Amgen, Inc. (AMGN), DaVita HealthCare Partners Inc (DVA): Four Robust Investments in Dialysis and Diabetes

Merck & Co., Inc. (NYSE:MRK) paid Pfizer Inc. (NYSE:PFE) $60 million to initiate the partnership, and will split the revenue and costs on a 60/40 percent basis, respectively. The partnership should also draw attention away from Merck’s problems with Januvia, which is being investigated by the FDA due to claims that it could cause pancreatic cancer. Januvia accounted for $4 billion in Merck’s annual revenue last year.

The Foolish Bottom Line

Biotech investors need to be aware of the significance of the diabetes epidemic. 25 million Americans are currently diagnosed with diabetes, and the condition costs its patients more than $245 billion annually. That brings the yearly total cost per patient to $9,800, and that cost is likely to continue to rise unless Americans start to address the source of this debilitating condition.

Investors interested in this sector should pay attention to DaVita HealthCare Partners Inc (NYSE:DVA) and Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS)’ upcoming quarterly earnings to see how deep the upcoming Medicare reductions cut into their top lines. If the damage is less than expected, I believe investors should consider these two stocks as viable long-term investments. Meanwhile, Merck & Co., Inc. (NYSE:MRK) and Pfizer Inc. (NYSE:PFE) could generate billions in additional revenue if its co-developed SGLT2 inhibitor is approved.

It’s unfortunate for America, but I expect all four companies to continue reporting robust growth as long as diabetes rates rise.

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Four Robust Investments in Dialysis and Diabetes originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.