Merck & Co., Inc. (NYSE: MRK) barely has its Schering-Plough deal behind it.  And today came the announcement of its dividend rate, but more importantly came word of a large share repurchase program.  The quarterly dividend for common stock is remaining at $0.38 per quarter, which gives a  yield of almost 4.20%.  It also declared a quarterly dividend of $3.75 per share on the company’s mandatory convertible preferred stock for the first quarter of 2010. But this buyback is what will excite most investors.

Merck’s Board of Directors approved a share buyback plan for up to $3 billion of common stock for its treasury. These share purchases will be made on the open market or in block transactions or in privately negotiated transactions.

Unfortunately, a down trading day and a recent huge merger isn’t enough to please many.  Trading floors and investors are also getting further and further away from caring about buying stocks ahead of Thanksgiving.

Merck shares late in the day are down 0.5% at $36.24 late in the day, and the 52-week trading range is $20.95 to $36.96.

JON C. OGG
NOVEMBER 24, 2009

Bristol-Myers Squibb Company (NYSE: BMY) is going to completely separate itself from its holdings in Mead Johnson Nutrition Company (NYSE: MJN).  The company expects that the split-off will be a tax-advantaged way to divest these holdings and is expected to be net cash flow positive to the BioPharma business and is expected to be accretive to earnings per share beginning in 2010.  Mead Johnson has had one unbelievable year.  This came public in February and traded as low as $25.72 after the IPO.  Shares closed at $45.25 on Friday.

Bristol-Myers Squibb shareholders can exchange some, none or all of their shares of Bristol-Myers Squibb common stock for shares of Mead Johnson common stock in what should be a tax-free transaction to participating shareholders. Bristol-Myers Squibb will convert all of its Mead Johnson class B common stock into Mead Johnson class A common stock and only Mead Johnson class A common stock will remain outstanding after the conversion.

The price of Mead Johnson common stock is to be established by a formula subject to an upper limit of 0.6027 shares of Mead Johnson per share of Bristol-Myers Squibb. For each $1.00 of Bristol-Myers Squibb common stock accepted in the exchange offer, the tendering shareholder will receive about $1.11 of Mead Johnson common stock, subject to the upper limit on the exchange ratio.

The ratio of Bristol-Myers Squibb and Mead Johnson shares will be determined by a 10% discount to the simple arithmetic average of the daily volume-weighted average prices of shares of Bristol-Myers Squibb common stock and Mead Johnson common shares traded on the NYSE over a three-day period currently expected to be December 8, 9, and 10, 2009.  The largest possible number of shares of Bristol-Myers Squibb common stock that will be accepted will be equal to 170,000,000 divided by the final exchange ratio.

Bristol-Myers Squibb owns 170,000,000 shares of Mead Johnson class A and class B common stock, which comes to about 97.5% of the voting interest and 83.1% of the economic interest in Mead Johnson.

Mead Johnson shares are down 4.5% at $43.18 and Bristol-Myers Squibb shares are up 3.5% at $23.00 in pre-market trading.

JON C. OGG
November 16, 2009

We may have had earnings season officially start with Alcoa this week, but next week will be the real week for the launch of earnings season.  We now have an index to track the top 500 companies by market cap on a real-time basis via the 24/7 Wall St. Real-Time 500, and these top 10 earnings next week are generally among the top market caps and/or trading volumes.  In technology we have to look forward to Intel Corporation (NASDAQ: INTC), Google Inc. (NASDAQ: GOOG), and IBM (NYSE: IBM).  General Electric Co. (NYSE: GE) is the conglomerate and Halliburton Company (NYSE: HAL) is the oil entrant.  Financial leaders JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), Goldman Sachs Group (NYSE: GS), and Bank of America Corporation (NYSE: BAC) are all due.  Tied to BioHealth are Johnson & Johnson (NYSE: JNJ) and Abbott Laboratories (NYSE: ABT) on deck.

We have detailed the estimates on an earnings basis as far as estimates from Thomson Reuters, and we have also included how much these stocks have rallied since the start of the July quarter and how much these are up from the March 9 closing date that has been widely recognized as the last day of the mayhem before the rapid snap-back rally came into play.

Tuesday, October 13

Intel Corporation (NASDAQ: INTC) is the first of the tech giants to report.  Estimates are $0.27 EPS and $9.02 billion in revenues; next quarter estimates are $0.34 EPS on $9.5 billion in revenues.  Since the end of June this is up 22.5% and since the March 7 close this is up 63%.

