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Sanofi SA (ADR) (SNY), Johnson & Johnson (JNJ), and Investing in Potential Blockbusters

Johnson & Johnson (NYSE:JNJ)

In the past two years, the company had launched several new drugs and indications like Zytiga, Xarelto, Edurant/Complera and Incivo that have played a key role. The prime focus of the investors has been on the commercial performance of these products. But the clinical data flow from the next wave of the company’s late-stage pipeline should gather increasing attention. The company’s key phase-3 pipeline products include canagliflozin, simeprevir, ibrutinib and Simponi IV. If successful, these products should help to sustain the pharma sales growth in the long run.

In late December, 2012 the FDA approved Zytiga’s label expansion to include pre-chemo prostate cancer, which is expected to help fuel the continued growth of the drug in 2013. Zytiga’s global sales for 2012 were about $961 million, and it should cross the $1 billion benchmark in 2013. On the other hand, the European Committee for Medicinal Products for Human Use (CHMP) recommended approval of Xarelto 2.5mg twice daily in combination with standard anti-platelet therapy for the prevention of atherothrombotic events, including myocardial infarction (MI), and cardiovascular death or stroke, in adults in the post ACS (acute coronary syndrome) setting. The approval of Xarelto from the European Medical Agency for the ACS is expected in the first-half of 2013, if materialized it could boost the sale to a new level. Although, FDA approval of Xarelto in the US is still foggy, but if approved this could be the next blockbuster drug of the company.

The product pipeline of the company has some promising drugs and it has been known to produce blockbusters in the past. This increases my faith in the upcoming products. Hence I’ll recommend a buy on the stock.

The bottom line

All the three stocks have robust pipelines and have loads of potential blockbuster drugs in their pocket. Sanofi SA (ADR) (NYSE:SNY) is increasing its tilt towards the rare drugs market and its subsidiary Genzyme can help conquer the same. Its products like Fabrazyme should be a blockbuster by the next year and an upgrade in ratings by Moody’s brings in faith in the long-term position of the company.

Novartis AG (ADR) (NYSE:NVS)’s drugs Zometa and Reclast should bring in some additional profitability to the company’s stock and the possibility of the peak sale of company’s drug LCZ696 makes me bullish about the stock.

As for Johnson & Johnson (NYSE:JNJ), its previous launches have started paying-off, Zytiga’s and Xarelto should be blockbusters soon and its future product pipeline could very well achieve the same.

The article Investing in Potential Blockbusters originally appeared on and is written by Shweta Dubey.

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