While allergy sufferers pay the price for a warmer than usual winter, profits will likely bloom for pharmaceutical companies. So stop and smell the roses. This could provide a healthy boost to your portfolio.
It’s only March and pollen counts are setting record highs all over the Southeast. In New York City, trees are blooming several weeks ahead of schedule.
“An early start to the allergy season is always good for the large pharmaceutical companies that manufacture allergy meds,” said Paul Walsh, vice president of weather analytics at the Weather Channel. “This year’s mild winter followed by record spring warmth is manna from heaven for these firms.” (Note: The Weather Channel is owned by NBCUniversal, CNBC's corporate parent.)
So, we’re sniffing out new portfolio strategies in between sneezing and wheezing.
“The early onset of the allergy season could provide a boost to an industry that missed out on a big flu season,” said Argus Research President John Eade.
Eade, who follows big pharma, said the timing of this season could also aid Merck — which is the biggest seller of prescription allergy medicine. That’s because it loses its patent protection on its blockbuster drug Singulair later this year. When Merck does, Eade said Mylan Labs is in line to launch a generic.
“Other companies positioned to profit are the diversified pharma companies that own consumer products divisions — including Johnson & Johnson and Pfizer,” said Eade.
Miller Tabak Health Care Transformation Fund Manager Les Funtleyder shares the same view.
“We kind of had for drug companies not a great cold and flu season, because the weather was so wrong for it. But, we’ll make it back on the allergies,” said Les Funtleyder.
Merck, Johnson & Johnson, Sanofi and Pfizer make a big portion of the allergy drugs in the market — both prescription and over-the-counter. Of those, Funtleyder believes Merck, the maker of the antihistamine Claritan and nasal spray Afrin, will be the biggest winner.
Bottom line: You may not be breathing easier, but the world’s biggest pharmaceutical companies will be, this spring.
Disclosure: Miller Tabak Health Care Transformation Fund owns shares Of Merck and Johnson & Johnson.
Stephanie is Squawk Box producer. Follow her on twitter @StephLandsman
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