Why Johnson & Johnson and Sequenom Inc. Could Be Today's Biggest Healthcare Stories

Today's movers in healthcare

Jan 9, 2014 at 9:21AM

Good morning fellow, Fools! It's time to check in on the movers and shakers in health care today.

Johnson & Johnson fights back over diabetes trademark

Johnson & Johnson (NYSE:JNJ) announced this morning that it is appealing a decision by a Chinese government agency to revoke the company's trademark for its OneTouch diabetes monitoring product. The market is apparently hopefully the decision will be reversed, with Johnson & Johnson shares up nearly 1% in premarket.

Why is this a big deal? Firstly, China's diabetes market is the biggest in the world and is still growing. Last year alone, diabetes products generated over $17 billion in sales in China. So losing the exclusive rights to the popular OneTouch monitoring system will legally allow copycats to sell their products in literally the best market on Earth. That's why Johnson & Johnson management said they were "shocked" and "very disappointed" with the decision.  

What's my take? Personally, I believe this legal battle is much ado about nothing. The Chinese government is notorious for turning a blind eye to patent infringement and market exclusivity rights, just ask Apple (NASDAQ:AAPL) about it's experience with the iPad in China. In sum, copycats are a way of life in China, and their effect on Johnson & Johnson's bottom line was factored into sales of OneTouch long ago.

Of course, Johnson & Johnson, like Apple, will battle to protect their rights, but it's a non-issue in the bigger scheme of things. 

Sequenom blasting off

Shares of the cutting-edge genetic analysis company Sequenom (NASDAQ:SQNM) are ripping higher in premarket this morning after announcing that the European Patent Office granted the company's patent application entitled "Diagnosing Fetal Chromosomal Aneuploidy Using Genomic Sequencing." The patent protects the company's novel genetic analytical methods for detecting fetal aneuploidy in the European Union, as well as in Liechtenstein, Monaco, Norway and Switzerland.

Should you join the party? Sequenom's fetal diagnostic services are arguably its most important commercial products, with revenues jumping 166% in the third quarter of 2013 compared to a year ago. And this patent helps to ensure that the company will maintain its IP superiority in the space going forward.

Even so, it's important to understand that the company's costs have long been the fly in the ointment. Despite having annual sales of over $150 million last year and shares trading at a measly two times gross sales, Sequenom shares have continued to drop because of increasing costs, resulting in a net loss per share of about $1.

Looking ahead, Sequenom has recently laid off part of its workforce and is restructuring to lower costs. They are also pushing to increase sales of their fetal diagnostic services, which appears to be getting results based on the dramatic increase in revenues for this segment. So I am cautiously optimistic that Sequenom is on the comeback trail. As such, you might want to keep this one on your watch list.

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George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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