Consumer products and medical and drug giant Johnson & Johnson (NYSE: JNJ) is the first to report in each group.  Consensus estimates are $1.13 EPS and $15.18 billion in revenues, while Q4 consensus is $0.98 EPS on $15.51 billion in revenues.  Since the end of June this is up almost 9% and since the March 9 close this is up 34%.

Wednesday, October 14

Abbott Laboratories (NYSE: ABT)    has a consensus figure of $0.90 EPS and $7.72 billion in revenues, while its Q4 is expected to be $1.17 EPS and $8.48 billion in revenues.  Abbott has greatly lagged the market. Since the end of June this is up 7.2% and since the March 9 close this is up 9.1%.

Jamie Dimon and friends at JPMorgan Chase & Co. (NYSE: JPM) is the first of the banking giants on deck.  Estimates are $0.49 EPS and $24.8 billion.  Since the end of June this is up almost 34% and since the March 9 close this is up 187%.

Thursday, October 15

Citigroup Inc. (NYSE: C) is no longer the top by market cap, but it is by far the most active stock of the big banks.  Estimates are -$0.21 EPS as of today.  Since the end of June this is up 55% and since the March 9 close this is up over 300%.

Goldman Sachs Group (NYSE: GS) is the first of the bulge bracket investment banking firms, or the bank holding companies with no banking operations.  Estimates today are $4.24 EPS.  Since the end of June this is up over 28% and since the March 9 close this is up 156%.

Google Inc. (NASDAQ: GOOG) is expected to post earning of $5.37 EPS and revenues of $4.21 billion.  Google does not offer guidance. Since the end of June this is up 22.5% and since the March 9 close this is up 78%.

IBM (NYSE: IBM) is expected to report $2.38 EPS and $23.37 billion in revenues, and next quarter estimates are $3.38 EPS and $26.68 billion in revenues.  What we will look at most is its backlog, which was listed at June 30 as $132 billion at actual rates compared with $126 billion at March 31, 2009.  Since the end of June this is up 20% and since the March 9 close this is up 51%.

Friday, October 16

Bank of America Corporation (NYSE: BAC) estimates keep changing, and the Ken Lewis departure is just another added wild card.  Estimates are currently -$0.06 EPS on about $27.5 billion in revenues.  Since the end of June this is up 32% and since the March 9 close this is up over 300%.

General Electric (NYSE: GE) is another wild card as the company does not like to offer guidance now.  We have consensus estimates at $0.20 EPS on about $40 billion in revenues.  Q4 estimates are $0.24 EPS and $42.58 billion in revenues.  GE Capital is the likely focus here as investors are going to be looking for continued profit discussions.  Since the end of June this is up 39% and since the March 9 close this is up 122%.

Halliburton Company (NYSE: HAL) is the first of the oil services giants that we saw on deck.  Consensus estimates are $0.26 EPS on $3.42 billion in revenues.  Analysts have a hard time pinpointing this one through the year because of its location change and its change in international operations.   Since the end of June this is up 37% and since the March 9 close this is up 81%.

As a reminder, all of these estimates can and are likely to change some between now and the earnings dates as analysts make their last minute changes.  Peer earnings reports are also likely to create changes to some of the earnings and the whisper expectations for the companies.  There is also the chance that earnings dates can change and that other key stocks will try to report or make guidance comments ahead of their top competitors.

You can join our open email distribution list to get updates each morning on analyst upgrades and downgrades, top day trader alerts, IPO’s and secondary offerings, Warren Buffett and other guru activity, M&A and more.

JON C. OGG
OCTOBER 9, 2009

Cell Therapeutics, Inc. (NASDAQ: CTIC) has announced what may be a large breakthrough in the fight against cancer.  This is a combined test rather than as a standalone treatment, but the result may be a huge step in cancer of the lower esophagus.  As many of the ties of one cancer are made to others, you can imagine that the hope might be that this would have other possibilities as well in the fight against other or related cancers.

The company said that a study from Brown University to be presented in the proffered oral session at the Annual Meeting of the International Society of Gastrointestinal Oncology in Philadelphia patients with cancer of the lower esophagus showed a high rate of complete remission when given OPAXIO(TM).  This is paclitaxel poliglumex, which is a biologically enhanced paclitaxel.  This result was shown when OPAXIO was administered in combination with standard cisplatin and concurrent radiation.

Cell Therapeutics noted that the phase II study was led by Dr. Safran and enrolled 40 patients with pathologically-confirmed and locally-advanced adenocarcinoma or squamous cell carcinoma of the esophagus or gastro-esophageal junction with no evidence of distant metastasis. These 40 patients received weekly paclitaxel poliglumex and cisplatin for six weeks with concurrent radiation. Of the first 28 patients undergoing surgery, all 8 of the 28 with adenocarcinoma have achieved a pathologic complete remission. No patients required a feeding tube, which differs from historical studies using the standard regimen where the large majority of patients require a feeding tube.

