GlaxoSmithKline plc (ADR) (GSK), Roche Holding Ltd. (ADR) (RHHBY): Why Alex Rodriguez Could Bring Big Business to This Sector

Take Amgen, Inc. (NASDAQ:AMGN) for example. Amgen, Inc. (NASDAQ:AMGN), maker of erythropoietin-stimulating drugs designed to treat anemia in kidney dialysis and cancer patients, did developed a diagnostic test for its anemia drug, Aranesp. That wasn’t, however, until well after some coaxing from anti-doping agencies to do so and long after it actually sponsored a cycling event at a time when EPO (what Lance Armstrong used) was being abused within the cycling world.

This sector is welcoming tougher PED testing
While there could be some potential of lost sales for these drugmakers with regard to cheaters in these sports, the benefits of more stringent PED testing should more than outweigh these costs. For one, GlaxoSmithKline plc (ADR) (NYSE:GSK) and Roche Holding Ltd. (ADR) (OTCBB:RHHBY)’s collaborative efforts could translate into increased sales if they develop the diagnostic kit used to test athletes. Major League Baseball, especially, needs to step in with considerably tougher PED-testing regimens to restore faith in the sport with its fans. As these sports look to clean up their act, companies like GlaxoSmithKline plc (ADR) (NYSE:GSK) and Roche could shine.

In addition, the positive public image of working side-by-side with anti-doping agencies to clean up sports can provide an intangible market value that can’t be expressed in words. Just as consumers prefer to shop at stores they trust, or that are local, Roche Holding Ltd. (ADR) (OTCBB:RHHBY) and GlaxoSmithKline plc (ADR) (NYSE:GSK)’s collaboration with WADA adds a level of transparency not often seen from a pharmaceutical company which could help enhance shareholder value.

The article Why Alex Rodriguez Could Bring Big Business to This Sector originally appeared on Fool.com and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool has no position in any of the stocks mentioned.

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