(PFE) Archives - Page 9 of 45 - Mad Hedge Fund Trader

A Marathon, Not A Sprint

Navigating the stock market, where fortunes are made and lost faster than a New York minute, can be as exhilarating as it is nerve-wracking.

And when you're hunting for that quick win, that short-term stock buy that'll make your year, you realize you're playing a game where even the big guns like Warren Buffett don't always have the magic crystal ball.

But let's pivot a bit. What about when you're not sweating under a cash crunch — when you can afford to play the long game?

That's when you shift your sights to those long-term compounders, the kind that churn out robust returns on capital like a well-oiled machine. Here, initial valuations play second fiddle to the long-term prospects.

This is where Amgen (AMGN) struts onto the stage. It's not just any old player in the biotechnology and healthcare arena; it's a front-runner with a knack for keeping its coffers brimming and its profitability soaring.

In terms of therapeutic innovation, Amgen is a leader in the fields of oncology, inflammation, neurology, and pulmonary diseases. Their biosimilar practice is also on the rise, churning out replicas of blockbuster drugs like AbbVie’s (ABBV) Humira and Genentech’s (DNA) Herceptin.

Essentially, investing in Amgen is like finding a gold mine in your backyard – and then realizing there's oil under there, too.

Now, let's talk numbers because that's where the rubber meets the road. Amgen's moat-worthy drug franchises make it as solid as a rock for those seeking stability in their cash flows, especially when economic clouds are gathering.

And in the healthcare segment, it's akin to building your house on a rock – it withstands economic storms.

Amgen is known for its industry-leading profitability, flashing its A+ grade like a badge of honor. Their 11% return on total capital and a jaw-dropping 134% return on equity? That's not just good; it's like winning the financial Olympics.

Over the last decade, Amgen's total return of 218% didn't just outdo the S&P 500; it left peers like Pfizer (PFE), Roche (RHHBY), and Gilead (GILD) in the dust. Sure, AbbVie is still ahead, but that's mostly thanks to their Humira magic.

Fast forward to the present, and Amgen's showing no signs of slowing down.

Their total revenue shot up by 4% YoY to $6.9 billion in the third quarter, courtesy of a surge in volumes across their star products. We're talking double-digit growth in BLINCYTO, EVENITY, Repatha, and Nplate. This is like watching a relay race where every runner is Usain Bolt.

Peeking into the future, Amgen's pipeline is a treasure trove of potential.

The company has six first-in-class oncology assets and three FDA Breakthrough Therapy designations. Mirroring Novo Nordisk's (NVO) success with Ozempic, Amgen’s wrapped up Phase 2 studies for their obesity contender, Maridebart cafraglutide.

But here's where it gets even more interesting. Amgen's leap into multi-specific drugs, particularly with tumor treatment AMG 193, is like stepping into a sci-fi novel – it's groundbreaking, it's futuristic, and it just might revolutionize drug delivery.

Let's not forget the FDA's priority review of tarlatamab for small-cell lung cancer. This isn't just good news; it's a potential game-changer, a sign that Amgen might just be first across the finish line in this high-stakes race.

Of course, the recent acquisition of Horizon Therapeutics adds another feather to Amgen's cap, expanding its rare disease portfolio. The incoming drugs from this deal, including Tavneos, Tepezza, KRYSTEXXA, and UPLIZNA, are in the early stages of their lifecycle, making them ripe for growth.

However, every silver lining has a cloud. The integration of Horizon Therapeutics carries its own set of risks, and Amgen's legacy drugs like Enbrel and Otezla face the ticking clock of declining sales.

We also can’t gloss over the elephant in the room – Amgen's ballooning long-term debt, expected to hit a whopping $65 billion by year-end. The recent downgrade of Amgen's credit rating to BBB is like a cautious tap on the shoulder, a reminder to tread carefully.

But don't let that dampen your spirits. Amgen's 3.3% dividend yield is as solid as it comes, with management showing a vote of confidence with a 5.6% raise for the upcoming Q1 2024 payout.

The company's history of rewarding shareholders through share buybacks – a 19% reduction in share count over five years is nothing to scoff at either.

