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PHARMA'S MARKET VIDEO
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Pharma's Market
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CNBC.com |
] shares higher--at least, in early trading--for the third day in a row. Seamus Fernandez at Leerink Swann writes, "We believe that yesterday's R&D update supports our view that SGP is currently undervalued & attractive for long-term investors."
JPMorgan's Chris Schott says, "We believe (Monday's) meeting can begin to shift the focus of the story toward the company's pipeline (especially as data becomes available over the next 1-2 years)....These pieces of the story have been overshadowed by the uncertainty surrounding the cholesterol JV (joint venture with Merck on Vytorin and Zetia) and the potential currency impact to EPS (earnings per share) that has dominated shares over the recent months." Of all the American big pharmas, SGP has the highest percentage of sales coming from overseas, so it is the most exposed to the foreign currency exchange rate.
Steve Scala at Cowen and Company writes, "SGP's pipeline appears very promising with multiple novel compounds addressing unmet needs across a broad range of therapeutic areas."
Bernstein's Dr. Tim Anderson says, "The longer-term outlook with SGP remains the best in the group...a function of the company's low generic exposure and solid late-stage pipeline."
And Catherine Arnold at Credit Suisse titles her research note, "The R&D Cup Runneth Over."
Arnold, Barbara Ryan at Deutsche Bank and Jami Rubin at Goldman Sachs are the only women at the major equity research firms covering big pharma. Stock analysis is still very much a male-dominated field. And that was no more in evidence at the SGP meeting yesterday than during the morning bathroom break. There was a line at the men's room, but my producer, Ruth, told me there was no line at the ladies' room.
One of the "5 Stars" (that's what SGP is calling them) in its late-stage development pipeline that the company highlighted on Monday was Bridion for side effects from anesthesia. The Food and Drug Administration recently kicked it back saying it's "not approvable." But it is already approved in Europe--something Schering made perfectly clear in a kind of "take that! FDA" gesture by hanging a big banner above the entrance to the building where yesterday's meeting was held.
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Recently, SGP Chairman and CEO Fred Hassan has publicly voiced concerns that Europe is usurping the United States' drug innovation leadership. The company announced yesterday that it has a meeting scheduled with the FDA to talk about a potential path forward for Bridion. Stay tuned on that.
As is common practice of many companies at analyst/investor meetings, Schering handed out goodie bags to attendees on their way out. It was filled with over-the-counter SGP products like sunscreen, Claritin and Dr. Scholl's gel insoles. But also in there was a bottle of Miralax for constipation! Is Schering trying to tell some of the analysts something?
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Disclosures: A part of Bernstein owns at least one percent of SGP shares. Leerink Swann may trade in the stock and it makes a market in Vertex Pharmaceuticals,[VRTX
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] which is in a race with SGP to develop a new drug for hepatitis C. JPMorgan and Credit Suisse have banked SGP and want to do it again soon. In addition, someone on the CS research team lives with someone who works for Schering.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes