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Tracking Dividends in Biotech: Who Follows Amgen in Payouts? (AMGN, PFE, MRK, BIIB, CELG, ALXN, CBST, PDLI, REGN, VRTX)

Administrator — Wed, 04 Jan 2012 13:01:10 +0000

For several years it has been the case that Amgen Inc. (NASDAQ: AMGN) was considered a biotech though it had at least some of the same problems of Big Pharma players like Pfizer Inc. (NYSE: PFE) and Merck & Co. (NYSE: MRK). The difference is that Amgen refused for ages to pay a dividend. 2011 marked a change in its dividend policy.

Amgen’s current dividend is 2.3%, which is rather high for a biotech stock. It also should be noted that the $64.00 price is above the stock’s old former rangebound levels of $50.00 to $60.00. Pfizer currently yields 3.7%, but that is about to rise to closer to 4%, and Merck yields about 4.50% after its dividend hike.

The question for 2012 is simple: Which biotech stocks will be among the second waves to initiate paying a dividend? By our count, these are the biotech outfits that might entertain following Amgen’s dividend path: Biogen Idec Inc. (NASDAQ: BIIB), Celgene Corporation (NASDAQ: CELG), Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), PDL BioPharma, Inc. (NASDAQ: PDLI), Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN), and Vertex Pharmaceuticals Inc. (NASDAQ: VRTX).

We would have evaluated the chances of Gilead Sciences Inc. (NASDAQ: GILD) initiating a dividend, but this $11 billion proposed buyout of Pharmasset, Inc. (NASDAQ: VRUS) is likely to keep Gilead tied up for quite some time.

Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) is close to all-time highs above $70 and is now worth a whopping $13.2 billion. Estimates are $1.30 EPS for 2011 and $1.66 EPS for 2012, making this one have a much higher valuation while it is still rapidly growing. Some investors may expect that it could start paying out a dividend, but it is too soon by our take today, even with a $445 million balance of cash and liquidity with almost no long-term debt.

Biogen Idec Inc. (NASDAQ: BIIB) has estimates of $5.89 EPS in 2011 and $6.31 EPS in 2012. The company had only about $3 billion in cash and investments at the end of September versus a current market cap of about $27 billion. 2011 was the year that investors decided to give up on worrying about the very rare PML cases in TYSABRI, and that allowed Biogen shares to rise almost 60% in 2011. If Biogen decides to get off the no-dividend bandwagon soon, we would only look for an initial payout of $1.00 on an annualized basis for a while.

Celgene Corporation (NASDAQ: CELG) may still be too new of an earnings story to start expecting a dividend. The earnings estimates are $3.80 EPS in 2011 and $4.51 EPS in 2012. With almost $2.6 billion in cash and investments, its market cap is larger than Biogen’s at $30 billion.

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) managed an incredible breakout year as its drugs treat hospital-borne infections, with nearly a 100% share price gain in 2011. The market cap is now about $2.45 billion, and it had nearly $1 billion in cash and liquidity before a recent $221 million acquisition versus about $450 million in long-term debt. Cubist probably could start to pay a dividend if it wants to, but the company has decided to be an acquirer rather than hoarding cash or going defensive. Chances are that it may need to hold on to its cash while it absorbs Adolor and anything else it is considering.

PDL BioPharma, Inc. (NASDAQ: PDLI) has been a dividend payer from its patent royalties, but some payments have been one-time payments until its most recent $0.15 payout for each of the past four quarters. The company also recently forecast a 5% revenue drop and investors are already braced for lower royalty payments. The company recently lost its CFO after only about three years on the job and we really do not like to see CFOs leave biohealth companies. Estimates are $1.18 EPS for 2011 and $1.38 EPS in 2012, but it has about $225 million in cash and liquidity versus a market cap of $867 million. The company may just stick with its current payout structure’s high yield as is until (or if) it can secure another large patent license.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) is worth some $5.1 billion or so in market capitalization and is fresh off the news that it settled with Genentech over U.S. opthalmic sales of the eye drug EYLEA with a patent case still brewing, but with Regeneron agreeing to pay out $60 million if sales reach $400 million and it will pay royalties out as well. With cash and liquidity of near $500 million at then end of September we think it is a bit premature to ask this one to start shelling out its cash to shareholders yet, considering it is still expected to have a wide loss in 2012.

Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) is so far off of highs now that it seems unlikely investors are expecting much on the dividend front. The company is back on the path of growth after some changes and stumbles, and now its market cap is almost $7 billion. With this one it just feels too soon to expect any dividends in reality. We could analyze all we want, but its new revenue growth is challenged by a cash balance of just over $800 million versus $400 million in long-term debt. What is interesting is that Vertex’s $0.30 EPS expected for 2011 is expected to be $4.55 EPS in 2012. It had a loss of $3.77 EPS in 2010. Maybe after another year or so we can evaluate its future dividend strategy.

After reviewing the great biotech sector’s larger components, it sure does not sound like many other than Biogen Idec Inc. (NASDAQ: BIIB) are really new prime-time dividend candidates for 2012, other than the high payout of PDL BioPharma, Inc. (NASDAQ: PDLI).

JON C. OGG

Filed under: Biotech, Dividend, Drug companies, Healthcare, Shareholder Issues Tagged: ALXN, AMGN, BIIB, CBST, CELG, MRK, PDLI, PFE, REGN, VRTX, VRUS

Top Analyst Upgrades & Downgrades (ALXN, BAC, F, HSP, ITRI, KND, NFLX, PX, RRC, THI, URBN, V)

Administrator — Thu, 27 Oct 2011 12:29:23 +0000

These are some of this Thursday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this morning.

Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) named Bull of the Day at Zacks.
Bank of America Corporation (NYSE: BAC) Cut to Equal-weight at Morgan Stanley.
Ford Motor Co. (NYSE: F) Maintained Neutral and cut target to $14 from $16 at Credit Suisse.
Hospira Inc. (NYSE: HSP) Raised to Buy at BofA/ML, but named Bear of the Day at Zacks.
Itron Inc. (NASDAQ: ITRI) Started as Outperform with $60 target at Credit Suisse; maintained Buy and $50 target at Canaccord Genuity.
Kindred Healthcare, Inc. (NYSE: KND) named as Value stock of the day at Zacks.
Netflix, Inc. (NASDAQ: NFLX) Cut to Neutral at Citigroup (boy, how timely).
Praxair Inc. (NYSE: PX) Cut to Underperform from Buy at BofA/ML.
Range Resources Corporation (NYSE: RRC) Reiterated Sell at Canaccord Genuity.
Tim Hortons, Inc (NYSE: THI) Started as Neutral at Credit Suisse.
Urban Outfitters Inc. (NASDAQ: URBN) Raised to Buy at Citigroup.
Visa Inc. (NYSE: V) Cut to Market Perform at FBR.

JON C. OGG

Filed under: Analyst Calls Tagged: ALXN, BAC, F, HSP, ITRI, KND, NFLX, PX, RRC, THI, URBN, V

The Serious Return of Stock Splits (CLH, OKS, OKE, ALXN, CERN, PLCM, CWT, OII, CSX, SIX, IIVI, FLO, CHD, PEIXD, C, AAPL, GOOG, NFLX)

Administrator — Wed, 08 Jun 2011 14:36:31 +0000

No money was injured while filming

Stock splits usually bring back memories of the old tech bubble and dot-com bubble. Fundamentally, nothing changes at the company other than that smaller investors get to invest in shares at a lower nominal share price. Now that the markets have recovered so much, with the recent weeks as an exception, we are seeing many companies with higher share prices starting to announce stock splits. There may even be more current stock splits pending and freshly affected than we can remember seeing in years.

We have seen major stock split announcements from the likes of many companies. Some of the larger splits are from the following: Clean Harbors, Inc. (NYSE: CLH); Oneok Partners LP (NYSE: OKS); Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN); Cerner Corporation (NASDAQ: CERN); Polycom, Inc. (NASDAQ: PLCM); California Water Service Group (NYSE: CWT); Oceaneering International, Inc. (NYSE: OII); CSX Corp. (NYSE: CSX); Six Flags Entertainment Corporation (NYSE: SIX); II-VI Inc. (NASDAQ: IIVI); Flowers Foods, Inc. (NYSE: FLO); and Church & Dwight Co. Inc. (NYSE: CHD). We even have a fresh reverse stock split from Pacific Ethanol, Inc. (NASDAQ: PEIXD). You might think it learned from Citigroup, Inc. (NYSE: C) but Pacific Ethanol did not have a choice if it wanted to keep its listing.

There is also no way to have an article about stock splits without pondering when or what it would take for great companies like Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG) or Netflix, Inc. (NASDAQ: NFLX) to consider splitting their shares.

The road to stock splits has really become more common. We have not seen this many pending splits in years. These are not presented in any significant order.

Clean Harbors, Inc. (NYSE: CLH) announced a two-for-one stock split in the form of a dividend payable on July 26, 2011 to holders of record at the close on July 6, 2011.

On Tuesday came word from Oneok Partners LP (NYSE: OKS) that it planned to conduct a two-for-one split of its common and class-B units. This was its first split and you rarely see “units” split. It is 43% owned by its general partner, Oneok Inc. (NYSE: OKE).

In May came a biotech stock split from Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN). It previously approved a 2-for-1 stock split and shares began trading on a split-adjusted basis on May 23. Shares went from almost $100 to under $50…

Also in May came word from Cerner Corporation (NASDAQ: CERN) that its board of directors had approved a 2-for-1 stock split in the form of a dividend for holders of record on June 15, 2011. The distribution date for the new shares is June 24, 2011.

Polycom, Inc. (NASDAQ: PLCM) announced last month after its pact with H-P that its board of directors approved a two-for-one split of its stock in the form of a stock dividend for holders of record at the close of business on June 15.

Filed under: Dividend, Shareholder Issues, Stock Splits Tagged: AAPL, ALXN, C, CERN, CHD, CLH, CSX, CWT, FLO, GOOG, IIVI, NFLX, OII, OKE, OKS, PEIXD, PLCM, SIX

Top Analyst Upgrades & Downgrades (AONE, ACM, ALXN, AEP, LFC, CLNE, COP, CVA, CREE, ENOC, FXCM, IRM, MET, NYX, PCLN, SD, LEDS, VLO, WFSL)

Administrator — Tue, 17 May 2011 12:23:08 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday morning.

A123 Systems, Inc. (NASDAQ: AONE) Raised to Buy at BofA/ML.
AECOM Technology Corporation (NYSE: ACM) Raised to Buy at Argus.
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) Kept at Buy but Removed from Conviction Buy List at Goldman Sachs.
American Electric Power Co., Inc. (NYSE: AEP) Raised to Buy at BofA/ML.
China Life Insurance Co. Ltd. (NYSE: LFC) Raised to Neutral at Credit Suisse.
Clean Energy Fuels Corp. (NASDAQ: CLNE) Cut to Underperform at BofA/ML.
ConocoPhillips (NYSE: COP) Reiterated Buy and $95 target at Argus.
Covanta Holding Corporation (NYSE: CVA) Raised to Buy at BofA/ML.
Cree Inc. (NASDAQ: CREE) Cut to Underperform at BofA/ML.
EnerNOC, Inc. (NASDAQ: ENOC) Cut to Underperform at BofA/ML.
FXCM Inc. (NYSE: FXCM) Cut to Sell at Citigroup.
Iron Mountain Inc. (NYSE: IRM) Started as Buy at Stifel Nicolaus.
MetLife Inc. (NYSE: MET) Reiterated Buy with $54 target at Argus.
NYSE Euronext Inc. (NYSE: NYX) Cut to Hold at Argus.
Priceline.com Inc. (NASDAQ: PCLN) Maintained Outperform as Bull of the Day at Zacks.
SandRidge Energy, Inc. (NYSE: SD) Started as Neutral at Baird; Started as Outperform at Morgan Keegan.
SemiLEDS Corporation (NASDAQ: LEDS) Cut to Underperform at BofA/ML.
Valero Energy Corporation (NYSE: VLO) Maintained Strong Buy as Value at Zacks.

Washington Federal Inc. (NASDAQ: WFSL) Cut to Underperform as Bear of the Day at Zacks.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: ACM, AEP, ALXN, AONE, CLNE, COP, CREE, CVA, ENOC, FXCM, IRM, LEDS, LFC, MET, NYX, PCLN, SD, VLO, WFSL

M&A Watch: Biotech Deals Keep Rolling, Who Is The Next Buyout Target? (TEVA, VRX, CEPH, CRA, ALXN, DNDN, CBST, HGSI, UTHR, CADX, AMAG, SGMO)

Administrator — Mon, 02 May 2011 23:46:51 +0000

Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) has trumped Valeant Pharmaceuticals International, Inc. (NYSE: VRX) after it agreed to acquire Cephalon Inc. (NASDAQ: CEPH) in a $6.8 billion deal. The merger will give the mostly-generic Teva a portfolio of candidates in biotech drugs targeting cancer, pain, inflammatory diseases and more.

Teva’s $81.50 offer per share in cash may seem like a low premium of only about 6% to the closing price on Friday, but this is about 12% higher than Cephalon’s earlier $73 per share offer. More importantly, this is nearly a 40% premium to Cephalon’s pre-merger offers. The boards of directors of Teva and Cephalon have each voted in favor of this merger. What we are most curious about is simple… Which biotech and small pharmaceutical companies will be next to be acquired?

