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Drug Roundup – May 21, 2012
There have been several noteworthy developments in the drug space recently, which will likely have a material impact on the companies in this sector and the markets they serve. Companies mentioned in this review include Bristol-Myers Squibb (BMY), Sanofi (SNY), Mylan Pharmaceuticals (MYL), Watson Pharmaceuticals (WPI), Teva Pharmaceutical (TEVA), Pfizer Inc. (PFE - Free Pifzer Stock Report), Amylin Pharmaceuticals (AMLN), AstraZeneca (AZN), and Merck & Co. (MRK - Free Merck Stock Report).
Mylan Now Selling Generic Lipitor Overseas
On May 11th, the Pennsylvania-based drugmaker announced it had started selling generic versions of Lipitor patent in the U.K., Ireland, France, Belgium, and the Netherlands. Management at Mylan noted that sales of the drug totaled $1.6 billion in these five countries in 2011, and the debut of its cheaper generic version represents a significant opportunity for the company in the coming years. At present, Watson Pharmaceuticals makes the authorized generic in the United States and Ranbaxy Laboratories is selling the only other approved version. Mylan will be allowed to start selling generic Lipitor in the United States beginning in June.
Merck Likely to Feel Impact of Generic Lipitor
With much of the focus on Pfizer’s Lipitor patent woes, concerns in regard to other cholesterol-fighting drugs have been largely overshadowed. Not only will generic Lipitor affect Pfizer, but it is also expected to impact several other high-profile drug companies who manufacture their own cholesterol-fighting medication. In Merck’s case, its Zetia and Vytorin products are likely to face sales declines in 2012, as consumers flock to cheaper generic versions of Lipitor. Although the impact has been relatively modest thus far in 2012, more generic manufacturers are expected to be releasing their versions in the second half of the year making the already crowded marketplace even more so. Combined, Zetia and Vytorin accounted for just over 10% of Merck’s total pharmaceutical sales in 2011.
U.S. FDA Approves Generic Plavix
On May 17th, the U.S. Food and Drug Administration approved the sale of generic versions of Plavix by Mylan Pharmaceuticals, Teva Pharmaceutical, and several other generic drug manufacturers. The popular blood clot prevention drug, which is co-sold by Bristol-Myers Squibb and Sanofi, has been one of the best-selling prescription medicines in the industry over the past several years, reaching about $9 billion at its peak (second only to Lipitor). Although both Bristol-Myers and Sanofi have been preparing for the May 2012 expiration of Plavix for quite some time, seeking new drugs through acquisitions as well as relying on their own pipeline developments, both companies are still expected to face some top-line deceleration in the second half of the year.
Amylin Generating Significant Interest
Over the course of the past couple weeks, several of the world’s top drugmakers have expressed buying interest in the San Diego-based pharmaceutical company, including Astra Zeneca, Pfizer, and Sanofi. Amylin has been seeking a potential suitor since reportedly rejecting an unsolicited bid from Bristol-Myers Squibb earlier this year. The drug developer, which is best known for its diabetes drugs Bydureon and Byetta, has a market capitalization of more than $4 billion and generated about 650 million in revenue last year.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.