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Top Stocks to Watch Today: St. Jude Medical, Abbott Laboratories, Eli Lilly, Pfizer

By Leo Sun – Jul 16, 2014 at 8:56AM

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St. Jude Medical, Abbott Laboratories, Eli Lilly, and Pfizer are the top health care stocks to watch this morning.

Let's take a quick look at four stocks -- St. Jude Medical (STJ), Abbott Laboratories (ABT 1.04%), Eli Lilly (LLY 1.05%), and Pfizer (PFE 0.52%) -- which could loom large in health care headlines this Wednesday morning.

St. Jude Medical beats estimates for the second quarter
Medical device maker St. Jude Medical just reported its second quarter earnings. Its adjusted earnings rose 6% year-over-year to $1.02 per share, topping analyst estimates by two cents. Revenue climbed 3% to $1.45 billion, also beating consensus estimates by $10 million.

The company raised its full year EPS guidance from a range between $3.76-$3.81 to $3.96-$4.01. Shares of St. Jude, which are up 41% over the past 12 months, remain flat in pre-market trading.

Sales at the company's Cardiac Rhythm Management segment rose 2% year-over-year to $733 million. From that total, sales of ICDs (implantable cardioverter defibrillators) rose 2% to $462 million.

Cardiovascular sales, which include vascular and structural heart products, rose 3% to $351 million. Sales of Atrial Fibrillation products climbed 8% to $257 million, while sales of Neuromodulation products fell 1% to $107 million.

Investors should note that St. Jude recently agreed to acquire NeuroTherm, a manufacturer of interventional pain management therapies, for approximately $200 million in cash. The acquisition is expected to accelerate the growth of St. Jude's chronic pain business.

Abbott Labs beats estimates for the second quarter
Abbott Labs also just reported its second quarter earnings. Abbott's EPS from continuing operations rose 17.4% year-over-year to $0.54 per share, topping analyst estimates by three cents. Revenue rose 1.9% to $5.55 billion, also beating estimates by $30 million. Shares of Abbott, which have rallied 17% over the past 12 months, are up 2% in pre-market trading.

Revenue at Abbott's Nutrition business rose 1.6% to $1.73 billion. Revenue at Medical Devices edged up 1.2% to $1.37 billion. Diagnostics revenue climbed 4.8% to $1.19 billion, while Established Pharmaceuticals revenue fell 0.1% to $1.22 billion.

Abbott recently agreed to sell its developed markets branded generics pharmaceuticals to Mylan for $5.3 billion. The divestment is expected to boost Abbott's 2015 sales and earnings growth rates as it focuses its branded generics pharmaceuticals business on emerging markets.

As part of that expansion into emerging markets, Abbott agreed to acquire Latin American pharamceutical company CFR Pharmaceuticals and Russian pharmaceutical company Veropharm during the second quarter. Earlier this month, Abbott partnered with Fonterra to develop a proposed dairy farm hub in China.

Eli Lilly announces a new immunotherapy collaboration
Eli Lilly just announced a collaboration with Immunocore Limited, which will focus on the co-discovery and co-development of novel T cell-based cancer therapies. Immunocore's Immune Mobilizing Monoclonal T-Cell Receptor Against Cancer (ImmTAC) technology is a kind of immunotherapy which directs a patient's T-cells to target cancerous cells while avoiding healthy ones.

Lilly will pay Immunocore an upfront fee of $15 million per program. If Lilly accepts a preclinical package to develop and potentially commercialize, Immunocore will receive an opt-in fee of $10 million and will gain an option to continue co-development with Lilly on a cost-sharing and profit-sharing basis. If Immunocore opts out, it is still entitled to received potential future milestone and royalty payments.

This is a positive development for Lilly, which has been struggling with the patent expirations of several major drugs and a series of pipeline failures.

Pfizer announces positive phase 3 results for BeneFIX
Pfizer just announced positive results from a phase 3 study comparing a preventive regimen of BeneFIX Coagulation Factor IX to on-demand treatment in patients with moderately severe to severe hemophilia B. BeneFIX has already been approved by the FDA for both the prevention and control of hemorrhagic episodes in patients with hemophilia B.

The study's top line results showed that the patients which took the treatment once a week showed a statistically significant reduction in the annualized bleeding rate, compared to patients who only took the treatment when needed. The median ABR value, a common benchmark for preventive regimens in hemophilia, was 2.0 compared to 33.6 for the on-demand regimen, indicating a 94% decrease in bleeding rates.

While this is a positive development for Pfizer, the entire market for blood-derived factor IX clotting therapies is only worth approximately $150 million.

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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