So, where does that leave Amgen's valuation? At a current price of $275 and a forward PE of 14.8, it's not exactly a bargain basement, but it's far from sky-high. It's in that sweet spot where quality meets value.

For long-term investors who value stability and growth, consider adding Amgen to your portfolio playbook.

December 12, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
December 12, 2023
Fiat Lux

Featured Trade:

(A REBOUNDING BLUE CHIP)

(PFE), (LLY), (NVO), (RHHBY), (AZN), (SGEN), (VKTX), (TERN), (GPCR), (ALT)

A Rebounding Blue Chip

Biotech Letter

In the maelstrom of 2023, Pfizer (PFE) found itself navigating through a tempest, much to the dismay of shareholders. The aftermath? A harrowing -40% total return loss, leaving shareholders reeling.

This downturn followed Pfizer's COVID-19 vaccine triumph, a success story that lost its sheen as global government demand for the vaccine and Paxlovid antiviral dwindled.

Looking back, Pfizer's narrative in 2023 could rival a Shakespearean tragedy. The demand dip for its COVID arsenal was just the beginning; a cascade of other factors compounded the company's misfortunes.

Take, for instance, the controversial $43 billion acquisition of Seagen (SGEN) in March. While this move aimed for cancer treatment breakthroughs, it was widely seen as a Hail Mary, signaling gaps in Pfizer's drug pipeline.

I estimate this strategy might have slashed shareholder value by at least 10%, given the immediate financial aftermath of the merger.

Then, adding to the woes, Pfizer's Nash County production facility in North Carolina faced devastation by a tornado in July.

It seemed as though, for Pfizer in 2023, trouble came not just in droves but in torrents.

The final blow? The discontinuation of the twice-daily dose development for Danuglipron, Pfizer's weight-loss drug candidate.

This decision casts a shadow over the prospects of its once-a-day dosage, still in trials, and simultaneously cracks open the door for other biotech players in the oral weight-loss drug arena.

Meanwhile, the company also aimed to join the race for obesity treatment innovation. In this arena, injectable weight-loss drugs from Eli Lilly (LLY) and Novo Nordisk (NVO) have set the stage, and now, the demand for oral solutions is burgeoning.

Pfizer once pegged this market's potential at an eye-watering $90 billion a year — a target that has not gone unnoticed by keen biotechs.

Yet, with Pfizer stepping back from its Danuglipron project due to adverse side effects, it finds itself trailing in this race. In comparison, Lilly and Novo are forging ahead with their products, turning Pfizer's stumble into a potential windfall for other biotech firms.

Notably, the biotech sector is witnessing a flurry of activity in response to Pfizer’s failed attempt.

Firms like Viking Therapeutics (VKTX), Terns Pharmaceuticals (TERN), Structure Therapeutics (GPCR), and Altimmune (ALT) have seen their share prices soar following their own positive trial results or strategic announcements.

The diverse approaches these biotechs are employing in their anti-obesity drug development have piqued investors’ interest.

In effect, speculation is rife about which one might emerge as a desirable acquisition target for Pfizer — and this speculation isn't without basis.

I previously shared that Roche Holding (RHHBY) recently acquired Carmot Therapeutics for $2.7 billion, and AstraZeneca (AZN) entered a licensing agreement with Eccogene.

With a history of significant acquisitions, Pfizer might well consider a similar path to address its challenges in the weight-loss pill sector.

Pfizer's journey through 2023 was a series of unfortunate events, to say the least. As we look to the future, questions about potential challenges in 2024 loom.

While major acquisitions seem unlikely in the wake of the Seagen deal, shareholder sentiment is fragile. The immediate risks for Pfizer include the possibility of a 2024 recession impacting sales and a generally bearish stock market, potentially keeping share prices around the $30 mark.

Historically, however, Pfizer has stood as a bastion of strength during recessions and bear markets.

Looking longer term, the specter of Medicare drug price negotiations looms large, threatening to dampen growth investor sentiment.

This challenge isn't unique to Pfizer; it's a cloud hovering over all of Big Pharma.