The company said that Paclitaxel poliglumex’s selective radiation enhancement preclinical profile is being validated by the high rates of pathologic complete remission, and by low rates of severe regional side effects observed in this phase 2 study. It also noted that the results justify proceeding to a randomized, controlled trial to definitively prove the clinical benefit observed.  It also plans to speak with the FDA regarding a potential phase III registration strategy for this indication.  Further noted is that this would ‘be the first registration study for a radiation sensitizing agent in this indication.’

As this is a $1.23 stock and has a 52-week trading range of $0.05 to $2.28, you can imagine there will be a lot of trading around this small cap name on Thursday.  Additional results and safety data is offered below.


JON C. OGG

Concurrent chemotherapy with 50.5 Gy of radiation is the standard pre-surgical therapy for patients with potentially resectable, locally-advanced esophageal cancer. Although the addition of chemotherapy to radiation is beneficial, the cure rate for esophageal cancer is low. Standard neoadjuvant treatment for esophageal cancer uses a regimen of cisplatin, and fluorouracil (5-FU) chemotherapy with concurrent radiation, which is a regimen associated with a high incidence of Grade 3-4 toxicity to the upper gastrointestinal track necessitating prophylactic insertion of feeding tubes. Published preclinical studies have demonstrated that, unlike standard paclitaxel and other chemotherapeutic agents that enhance radiation killing by a factor of 1.5 to 2.0, OPAXIO increases tumor specific radiation cell kill by a factor of 7.2 to 8.4-fold (Milas Luka et al, Poly(L-glutamic acid)-paclitaxel conjugate is a potent enhancer of tumor radiocurability, Int’l J. Radiat. Oncol. Biol. Phys. 55(3), 707-12 (2003)).
nutrition. No patients developed neuropathy.parenteral was given total subsequently in only one patient who was reported (n=2), fatigue (n=2), glucose intolerance (n=2), and hypersensitivity reaction (n=1). Grade 3 anorexia dysphagia. Eleven of 35 patients had grade 3 non-hematologic toxicities including electrolyte abnormalities (n=5), nausea (n=3), thromboembolus toxicities, which included electrolyte abnormalities, glucose intolerance, hypersensitivity reaction and non-hematologic (n=2) and anemia (n=1). Four of 35 patients experienced grade 4 neutropenia toxicities; grade 3 hematologic toxicity included hematologicThere were no grade 4

Today is an unusually active day for many emerging biotech stocks in the news and we are seeing significant moves in response. We have more detail on each with appropriate links through to more analysis and data at BioHealthInvestor.com or VSInvestor.com:

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) is seeing exponential trading volume in stock and options after a 10% rise today.

Dynavax Technologies Corporation (NASDAQ: DVAX) is up over 50%after the FDA removed a clinical hold on its hepatitis treatment.

The fight over the Sepracor, Inc. (NASDAQ: SEPR) acquisition has now gone to the level of a class action status.  We noted the very low P/E and multiple valuations yesterday on this one.

StemCells, Inc. (NASDAQ: STEM) traded slightly higher on word that it will soon begin a study with the University of California, San Francisco Children’s Hospital using purified human neural stem cells as a possible treatment for Pelizaeus-Merzbacher Disease.

Pharmacyclics Inc. (NASDAQ: PCYC) was trading up on news that its right offering is oversubscribed.

Oculus Innovative Sciences, Inc. (NASDAQ: OCLS) is trading higher on report that it has been assigned a Medicare HCPCS code for its recently introduced Microcyn Skin & Wound HydroGel.

JON C. OGG
SEPTEMBER 10, 2009

It usually takes an event or a series of events for biotech stocks to ever look cheap compared to the overall market or even to sub-sectors within health care.  They generally trade at higher multiples of revenues and with high P/E ratios, assuming they even have real sales-generated revenues and earnings.  But in today’s climate there are many of the large key biotech stocks that are now trading with market-discounts on the P/E ratios and on multiples of revenues as valuation metrics.  We ran a full screen for BioHealthInvestor.com and some of the key names that came up with low P/E and revenue multiples were Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), Cephalon Inc. (NASDAQ: CEPH), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), Genzyme Corporation (NASDAQ: GENZ), and PDL BioPharma, Inc. (NASDAQ: PDLI).

