Why You Should Watch Alexion Pharmaceuticals, Inc., Ariad Pharmaceuticals and Thermo Fisher Scientific Inc. Today

Health care stocks moving on news today.

Jan 30, 2014 at 9:05AM

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 today's movers in health care.

Alexion Pharmaceuticals beats earnings estimates
First up is Alexion Pharmaceuticals (NASDAQ:ALXN) which is moving higher this morning on heavy volume after reporting stronger than expected fourth quarter results. One of the key developments exciting investors this morning is a 38% increase in net product sales last quarter compared to a year ago. This marked increase in sales is primarily the result of strong sales for Alexion's blood disorder drug Soliris, which generated sales of $1.55 billion in 2013. Looking ahead, the company expects revenues to grow another 33% this year.

Although this is stellar growth for a large cap pharma, you should keep in mind that Alexion is currently trading at over 24 times revenues. So, it's not exactly cheap -- even with earnings growing at breakneck pace. With the broader market showing signs of weakness, I am unsure how much longer investors will continue to pay such rich premiums for biopharma earnings. And the market is certainly assigning a hefty premium to Alexion right now. 

Ariad looking for growth down under
Ariad Pharmaceuticals (NASDAQ:ARIA) is also on the move this morning following an announcement late yesterday that the company signed a seven year partnership agreement with Specialised Therapeutics Australia to commercialize Iclusig in Australia. Ariad previously filed for marketing authorization for Iclusig in Australia last year, so this agreement is essentially handing the remaining regulatory paperwork off to a third party. Specialised Therapeutics Australia will also be responsible for reimbursement issues, assuming approval later this year. 

Is this a big deal? I don't believe so. Although financial terms of the deal weren't disclosed, it's hard to see Australia being a major revenue generator for Iclusig going forward. There are only an estimated 1,500 patients being treated for chronic myeloid leukemia in Australia, and it's important to remember that Iclusig is not a frontline treatment for the disease.

So, you shouldn't put much weight on this development when considering an investment in Ariad. Looking down the road, the bigger issues are Iclusig's ability to stay on the market in the U.S. and the EU, as well as the company's ongoing clinical trials to expand the drug's label. 

Thermo Fisher also beats estimates
Turning back to the earnings front, Thermo Fisher Scientific (NYSE:TMO) is in positive territory in premarket this morning after beating fourth quarter revenue estimates by a healthy $160 million. Specifically, Thermo Fisher's adjusted earnings per share grew to a record $1.43, with fourth quarter revenue coming in at a whopping $3.47 billion. In short, these are the best numbers the company has ever posted. To top it off, Thermo Fisher generated $1.75 billion in free cash flow for the year, giving them ample dry powder to pursue possible licensing deals or acquisitions. For 2014, Thermo Fisher is forecasting even more growth in revenues, with earnings per share expected to rise by 24%-27% year over year. 

Should investors be excited by these numbers? In my view, the answer is a big yes! Unlike so many other biotechs right now, Thermo Fisher shares aren't trading at sky high premiums. Namely, the company's shares are trading at a mere three times annual sales, making it comparatively cheap. With strong guidance for 2014 and a nice cash position, I think Thermo Fisher looks like it's in for a good year.

Could this stock be a top performer in 2014?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

George Budwell has no position in any stocks mentioned. The Motley Fool recommends Thermo Fisher Scientific. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers