Bristol-Myers Squibb, Novartis AG and GlaxoSmithKline Could Be Big Movers in Healthcare Today

Today's movers in the pharmaceutical sector.

Jan 24, 2014 at 9:24AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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

Bristol-Myers Squibb beats earnings estimates
Bristol-Myers Squibb (NYSE:BMY) is up in pre-market trading after the company handily beat fourth quarter earnings estimates. Specifically, the company announced this morning that fourth quarter revenues exceeded estimates by a whopping $100 million. That said, you need to understand that the bulk of this increase is due to the sale of the company's diabetes franchise to its former partner, AstraZeneca (NYSE:AZN).

In fact, U.S. revenues from product sales only increased by 1% compared to a year ago, although international sales did jump by a healthy 11%. Looking ahead, Bristol-Myers management gave a lukewarm outlook for 2014, suggesting that earnings per share could be relatively flat in subsequent quarters.

What's my take? I'm not particularly surprised that earnings jumped following the sale to AstraZeneca. So, what matters most is what is going to happen down the road. Despite growing revenues for most of the company's flagship products, research and development costs are increasing as well, slightly offsetting these gains. As such, I don't believe Bristol-Myers will have as good of a year compared to its big biotech peers. 

Market not impressed with GlaxoSmithKline's diabetes drug?
Although a European Medicines Agency, or EMA, committee recommended GlaxoSmithKline's (NYSE:GSK) type 2 diabetes drug for approval today, the company's shares are falling in premarket trading. The drug, known as albiglutide, is a once-weekly GLP-1 therapy that will compete against Novo Nordisk and AstraZeneca's drugs in the same group. Albiglutide is also up for regulatory review in the U.S. on April 15 of this year. Looking ahead, the drug could be approved in the EU before the end of this quarter, following this positive recommendation.

So, why are shares falling? My view is that the market is unsure about the drug's commercial potential, and there are questions about the drug's ability to be approved in the U.S. Put simply, albiglutide is expected to compete in a crowded space, and the drug does have some unpleasant gastrointestinal side effects that may be off putting for potential users. Regardless, GlaxoSmithKline is always a good name to keep tabs on, and diabetes drugs, more often than not, fare well on the commercial front. Time will tell. 

The EU says no to Novartis heart drug
Novartis AG (NYSE:NVS) is down in pre-market trading this morning following a negative opinion from the EMA for the company's experimental therapy for acute heart failure called Serelaxin. Serelaxin is expected to generate sales topping $1 billion if it's eventually approved in the U.S. and the EU, so this rejection is important to the company's bottom line. Novartis plans on refiling the drug's application in the EU once a late-stage study concludes this September.

Despite this setback, Serelaxin likely has an easier path to approval in the U.S. after the U.S. Food and Drug Administration, or FDA, gave the drug breakthrough  designation last year. Moreover, the bulk of the drug's potential revenues are expected to come from the U.S. market. As such, you shouldn't fret too much over this rejection in the EU. Novartis has a strong commercial portfolio, positive cash flows, and an stellar clinical pipeline, giving investors multiple reasons to dig deeper into this biotech.

Could these two companies change the way we treat cancer?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In the Motley Fool's brand-new FREE report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers