbbVie's only immunology drug to make EvaluatePharma's top five list. Alexion Pharmaceuticals (NASDAQ: ALXN), AbbVie (NYSE: ABBV), Aimmune Therapeutics (NASDAQ: AIMT), and bluebird bio (NASDAQ: BLUE) came out on top in EvaluatePharma's ranking of the top five new drug launches expected this year. Upadacitinib (AbbVie) AbbVie's upadacitinib is expected to be the No. |
24997.0 | 2019-05-15 00:00:00 UTC | Health Care Sector Update for 05/15/2019: ABBV,ACB,ACB.TO,ECOR,IMGN | ABBV | https://www.nasdaq.com/articles/health-care-sector-update-for-05-15-2019%3A-abbvacbacb.toecorimgn-2019-05-15 | nan | nan | Top Health Care Stocks
JNJ +0.12%
PFE +1.36%
ABT +0.85%
MRK +0.39%
AMGN +1.38%
Health care stocks still were rising, with the NYSE Health Care Index adding almost 0.6% in value late Wednesday while shares of health care companies in the S&P 500 were up slightly more than 0.4% as a group. The Nasdaq Biotechnology index was climbing nearly 0.8% just before the closing bell.
Among health care stocks moving on news:
(+) AbbVie (ABBV) pushed higher this afternoon, erasing a more than 1% decline earlier in the session after the US Food and Drug Administration approved a combination of its Venclexta drug candidate with the obinutuzumab monoclonal antibody to treat previously untreated patients with chronic lymphocytic leukemia or small lymphocytic lymphoma. AbbVie will jointly commercialize the new drug combination with Roche Holdings' Genentech unit.
In other sector news:
(+) Aurora Cannabis (ACB) was 3% higher, turning around a 4% decline earlier in the session after the Canadian medical and recreational marijuana reported a four-fold increase in fiscal Q3 revenue, rising to CND65.1 million from CND16.1 million during the same quarter last year.
(-) electroCore (ECOR) plunged 29% on Wednesday. The medical device company reported a Q1 net loss of $0.47 per share, beating the Capital IQ consensus call expecting a $0.54 per share net loss, while net sales jumped to $409,600 from just $81,200 during the year-ago period but still lagged the $500,000 three-analyst mean.
(-) ImmunoGen (IMGN) was down 33% after the US Food and Drug Administration recommended the company conduct another phase III trial of its mirvetuximab soravtansine drug candidate in patients with high folate receptor alpha-positive, platinum-resistant ovarian cancer.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among health care stocks moving on news: (+) AbbVie (ABBV) pushed higher this afternoon, erasing a more than 1% decline earlier in the session after the US Food and Drug Administration approved a combination of its Venclexta drug candidate with the obinutuzumab monoclonal antibody to treat previously untreated patients with chronic lymphocytic leukemia or small lymphocytic lymphoma. AbbVie will jointly commercialize the new drug combination with Roche Holdings' Genentech unit. In other sector news: (+) Aurora Cannabis (ACB) was 3% higher, turning around a 4% decline earlier in the session after the Canadian medical and recreational marijuana reported a four-fold increase in fiscal Q3 revenue, rising to CND65.1 million from CND16.1 million during the same quarter last year. | Among health care stocks moving on news: (+) AbbVie (ABBV) pushed higher this afternoon, erasing a more than 1% decline earlier in the session after the US Food and Drug Administration approved a combination of its Venclexta drug candidate with the obinutuzumab monoclonal antibody to treat previously untreated patients with chronic lymphocytic leukemia or small lymphocytic lymphoma. AbbVie will jointly commercialize the new drug combination with Roche Holdings' Genentech unit. Health care stocks still were rising, with the NYSE Health Care Index adding almost 0.6% in value late Wednesday while shares of health care companies in the S&P 500 were up slightly more than 0.4% as a group. | Among health care stocks moving on news: (+) AbbVie (ABBV) pushed higher this afternoon, erasing a more than 1% decline