There are generally some reasons that have gotten these to cheap screening levels, but some of these are showing significant value for a sector that usually commands a high-premium to most sectors.  Amgen has recovered substantially from its woes, and Biogen has as well.  Genzyme’s troubles allowed it to make the screen with some key caveats, and the valuation screens elsewhere showed that Cephalon, Cubist, and PDL are worth a look.  All of these companies were also well above our screening threshold of $400 million in market cap and average volume of 250,000 shares or more.  These all came in above $1 billion in market cap and most never see under 1 million shares per day in average volume.

The full story is available at BioHealthInvestor.com.

-The 24/7 Wall Street Team

Fidelity Management & Research Company, or FMR, was among the giants which released its quarterly holdings over the most recent days.  While it is always interesting to see which holdings are the top holdings, most traders look at the big portfolio changes to try to gain insight into the minds of fund managers. We looked through the top holdings valued at $1 billion or more solely for the Fidelity Management & Research Company unit and we looked for positions where the position changed by more than 10% up or down by measure of share count rather than by the dollar amount.

There were some serious additions in Q2 in the financial sector to its portfolios.  The tech sector saw some mixed changes, while the drug and consumer changes looked lower.  There was a surprise cut in a key conglomerate and a huge add to one of the Battlestar Galactica coffee stocks.

Of the larger changes to its top holdings in financial stocks, FMR’s major large changes were all additional stakes being taken.  WELLS FARGO & CO (NYSE: WFC) was listed as $6.05 billion via 249.45 million shares, a gain of roughly 36 million shares. J.P. MORGAN CHASE & CO INC. (NYSE: JPM) was worth $5.44 billion from a stake of almost 159.6 million shares, a gain of over 7.1 million shares. BANK OF AMERICA CORP. (NYSE: BAC) was listed as $4.17 billion via a stake of 315.9 million shares, but that is effectively a doubling in size of shares from its Q1 reporting.  GOLDMAN SACHS GROUP INC. (NYSE: GS) was listed as a $3.44 billion stake via 23.35 million shares, a gain of roughly 7 million shares of stock. MORGAN STANLEY (NYSE: MS) was a stake worth some $2.5 billion via some 87.8 million shares, also more than double its previous shares listed.

APPLE INC. (NASDAQ: AAPL) is one of its top few holdings at $5.96 billion, and this was a gain of more than 10% to 4,59 million shares. MICROSOFT CORP. (NASDAQ: MSFT) was a huge gain by almost one-third of its stake to some 163 million shares of stock worth a reported $3.87 billion. ORACLE CORP. (NASDAQ: ORCL) was listed as being worth some $2.79 billion via 130.3 million shares, a gain of about 15.3 million shares.  IBM (IBM) was worth $1.00 billion via 9.62 million shares, but this is after a drop of roughly 4.3 million shares.

There was an increase in the leading networker and a decrease in its top up-coming rival.  CISCO SYSTEMS INC. (NASDAQ: CSCO) was worth $2.82 billion via some  151.45 million shares, a gain of over 20 million shares. JUNIPER NETWORKS INC. was a stake listed as worth $1.36 billion via almost 57.8 million shares, but this was a drop of over 11.6 million shares.

There was no serious conviction nor any serious directional change in energy via the majors, but again this was just a change in the largest positions.  EXXON MOBIL CORP. was worth $3.33 billion via 47.7 million shares, a drop of over 11 million shares.  CHEVRON CORP. (NYSE: CVX) was listed as being worth $2.41 billion via 36.3 million shares, a gain of more than 5.2 million shares. ROYAL DUTCH SHELL PLC (NYSE: RDS-B) was the big change.  That stake was worth $1.00 billion via 19.8 million shares, but that was after it boosted its stake by over 13.6 million shares.

Of the big changes in medical and drugs, it looks like there was a cut in directional change.  PFIZER INC. was a stake worth $2.96 billion via 197.4 million shares, which was more than 26 million shares above the rest.  PROCTER & GAMBLE CO. was a stake worth $2.76 billion via 54.1 million shares, a drop of almost 10 million shares. JOHNSON & JOHNSON (NYSE: JNJ) was worth $2.59 billion via 45.6 million shares, a drop of 7.9 million shares. MERCK & CO INC. was worth $1.21 billion via a stake of 43.48 million shares, but that looked to be down by more than 12 million shares.  WYETH (NYSE: WYE) was the unwanted step child in the group as the 24.89 million shares stake worth $1.12 billion, but the drop was significant as it was down from over 47 million shares a quarter before.  EXPRESS SCRIPTS INC. (NASDAQ: ESRX) was the big gain in the healthcare sector.  The $1.52 billion stake was from 22.1 million shares of stock, but this was a gain of more than 6.9 million shares.