Celera Corporation (NASDAQ: CRA) is one we felt made sense for genomics, particularly when you consider that so much of Celera was raw cash. At that time of the deal, we also updated several other genomic possible targets.

Cephalon was noted as a possible buyout target even back at the end of January, and we gave a list with explanations on each of the following and more: Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN); Dendreon Corporation (NASDAQ: DNDN); Human Genome Sciences, Inc. (NASDAQ: HGSI); Cubist Pharmaceuticals Inc. (NASDAQ: CBST); United Therapeutics Corporation (NASDAQ: UTHR); Cadence Pharmaceuticals Inc. (NASDAQ: CADX); AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG); and Sangamo Biosciences Inc. (NASDAQ: SGMO). Details with explanations on that full list here.

Foreign buyers have an advantage of preying on US companies due to the incredibly weak U.S. Dollar and drug companies are looking to bolster sagging drug pipelines. The deals will continue, but the real risk for biotech investors is that there will be very few quality companies with real earnings left to invest in.

Not all of these other companies will be acquired. Some are too expensive though others offer a buyer a significant pipeline and emerging drug boost… for those willing to pay up.

JON C. OGG

Filed under: Biotech, Drug companies, Mergers and Buy Outs, Pharmaceuticals, Rumors Tagged: ALXN, ANAG, CADX, CBST, CEPH, CRA, DNDN, HGSI, SGMO, TEVA, UTHR, VRX

Top Analyst Upgrades & Downgrades (ALU, ALXN, AWK, NILE, CELL, CMG, CSCO, EPOC, EXPE, GDOT, IFF, ONXX, SPR, S, TUP)

Administrator — Fri, 11 Feb 2011 13:32:03 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Friday morning.

Alcatel-Lucent (NYSE: ALU) Raised to Neutral at Nomura.
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) Cut to Hold at Citigroup.
American Water Works Company, Inc. (NYSE: AWK) Started as Neutral with $29 target at Credit Suisse.
Blue Nile Inc. (NASDAQ: NILE) Cut to Hold at Citigroup.
Brightpoint Inc. (NASDAQ: CELL) Raised to Outperform as the Bull of the Day at Zacks Investment Research.
Chipotle Mexican Grill, Inc. (NYSE: CMG) Cut to Neutral at BofA/ML.
Cisco Systems, Inc. (NASDAQ: CSCO) Cut to Neutral at JPMorgan.
Epocrates, Inc. (NASDAQ: EPOC) Started as Market Perform at Morgan Keegan.
Expedia, Inc. (NASDAQ: EXPE) Cut to Neutral at BofA/ML; Cut to Hold at Deutsche Bank.
Green Dot Corporation (NYSE: GDOT) Cut to Sell at Janney.
International Flavors & Fragrances (NYSE: IFF) Raised to Overweight at Barclays.
Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) maintained as Underperform as the Bear of the Day at Zacks Investment Research.
Spirit AeroSystems Holdings Inc (NYSE: SPR) Cut to Neutral with $26 target at Credit Suisse.
Sprint Nextel Corporation (NYSE: S) Cut to Neutral with $5 target at Goldman Sachs.
Tupperware Brands Corporation (NYSE: TUP) Raised to Buy with $64 target at Argus.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: ALU, ALXN, AWK, CELL, CMG, CSCO, EPOC, EXPE, GDOT, IFF, NILE, ONXX, S, SPR, TUP

Stock Gains Skipping Biotech (GENZ, CELG, GILD, AMGN, BIIB, ALXN, MNKD, HGSI, VVUS, DNDN, BBH, XBI, QQQQ)

Administrator — Sat, 06 Nov 2010 16:07:04 +0000

Biotech and emerging pharma both seem to have almost no friends today despite a large stock market rally. It may take a resolution of the Genzyme Corporation (NASDAQ: GENZ) merger, and a successful resolution at that, to get interest going in the sector in. We have run a feature at BioHealthInvestor.com showing how many key biotech stocks are being left in the dust despite the improvement from tax extensions, QE2, the move to risk-assets, and general economic improvements.

Those issues covered are Celgene Corporation (NASDAQ: CELG), Gilead Sciences Inc. (NASDAQ: GILD), Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN), MannKind Corp. (NASDAQ: MNKD), Human Genome Sciences Inc. (NASDAQ: HGSI), VIVUS Inc. (NASDAQ: VVUS), and Dendreon Corporation (NASDAQ: DNDN)… most of which were flops this last week while the NASDAQ and the broader stocks performed well. We also compared the Biotech HOLDRs (NYSE: BBH) and SPDR S&P Biotech (NYSE: XBI) to the PowerShares QQQ (NASDAQ: QQQQ) to highlight some of the underperformance.

Read the full report at BioHealthInvestor.com

Filed under: Biotech, Drug companies, Pharmaceuticals, The Week Tagged: ALXN, AMGN, BBH, BIIB, CELG, DNDN, GENZ, GILD, HGSI, MNKD, QQQQ, VVUS, XBI

Top Analyst Upgrades and Downgrades (ALXN, ACAS, ATHN, BCSI, CERN, SCHW, CL, FMCN, NVDA, PG, RVBD)

Administrator — Thu, 03 Jun 2010 12:29:32 +0000

These are this Thursday morning’s top analyst upgrades, downgrades and initiations seen from Wall Street research calls:

Alexion Pharmaceuticals (NASDAQ: ALXN) Raised to Outperform at Oppenheimer.
American Capital, Ltd. (NASDAQ: ACAS) Cut to Sell at Stifel Nicolaus.
Athenahealth, Inc. (NASDAQ: ATHN) Raised to Buy at Auriga.
Blue Coat Systems (NASDAQ: BCSI) Raised to Outperform at FBR.
Cerner Corp. (NASDAQ: CERN) Started as Market Perform at Avondale.
Charles Schwab Corp. (NASDAQ: SCHW) Raised to Outperform at FBR.
Colgate-Palmolive (NYSE: CL) Started as Hold at Stifel Nicolaus.
Focus Media Holding Ltd. (NASDAQ: FMCN) Started as Overweight at JPMorgan.
NVIDIA Corp. (NASDAQ: NVDA) Cut to Hold at Roth.
Procter & Gamble (NYSE: PG) Started as Buy at Stifel Nicolaus.
Riverbed Technology, Inc. (NASDAQ: RVBD) Raised to Outperform at FBR.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

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Filed under: Analyst Calls Tagged: ACAS, ALXN, ATHN, BCSI, CERN, CL, FMCN, NVDA, PG, RVBD, SCHW

Today’s Best Market Rumors (3/11/2010)

247wallst — Thu, 11 Mar 2010 13:48:13 +0000

Updated throughout the day.

Citigroup (C) may earn $20 billion in 2012 (FT)

Macquarie Group, Australia’s largest investment bank, is on the hunt for more U.S. assets. (Bloomberg)

Regulators have told Bank of America (BAC) management that the financial firm must become “much smaller” (Fox Business).

Apple (AAPL) is still making changes to the iPad ahead of its April 3 launch. (Forbes)

Biotechs Dendreon (DNDN), Allos Therapeutics (ALTH), Alexion Pharmaceuticals (ALXN) and Auxilium Pharmaceuticals (AUXL) are probable takeover targets (Barron’s)

Douglas A. McIntyre

Filed under: Rumors Tagged: AAPL, ALTH, ALXN, AUXL, BAC, C, DNDN

Top 10 Analyst Upgrades and Downgrades (ADM, ALXN, CBS, CPO, IBM, KAR, LXK, EDU, TSCO, XRX)

247wallst — Wed, 20 Jan 2010 13:24:33 +0000

These are this Wednesday’s top 10 analyst upgrades, downgrades, and initiations seen in Wall Street research calls:

Archer-Daniels Midland (NYSE: ADM) Raised to Buy at Citigroup.
Alexion Pharmaceuticals (NASDAQ: ALXN) Started as Perform at Oppenheimer.
CBS Corp. (NYSE: CBS) Raised to Buy at Jefferies.
Corn Products (NYSE: CPO) Cut to Hold at Citigroup.
IBM (NYSE: IBM) Raised to Buy at Canaccord.
KAR Auction Services (NYSE: KAR) started as Outperform at Credit Suisses and RBC Capital.
Lexmark International (NYSE: LXK) Started as Market Perform at JMP Securities.
New Oriental Education & Technology Group (NYSE: EDU) Cut to Neutral at Credit Suisse.
Tractor Supply Co. (NASDAQ: TSCO) Cut to Neutral at Goldman Sachs.
Xerox Corp. (NYSE: XRX) Started as Market Perform at JMP Securities.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG

Posted in Analyst Calls Tagged: ADM, ALXN, CBS, CPO, EDU, IBM, KAR, LXK, TSCO, XRX