Pfizer Inc. (NYSE:PFE)
Pfizer’s stock has given a return of around 26% in the last year. This even surpassed the ~19% return estimated by the NYSE ARCA Pharmaceutical Index of large US and European pharmaceutical companies. This was mainly due to its strong portfolio of products and the company’s efforts to divest/spin-off its non-pharmaceutical segments to focus more on its core operations. Pfizer used the cash proceeds from these spin-offs towards its shareholder’s return via bigger dividends and share buybacks.
The company last month reported its Q4 12 and FY 2012 earnings which showed the reviving sales in the emerging markets. Its sales from the emerging markets increased ~17% q/q to ~$2.65 billion.
Talking about product pipeline, Pfizer has in its bag some recent approvals for new drugs which will help it in posting better sales figures in 2013. The most important of them is the blood clot preventer “Eliquis” that it has jointly developed with Bristol-Myers Squibb Co. The drug is already approved by Japan’s and Europe’s agencies for use on arterial fibrillation patients. In late December 2012, it was also approved by the US FDA, which will further open a bigger US market for this drug.
This was a great achievement by the company, since the approval was earlier denied twice by the FDA, and any further decision was expected only until March 2013. However, this early approval will help Pfizer to give a tough fight to its closest rival, Johnson & Johnson, which already has an approved drug for this category. Various analysts are forecasting annual sales of around $5 billion for Eliquis.
Along with this, Pfizer’s rheumatoid arthritis drug Xeljanz also got approval from the US regulator in November 2012. This is another strong growth point for the company, since this drug will enter the high volume RA treatment market, which accounts for ~$20 billion of sales annually. Xeljanz is expected to generate ~$2 billion of sales annually for Pfizer.
I am extremely positive about the company’s future performance, looking at its impressive pipeline of experimental drugs.
Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson last month posted its fourth-quarter and full year results for 2012. The company had sales of ~$17.6 billion for the quarter, which was an increase of around 8% year over year. However, the worldwide consumer sales for FY12 saw a decline of ~3% year over year at ~$14.4 billion, mainly due to the negative impact from currency fluctuations. Going forward, the short investors can expect some headwinds from the consumer segment looking at the stiff competition in this sector.
However, for the long investors, this stock presents a rosy picture. The company recently presented its blueprint to enhance growth for its Medical Devices & Diagnostics segment (MD&D). The MD&D segment got a boost via the acquisition of Synthes in 2012, which contributed ~8% to the worldwide operational sales growth.