We saw a directional change in the two largest telecom players.  FMR added to its
VERIZON COMMUNICATIONS INC. (NYSE: VZ) stake worth $2.22 billion via some 72.56 million shares, a gain of roughly 10.12 million shares.  AT&T INC. (NYSE: T) was a smaller stake of shares worth $1.65 billion via some 66.82 million shares, a decrease of more than 25.8 million shares.

There was a huge cut, and a rather surprising one, in one of the conglomerate stocks.  GENERAL ELECTRIC CO. (NYSE: GE) was listed a stake worth some $1.43 billion via more than 122.4 million shares, but that is a drop of roughly 50 million shares of common stock from one quarter to the next. UNITED TECHNOLOGIES CORP. (NYSE: UTX) was worth $1.24 billion via a 23.9 million share stake, a gain of more than 2.56 million shares.

There was a huge gain in a miscellaneous food and retailer stock.  FMR boosted its stake in STARBUCKS CORP. (NASDAQ: SBUX) by more than 100% to almost 75.3 million shares worth $1.04 billion as of the end of the quarter.

Be advised that this was from the filing and was of the Fidelity Management & Research Company, and does not include shares transferred or hedged or otherwise not available to be seen in that subsidiary.  There are other Fidelity subsidiaries that were not counted in this tally and it is never possible to know if these positions were temporary changes or if they were broad portfolio changes.

JON C. OGG
AUGUST 17, 2009

Diabetes is becoming an epidemic in the U.S. and the Western World.  The ties to obesity are often direct, so the potential treatments are often directly tied as well.  We did a recent dig down for the next $170 billion opportunity for eight different major diseases and conditions, and now we have conducted a much deeper dig down specifically in the field of diabetes over at BioHealthInvestor.com.  We have recent and upcoming FDA action and data being presented from Novo Nordisk (NYSE: NVO), MannKind Corp. (NASDAQ: MNKD), Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), Eli Lilly (NYSE: LLY), Alkermes Inc. (NASDAQ: ALKS), Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN).  There is a mini-race going on between some of the later stage studies from obesity and diabetes candidates from Arena Pharmaceuticals, Inc. (NASDAQ: ARNA), VIVUS, inc. (NASDAQ: VVUS), Orexigen Therapeutics, Inc. (NASDAQ: OREX) and Amylin Pharmaceuticals Inc. (NASDAQ: AMLN).  Geron Corporation (NASDAQ: GERN) and StemCells Inc. (NASDAQ: STEM) were noted as two of the stem cell hopes, although stem cells may later rather than sooner.

Generex Biotechnology Corporation (NASDAQ: GNBT), Spherix Incorporated (NASDAQ: SPEX) and Oramed Pharmaceuticals Inc. (OTCBB: ORMP) were all noted in the much smaller or emerging plays.  Home Diagnostics, Inc. (NASDAQ:HDIX) and Insulet Corporation (NASDAQ: PODD) have both recently had key events as the interest in test equipment companies continues to remain high.

FULL STORY with much more detail at BioHealthInvestor.com.

MannKind Corporation (NASDAQ: MNKD) is getting hit after the company announced that it priced a secondary offering of 7,400,000 shares of its common stock.  While the press release does not say what price the deal came at, the syndicate group told us this went out at $7.35 per share.  The company’s chairman, CEO, and principal stockholder, Alfred E. Mann, is purchasing 1,000,000 of these shares from the underwriters.

This figure comes to north of $54 million before deducting fees.  All shares are being sold by the company itself, so all proceeds from the offering will head into the MannKind coffers.  Jefferies is listed as the sole book-running manager, and the co-manager is listed as Rodman & Renshaw. The underwriters a 30-day over-allotment option to purchase up to an additional 960,000 shares.

It was just in June that the company closed upon the purchase of the insulin assets and facility from Pfizer, Inc. (NYSE: PFE).  That was listed as only a $3 million transaction.

MannKind shares are down 9.5% at $7.36 as of 9:50 on almost 1.35 million shares.  Its 52-week trading range is $2.00 to $9.25.

JON C. OGG
AUGUST 5, 2009

It is an audacious statement, but Sir Liam Donaldson, Chief Medical Officer of the UK, believes that swine flu cases may have peaked at about 110,000. He sees evidence that the number of people contracting the disease has leveled off. He admits that the flu may be back in the fall, but he does not insist that it will be.

Donaldson told the Guardian that “There is a possibility the virus has had its fill of us for the moment.”

If the number of people getting the flu is dropping and there is some chance that it will not be back with any force, a lot of drug companies will be disappointed.

Douglas A. McIntyre