earlier in the session after the US Food and Drug Administration approved a combination of its Venclexta drug candidate with the obinutuzumab monoclonal antibody to treat previously untreated patients with chronic lymphocytic leukemia or small lymphocytic lymphoma. AbbVie will jointly commercialize the new drug combination with Roche Holdings' Genentech unit. Health care stocks still were rising, with the NYSE Health Care Index adding almost 0.6% in value late Wednesday while shares of health care companies in the S&P 500 were up slightly more than 0.4% as a group. | Among health care stocks moving on news: (+) AbbVie (ABBV) pushed higher this afternoon, erasing a more than 1% decline earlier in the session after the US Food and Drug Administration approved a combination of its Venclexta drug candidate with the obinutuzumab monoclonal antibody to treat previously untreated patients with chronic lymphocytic leukemia or small lymphocytic lymphoma. AbbVie will jointly commercialize the new drug combination with Roche Holdings' Genentech unit. The Nasdaq Biotechnology index was climbing nearly 0.8% just before the closing bell. |
24998.0 | 2019-05-12 00:00:00 UTC | Is It Finally Time to Buy Gilead Sciences? | ABBV | https://www.nasdaq.com/articles/it-finally-time-buy-gilead-sciences-2019-05-12 | nan | nan | In 2014, Gilead Sciences (NASDAQ: GILD) revolutionized hepatitis C treatment with a new class of drugs that functionally cured the disease, virtually eliminating the risk of life-threatening liver failure. The drugs were so game-changing that they -- and the drugs that followed in their footsteps -- quickly became billion-dollar-per-year blockbusters, hauling in $20 billion in annualized sales at their peak.
Gilead Sciences' skyrocketing sales and profit made it one of biotech's best-performing stocks in 2015, but it's been a different story since then. Curing patients has shrunk the addressable market, and competition from AbbVie (NYSE: ABBV) has caused a profit-busting price war. As a result, Gilead Sciences' trailing 12-month revenue has dropped to $22 billion from about $33 billion in 2016 at its peak, and its share price has fallen to about $67 per share from highs over $120 in the summer of 2015. So far, the company's struggled to replace declining hepatitis C revenue, but Gilead Sciences' first-quarter financials suggest its struggle may be ending. If so, it could be a good time to buy its shares again.
IMAGE SOURCE: GETTY IMAGES.
Finding a floor
Gilead Sciences makes most of its money marketing HIV drugs, and it's launched a slate of new HIV therapies that are helping increase HIV revenue. The strength of its HIV products, however, has been more than offset by declining hepatitis C revenue, up until now.
In the first quarter, HIV revenue grew 14% year over year, to $3.6 billion, an increase that was largely due to Biktarvy and strong U.S. sales. A three-drug combination therapy, Biktarvy racked up $793 million in sales last quarter, up from $35 million in Q1 2018, which contributed to a U.S. HIV revenue increase of 19% year over year to $2.8 billion.
That performance, plus growing demand for Yescarta, a non-Hodgkin lymphoma gene therapy, more than offset a 24% drop in the company's hepatitis C sales. Yescarta sales were $96 million in Q1, more than double the $40 million reported one year ago.
Overall, Gilead Sciences' revenue inched up 3.7% year over year to $5.3 billion, marking the first year-over-year growth management reported in three years. A return to revenue growth resulted in adjusted earnings per share of $1.76 in the quarter, up a healthy 18.9% from the first quarter of 2018.
More to come?
Gilead Sciences named former Roche Holdings veteran Daniel O'Day as CEO in March, and CFO Robin Washington announced she'll be leaving the company early next year. O'Day is just getting acclimated and Washington is on the way out, but they still struck an optimistic tone on the company's quarterly conference call, and that's encouraging.