Yet, despite these formidable challenges, there's a sense that Pfizer's tumultuous 2023 journey might be approaching a pivotal turning point. Investor sentiment is at a nadir, marred by negative press and shareholder dissatisfaction, painting Pfizer as a stock currently out of favor.

As we look ahead into 2024, a cautious optimism emerges. Should Pfizer return to operational normalcy and continue to reduce its reliance on COVID-related sales — now a smaller part of its business — the company could reassert itself as a prime value and dividend player in the Big Pharma space.

For the resilient investor willing to delve into a bruised yet potentially rebounding blue-chip, Pfizer merits a closer examination. After a year where Murphy's Law seemed the only law, Pfizer stands as a beacon of resilience and a potential phoenix in the biotech and healthcare sector.

November 30, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 30, 2023
Fiat Lux

Featured Trade:

(A SLEEPER HIT IN THE BIOPHARMA WORLD)

(PFE), (LLY), (VTRS), (BNTX), (SEGN)

A Sleeper Hit In The Biopharma World

Biotech Letter

Eli Lilly's (LLY) recent strides in the weight-loss treatment market have made headlines, especially with Mounjaro, their diabetes drug doubling as a weight-loss medication. The real buzz began when Zepbound, another of Lilly’s offerings, got the green light for weight management.

These developments have propelled Lilly into a potentially profitable orbit, but let's not get carried away just yet. While this company’s stock has been climbing the ladder, partly priced in with the latest news, it's worth casting a wider net.

In the world of pharmaceuticals, opportunities abound, and sometimes the best catches are not the shiniest. Enter Pfizer (PFE), a familiar name that’s been a bit under the weather, stock-wise.

Pfizer's shares have taken a 40% hit this year, a response to the waning demand for their COVID-19 vaccine and treatment.

But let's not forget that we're shifting gears to a post-pandemic era, and such shifts in demand are part of the course. Add to this the impending loss of exclusivity on some of their key products, and you've got a recipe for some financial heartburn.

In 2023, Pfizer’s performance didn’t quite match up to the market, a stark contrast to its 2021 and 2022 glory days, driven by its COVID-19 portfolio. However, looking at Pfizer through the narrow lens of recent performance alone is like judging a book by its last chapter.

Let's rewind a bit. Pfizer took some bold steps in recent years, steps that have shaped its current narrative.

The big move was shedding its consumer health and off-patent drug business, Upjohn, which led to the creation of Viatris (VTRS). The goal? To sharpen focus on innovative pharmaceuticals.

Then came the historic collaboration with BioNTech (BNTX) on a COVID-19 vaccine, marking the first U.S. authorization for an mRNA-based vaccine and bringing in substantial revenue in 2021 and 2022.

Fast forward to 2023, and Pfizer's investment fruits are beginning to ripen. This year alone, it has launched seven new products, from Litfulo for alopecia areata to the RSV vaccine Abrysvo.

Pfizer's non-COVID revenue forecast is promising, projecting up to $84 billion by 2023.

But the plot thickens. Pfizer recently announced a $43 billion acquisition of Seagen (SEGN), an oncology-focused biotech. This isn’t just a new chapter for Pfizer; it’s a whole new book, potentially leading to groundbreaking developments in cancer treatment.

With these in mind, it’s reasonable to believe that Pfizer’s current stock-market blues are but a temporary cloud.

With 83 candidates in development and a robust pipeline, partly fueled by its COVID-19 success, a rebound is on the horizon.

The dividend yield, sitting pretty at 5.5%, along with a decade-long streak of increasing payouts, adds to Pfizer's charm as a long-term investment.

So, investors should see Pfizer’s current price not as a red flag but as a golden ticket – an opportunity to get in on the ground floor before the elevator goes up. Its revenue forecast doesn’t even include its COVID-19 products, which could continue to generate significant revenue, especially during flu season.

Now, back to Eli Lilly. Yes, its revenue has seen double-digit growth recently, and it has been facing the same headwinds as Pfizer. It’s important to note, though, that its valuation makes sense in the context of its current earnings and potential growth. That makes it difficult to truly make a fair comparison at this point.

