3 Safe and Solid Pharma Stocks for 2017

3 Safe and Solid Pharma Stocks for 2017 May 1, 2017
By Mark Terry, BioSpace.com Breaking News Staff

When the economy is rough, a couple industries still do reasonably well—drugs and undertakers, for example. Brian Feroldi, writing for The Motley Fool, takes a look at three pharmaceutical stocks that, he writes, “crank out profits even when the economy catches a cold.”

Pfizer

Not all pharmaceutical companies have a diversified revenue stream, but Feroldi notes that Pfizer has the three criteria that conservative investors should look for in pharmaceutical stocks—diversity, modest growth potential, and shareholder-friendly management teams.

Pfizer fits all three. Some of its best-known brands are facing generic competition, such as Lipitor, Norvasc and Lyrica, but it also has recent launches that are likely to have fast growth, such as Xeljanz, Eliquis, Ibrance and others. It’s also acquired Hospira, Anacor Pharmaceuticals and Medivation in the last two years, which will bolster solid growth.

Feroldi writes, “With an ever-expanding top line, Pfizer’s management team should easily be able to continue its tradition of sharing the wealth with investors. That means that shareholders can expect the company’s dividend payment to continue to grow and the share continue to periodically shrink. That’s a formula that should drive meaningful shareholder value in the years ahead.”

Pfizer is currently trading for $33.93.

Teligent

Based in Buena, NJ, Teligent is a generic-drug maker. Feroldi writes, “I like that this company doesn’t focus on small-molecule drugs but instead makes generic drugs from topical, injectable, complex, and ophthalmic markets—think creams, lotions, and ointments. Teligent’s strategy is to scan for brand-name drugs from these markets that have lost their patent protection, make a copycat, and then submit it for regulatory approval. Once it gets the green light for a formulation, it sells it on pharmacy shelves at a discount.”

On Mar. 8, the company’s abbreviated new drug application (ANDA) for Clobetasol Propionate Gel, 0.05%, received approval by the U.S. Food and Drug Administration (FDA). It was the company’s second approval for the year and its thirteenth from its internally-developed pipeline of topical generic pharmaceutical medicines. As a result, it has 18 topical generic pharmaceutical products in its U.S. portfolio, as well as four U.S. injectable products.

Teligent is currently trading for $8.04.

Neurocrine Biosciences

Headquartered in San Diego, Neurocrine Biosciences announced on April 12 that its Ingrezza (valbenazine) was approved by the FDA for adults with tardive dyskinesia (TD). It is the first and only treatment for TD approved by the FDA.

TD is marked by uncontrollable, abnormal and repetitive movements of the trunk, extremities and/or face. It often results as a side effect of antipsychotics and other drugs for schizophrenia, bipolar disorder and depression. Barclays estimates the drug could hit $1 billion in peak sales for TD alone.

There’s potential competition from Teva Pharmaceutical Industries ’s Austedo, which has a PDUFA date in late August of this year. It will probably get approved, but Ingrezza appears to be a slightly better product because Austedo has a black-box warning for depression and suicidal thoughts.

Feroldi writes, “Neurocrine Biosciences also boasts an exciting late-stage pipeline that holds a lot of potential. The company is currently in Phase III trials with drugs that could potentially treat diseases like Parkinson’s, endometriosis, and uterine fibroids. The company is also studying Ingrezza as a possible treatment of Tourette syndrome.”

Neurocine is currently trading for $53.81.

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