Monday’s Top Health Care Stories: Pfizer, Auxilium, and Regeneron

Pfizer, Auxilium, and Regeneron are the top health care stocks to watch this Monday morning. Here’s why.

May 5, 2014 at 9:20AM


Let's take a look at three stocks -- Pfizer (NYSE:PFE), Auxilium Pharmaceuticals (NASDAQ:AUXL), and Regeneron (NASDAQ:REGN) -- which could make waves across the health care sector this Monday morning.

Pfizer misses revenue estimates for the first quarter
First up, Pfizer just reported its first quarter earnings, missing analyst estimates on the top line by $730 million.

For the quarter, Pfizer earned $2.33 billion, or $0.36 per share, a decline from the $2.75 billion, or $0.38 per share, it earned in the prior year quarter. Excluding special items, Pfizer earned $0.57 per share, topping the average Thomson Reuters estimate by two cents. Total revenues slid 8.5% to $11.35 billion. Pfizer also pulled its full year forecast, stating that it would update its guidance "as soon as practicable".

Pfizer's established pharmaceuticals segment has long been a laggard for the company -- in fiscal 2013, revenue at the segment fell 8% year-over-year to $9.46 billion. During the first quarter, Pfizer's revenue from global established pharmaceutical business (a newly established, larger segment than the original segment) slumped 13% year-over-year to $5.99 billion. This division has long been considered a possible candidate for a spin-off or a sale. Earlier this year, Valeant, Actavis, and Mylan all expressed interest in acquiring the business.

Investors should note that Pfizer has been trying to acquire British pharmaceutical giant AstraZeneca for up to $106 billion in a bid to strengthen its oncology pipeline. However, AstraZeneca rejected the bid last week, while British regulators called for an inquiry into the bid.

Auxilium reports first quarter earnings
Auxilium Pharmaceuticals, which recently tumbled after revising its full year guidance due to lower-than-expected demand for its Testim testosterone gel, just reported its first quarter earnings.

Auxilium's net revenue rose 34% year-over-year to $88.5 million thanks to inorganic growth and the launch of Stendra, an erectile dysfunction drug licensed from VIVUS, and Xiaflex's new indication of Peyronie's Disease. The company's net loss came in at $0.39 per share, or $19.4 million, compared to a narrower loss of $0.05 per share, or $2.3 million, in the prior year quarter.

Auxilium started 2013 with only two products, but increased its portfolio to 12 products by the end of fiscal 2013. Auxilium now promotes seven products across men's health care and orthopedics, and sees high growth potential in five of them -- Stendra, Xiaflex for Peyronie's disease (PD), Xiaflex for Dupuytren's contracture (DC), Testopel, and Edex.

Stendra, which launched in January, generated sales of $11.6 million during the quarter. Sales of Xiaflex (for both PD and DC indications) rose 38% year-over-year to $16.6 million, while sales of Testopel rose from nothing in the prior year to $32 million. Sales of Testim, as previously warned, fell 76% due to lower demand for testosterone gel products.

Regeneron inks a new collaboration with Avalanche Biotechnologies
Last but not least, Regeneron just signed an agreement with Avalanche Biotechnologies to discover, develop, and commercialize novel gene therapy products for ophthalmologic diseases. The collaboration will cover a wide array of treatments discovered jointly by the two companies and developed using Avalanche's Ocular BioFactory platform.

Regeneron will pay Avalanche an upfront cash payment and contingent payments totalling up to $640 million dependent on the achievement of certain development and regulatory milestones, as well as royalties on net sales of products. The collaboration covers eight specific therapeutic targets, and Regeneron will retain exclusive worldwide rights on each if they are commercialized.

Although the agreement merely beefs up Regeneron's developmental pipeline, it's an important development for two reasons -- it's a new way to diversify Regeneron's top line away from U.S. sales of its eye treatment Eylea, which accounted for 67% of its 2013 revenue, and it represents a cohesive pipeline expansion in ophthalmology.   

Will this stock be your next multi-bagger?
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Leo Sun 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information