O'Day announced that Kite Pharma will operate as a separate business, led by its own to-be-named CEO. In O'Day's words, that move will give it more autonomy to "foster agility, innovation, and entrepreneurialism," something he feels is key to Gilead's long-term goal to become a leader in cancer treatment.
Management also reminded investors that it has a shot of adding another drug to its product lineup soon. Following positive results from phase 3 trials evaluating filgotinib, a selective JAK-inhibitor licensed from Galapagos, the company plans to file for European approval in rheumatoid arthritis later this year. Gilead Sciences aims to meet with the FDA to determine a timeline for a U.S. filing this year, and trials are ongoing that could pave the way for filgotinib's use in other inflammatory disorders, too.
In addition, data from a mid-stage trial evaluating a combination of drugs for non-alcoholic steteohepatitis, an increasingly common cause of liver transplant, is expected later this year. Results from a study of KTE-X19, a gene therapy targeting relapsed/refractory mantle cell lymphoma, are also on tap in 2019. A win in NASH could inform future trials that enable Gilead Sciences to secure a foothold in what could be a major market someday, while a win for KTE-X19 could result in an FDA application for approval in the fourth quarter of 2019.
IMAGE SOURCE: GETTY IMAGES.
Is it time to buy?
Investors shouldn't expect much top-line growth in 2019, because Gilead Sciences is guiding for net product sales of only between $21.3 billion and $21.8 billion, roughly unchanged from net product sales of $21.7 billion in 2018. Nevertheless, there's reason for optimism.
Gilead Sciences is making headway with payers, including Medicare and Medicaid, to increase access to Yescarta, which should help its sales continue higher over the coming year or two. KTE-X19 and filgotinib could begin generating meaningful revenue as early as 2020, if regulators cooperate.
If sales stabilize this year and then start growing again next year, then the company should kick off plenty of shareholder-friendly cash flow to fuel dividends, buybacks, and acquisitions. It already has over $30 billion in cash at its disposal, and last quarter it reaffirmed its commitment to returning money to shareholders by paying out $817 million in dividends and buying back $834 million of its stock.
Given Gilead Sciences' financial flexibility, the potential for new product launches in 2020, and arguably bargain-basement share prices, I think patient investors can begin buying shares again.
10 stocks we like better than Gilead Sciences
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Todd Campbell owns shares of Gilead Sciences. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Curing patients has shrunk the addressable market, and competition from AbbVie (NYSE: ABBV) has caused a profit-busting price war. In 2014, Gilead Sciences (NASDAQ: GILD) revolutionized hepatitis C treatment with a new class of drugs that functionally cured the disease, virtually eliminating the risk of life-threatening liver failure. Gilead Sciences named former Roche Holdings veteran Daniel O'Day as CEO in March, and CFO Robin Washington announced she'll be leaving the company early next year. | Curing patients has shrunk the addressable market, and competition from AbbVie (NYSE: ABBV) has caused a profit-busting price war. So far, the company's struggled to replace declining hepatitis C revenue, but Gilead Sciences' first-quarter financials suggest its struggle may be ending. Investors shouldn't expect much top-line growth in 2019, because Gilead Sciences is guiding for net product sales of only between $21.3 billion and $21.8 billion, roughly unchanged from net product sales of $21.7 billion in 2018. | Curing patients has shrunk the addressable market, and competition from AbbVie (NYSE: ABBV) has caused a profit-busting price war. A three-drug combination therapy, Biktarvy racked up $793 million in sales last quarter, up from $35 million in Q1 2018, which contributed to a U.S. HIV revenue increase of 19% year over year to $2.8 billion. Overall, Gilead Sciences' revenue inched up 3.7% year over year to $5.3 billion, marking the first year-over-year growth management reported in three years. | Curing patients has shrunk the addressable market, and competition from AbbVie (NYSE: ABBV) has caused a profit-busting price war. Following positive results from phase 3 trials evaluating filgotinib, a selective JAK-inhibitor licensed from Galapagos, the company plans to file for European approval in rheumatoid arthritis later this year. Given Gilead Sciences' financial flexibility, the potential for new product launches in 2020, and arguably bargain-basement share prices, I think patient investors can begin buying shares again. |
24999.0 | 2019-05-08 00:00:00 UTC | WisdomTree U.S. Quality Dividend Growth Fund Experiences Big Outflow | ABBV | https://www.nasdaq.com/articles/wisdomtree-u.s.-quality-dividend-growth-fund-experiences-big-outflow-2019-05-08 | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the WisdomTree U.S. Quality Dividend Growth Fund (Symbol: DGRW) where we have detected an approximate $73.6 million dollar outflow -- that's a 2.7% decrease week over week (from 63,800,000 to 62,100,000). Among the largest underlying components of DGRW, in trading today Apple Inc (Symbol: AAPL) is up about 0.3%, AbbVie Inc (Symbol: ABBV) is up about 0.3%, and Las Vegas Sands Corp (Symbol: LVS) is up by about 0.3%. For a complete list of holdings, visit the DGRW Holdings page » The chart below shows the one year price performance of DGRW, versus its 200 day moving average:
Looking at the chart above, DGRW's low point in its 52 week range is $35.85 per share, with $44.958 as the 52 week high point — that compares with a last trade of $43.23. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of DGRW, in trading today Apple Inc (Symbol: AAPL) is up about 0.3%, AbbVie Inc (Symbol: ABBV) is up about 0.3%, and Las Vegas Sands Corp (Symbol: LVS) is up by about 0.3%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the WisdomTree U.S. Quality Dividend Growth Fund (Symbol: DGRW) where we have detected an approximate $73.6 million dollar outflow -- that's a 2.7% decrease week over week (from 63,800,000 to 62,100,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of DGRW, in trading today Apple Inc (Symbol: AAPL) is up about 0.3%, AbbVie Inc (Symbol: ABBV) is up about 0.3%, and Las Vegas Sands Corp (Symbol: LVS) is up by about 0.3%. For a complete list of holdings, visit the DGRW Holdings page » The chart below shows the one year price performance of DGRW, versus its 200 day moving average: Looking at the chart above, DGRW's low point in its 52 week range is $35.85 per share, with $44.958 as the 52 week high point — that compares with a last trade of $43.23. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of DGRW, in trading today Apple Inc (Symbol: AAPL) is up about 0.3%, AbbVie Inc (Symbol: ABBV) is up about 0.3%, and Las Vegas Sands Corp (Symbol: LVS) is up by about 0.3%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the WisdomTree U.S. Quality Dividend Growth Fund (Symbol: DGRW) where we have detected an approximate $73.6 million dollar outflow -- that's a 2.7% decrease week over week (from 63,800,000 to 62,100,000). For a complete list of holdings, visit the DGRW Holdings page » The chart below shows the one year price performance of DGRW, versus its 200 day moving average: Looking at the chart above, DGRW's low point in its 52 week range is $35.85 per share, with $44.958 as the 52 week high point — that compares with a last trade of $43.23. | Among the largest underlying components of DGRW, in trading today Apple Inc (Symbol: AAPL) is up about 0.3%, AbbVie Inc (Symbol: ABBV) is up about 0.3%, and Las Vegas Sands Corp (Symbol: LVS) is up by about 0.3%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the WisdomTree U.S. Quality Dividend Growth Fund (Symbol: DGRW) where we have detected an approximate $73.6 million dollar outflow -- that's a 2.7% decrease week over week (from 63,800,000 to 62,100,000). For a complete list of holdings, visit the DGRW Holdings page » The chart below shows the one year price performance of DGRW, versus its 200 day moving average: Looking at the chart above, DGRW's low point in its 52 week range is $35.85 per share, with $44.958 as the 52 week high point — that compares with a last trade of $43.23. |
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