But, if we're talking opportunity, Pfizer is the one that's looking like a hidden gem. To put it simply, it's all about opportunity cost.

Pfizer, at present, is the underdog with untapped potential. Investing in Pfizer now could mean reaping substantial rewards down the line.

I’m talking about a company with a proven track record, a solid pipeline, and a knack for innovation. And for its current valuation, Pfizer is a deal that's hard to pass up.

For investors willing to play the long game, this could be the moment to seize an opportunity that could pay dividends in the future.

November 21, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 21, 2023
Fiat Lux

Featured Trade:

(A PRESCRIPTION FOR CAUTION)

(VTRS), (PFE), (JNJ), (LLY), (BMY), (TEVA), (ABBV), (CVS)

A Prescription For Caution

Biotech Letter

In the rollercoaster world of pharmaceutical stocks, 2023 has been like riding the Cyclone at Coney Island – thrilling for some, nauseating for others.

Take Pfizer (PFE), for instance. It’s seen its stock take a nosedive by 43.4%. That’s the kind of drop that makes you check if your wallet’s still there. Then there’s Johnson & Johnson (JNJ), trailing behind with a 16.4% decline. Not as dramatic, but still enough to make your stomach lurch.

Meanwhile, there’s Eli Lilly (LLY), playing the hero as it rockets up by an extraordinary 66.8%, thanks to its new weight-loss drugs. At this point, investors are practically throwing ticker-tape parades.

However, even with Eli Lilly’s star performance, the S&P 500 Pharmaceuticals index still shows a downturn of 2.3%.

Now, as we've seen earnings reports trickle in, a trend has started to stick out: positive results aren’t shielding drugmakers from a sell-off. Look at Pfizer and Bristol Myers Squibb (BMY), both hovering near their 52-week lows.

Still, investors are giving the biotechnology and healthcare stocks the side-eye for several reasons.

The new Medicare drug-price negotiation program is like a strict parent setting a curfew – it’s potentially restricting pricing power for certain medications. Plus, as interest rates climb, the allure of high dividend yields is diminishing faster than my motivation to hit the gym.

In this skeptical market, however, there are some optimistic investors who are digging through the bargain bin, hoping to strike gold.

Enter Viatris (VTRS), trading at just 3.3 times earnings and boasting a 5.1% dividend yield. It sounds promising, but only a few brave souls are recommending a buy.

Basically, this situation with Viatris is pretty much like finding a designer shirt at a discount store – sure, it’s cheap, but will it fall apart after two washes? Let’s take a closer look.

Viatris’s backstory is a bit of a soap opera. Born from the merger of Mylan and Pfizer's Upjohn unit, it carries the baggage of Mylan's EpiPen pricing scandal.

Since rebranding, Viatris has been trying to find its footing. Despite a shiny new business plan, which involves selling off assets for a potential $9 billion, investor confidence remains shaky at best.

Notably, its decision to exit the biosimilars market, where heavy hitters like Teva Pharmaceutical Industries (TEVA) and AbbVie (ABBV) play ball, has been seen as a bold move. Considering the potential of that market, it felt like leaving a high-stakes poker game just when the chips were starting to stack up. And with CVS Health (CVS) eyeing this lucrative space, Viatris might find itself wishing it had stayed at the table.

These past months, investors have been capturing this drama through a meme – comparing 'adjusted Ebitda' to 'free cash flow' with images of Jennifer Aniston and Iggy Pop. It’s a cheeky way of saying that Viatris’s financial projections might be wearing rose-colored glasses.

Looking ahead, Viatris is aiming for $2.3 billion in free cash flow next year, buoyed by recent sales. But the big question is: can it turn these assets into growth, or will it continue its high-wire act?

Reviewing its recent moves and their effects on the market, the Viatris saga has turned into a cautionary tale for investors in the pharma world – it’s a reminder that sometimes the threat of a nosedive is as real as the thrill of a skyrocket.

So, what’s the takeaway for those of us with skin in the game?

It seems wise to keep our eyes peeled and not jump on any bandwagons too hastily. Viatris, amidst its strategic transformations and market challenges, is worth watching with a careful eye. While its cash flow looks steady through 2027, thanks to planned asset sales, the long-term picture is as clear as mud.

