Big Dividend Pharmaceutical Stock Now Jefferies Top Global Sector Pick

Health and Healthcare

Published: February 22, 2016 11:40 am

Last Updated: January 13, 2020 12:53 pm

Despite all the negative chatter about drug pricing, the fact of the matter is that the top companies not only produce drugs that save and change lives, they consistently reinvest millions of dollars not only to have a solid pipeline, but to protect their current franchise drugs. The combined effect of a negative year in the markets and sharp political rhetoric has made the entry point in many of the top stocks very appealing for investors.

In a new research report, Jefferies shuffles some of the pharmaceutical stocks in its coverage universe and a beaten-down dividend leader is now the top pick globally. Two other top domestic pharmaceutical stocks are in the Jefferies top five and are also priced for solid entry points for growth and income accounts looking for some new ideas.

AbbVie

This now is the top global pharmaceutical stock at Jefferies, and it is also on the Franchise Picks list. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries.

One of the biggest concerns with AbbVie is what eventually might happen with anti-inflammatory therapy Humira, which generated $14 billion in sales in fiscal 2015. That $14 billion is the most any drug has recorded during a single year and represents a gigantic part of the company’s overall earnings. The problem with Humira is that biosimilars and generics are itching to enter the market, with Amgen leading the charge, and some Wall Street analysts project that AbbVie may have a difficult time stopping that trend. The Jefferies analysts have become much more positive on the stock and feel that the company’s response to Coherus’ Inter Partes Review (IPR) on key Humira patents looks solid, and an IPR denial is a very real possibility.