As we navigate the unpredictable waves of the pharmaceutical market this year, let’s remember – it’s not just about holding on for the ride. It’s about knowing when to get on, when to get off, and maybe, just maybe, when to enjoy the view from the sidelines with some popcorn in hand. I say hold off from buying Viatris shares at the moment.

October 31, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
October 31, 2023
Fiat Lux

Featured Trade:

(A SEA OF POSSIBILITIES)

(PFE), (MRNA), (NVAX)

A Sea of Possibilities

Biotech Letter

In the cutthroat world of pharmaceuticals, Pfizer (PFE) seems to be having a bit of a moment. And not the kind you'd want to experience yourself. With shares flirting dangerously close to their 52-week low, investors are left scratching their heads. Is this a rare stock market sale, or is Pfizer showing us warning signs?

Pfizer, a leader in the biotechnology and healthcare world, is currently wrestling with the whims of COVID-19 product sales, resulting in a not-so-insignificant 40.7% shrinkage in share value year to date. The Big Apple-based giant is feeling the heat, with revenues taking a hit and the company's crystal ball now showing a less rosy sales and profit forecast for 2023.

But let's not get lost in the sea of stock market blues. After all, Pfizer is no one-trick pony.

The company has actually been busy beefing up its portfolio with some promising assets. I’m talking Oxbryta for sickle cell disease and Nurtec ODT for those pesky migraine headaches. And let's not forget the potential show-stoppers in their pipeline: the respiratory syncytial virus vaccine Abrysvo and the mid-stage weight loss/diabetes drug Danuglipron. These could very well be the next big things in pharma.

Still, the numbers don't lie. Pfizer's second quarter showed a 54% year-over-year drop in revenue to $12.7 billion, and earnings per share took a 77% hit, plummeting to $0.41. And yes, there's the looming patent cliff, threatening to push 11 of its drugs, including heavy hitters like Eliquis, Ibrance, and Xeljanz, off the financial ledge by 2030.

But before you jump ship, consider this: Pfizer's not just sitting around waiting for the other shoe to drop. Aside from its potential blockbusters, it has a pipeline bursting at the seams with 90 programs, 23 of which are in the final stage of trials. And it’s planning to launch a whopping 19 new products in the next year and a half. Not too shabby, right?

Now, let's talk about FDA approvals. Pfizer's been collecting them like a kid collects baseball cards. Just recently, it added Velsipity for ulcerative colitis and a combination therapy for non-small-cell lung cancer to their collection. It's clear Pfizer is not just resting on its laurels.

In the vaccine arena, Pfizer, in collaboration with BioNTech (BNTX), is making waves with their combination vaccine trials. And they're not just dipping their toes in the water; they're diving in headfirst, ready to take on competitors like Moderna (MRNA) and Novavax (NVAX). It's another vaccine race, and Pfizer is in it to win it — again.

Then there's the $43 billion cherry on top: the acquisition of Seagen (SGEN). This move will inject some serious oncology magic into Pfizer's portfolio and contribute a hefty chunk of change to their revenue stream in the coming years.

Then, there’s the company’s dividend. Pfizer's not stingy when it comes to sharing the wealth. It has upped its quarterly dividend to $0.41 per share, marking 14 years of consecutive increases.

So, what's the verdict? Is Pfizer a sinking ship or a stock market treasure waiting to be discovered? The short-term might be a bit rocky, but Pfizer's long-term game looks strong. With a diversified portfolio, a robust pipeline, and a commitment to innovation, Pfizer is poised to ride out the storm and come out on top.

While the waters might be turbulent now, Pfizer's got the goods to navigate through and come out stronger on the other side. For the savvy investor with an eye on the future and a stomach for a bit of volatility, this pharma leader just might be the hidden gem you've been searching for. So, grab your financial compass and set your sights on Pfizer. It's time to dive in and discover the treasure that awaits.

October 24, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
October 24, 2023
Fiat Lux

Featured Trade:

(INNOVATION OVER EXPIRATION)

(ABBV), (ALPMY), (PFE), (BAX)

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