This top company remains a favorite at Jefferies and ranks as the fourth top global pick. Bristol-Myers Squibb Co. (NYSE: BMY) is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.
The company recently announced that Biogen will pay $300 million upfront to Bristol-Myers to license a palsy drug with a $2 billion market opportunity and the potential to use that to treat Alzheimer’s. The company will pay a total of $410 million in milestone payments and a tiered double-digit royalty to license a drug known only as BMS-986168. The drug just completed Phase 1 testing in progressive supranuclear palsy.
Shareholders receive a 2.95% dividend. The $65 Jefferies price objective compares with the consensus target price of $55.38 and the most recent close at $52.83.
This stock also has substantial upside potential. Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.
The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.
Last Friday, the U.S. Food and Drug Administration (FDA) declined to approve a new drug for rheumatoid arthritis made by Eli Lilly and partner Incyte. The FDA indicated that additional clinical data was needed to determine the most appropriate doses of the drug, Olumiant (baricitinib) and to further characterize safety concerns across treatment arms. The request for additional data possibly means more than a year’s delay for this important product for both companies, and it represents a break for other drugmakers who were expected to face tough competition from Olumiant.
Investors may want to watch the shares this week and see how the market reacts as they were down more than 4% Monday morning. Eli Lilly has been on a solid run since late last year, and a back-up in the share price could be just the ticket or investors looking to purchase shares.
Shareholders receive a 2.42% dividend. The Jefferies price objective is $97. The consensus target is $89.05, and shares closed most recently at $85.88.
This is the fifth ranked top global pick at Jefferies. Zoetis Inc. (NYSE: ZTS) engages in the discovery, development, manufacture and commercialization of animal health medicines and vaccines for livestock and companion animals in the United States and internationally.
The company offers anti-infectives that prevent, kill or slow the growth of bacteria, fungi, or protozoa; vaccines, which are biological preparations to prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response; and parasiticides that prevent or eliminate external and internal parasites, such as fleas, ticks and worms.
It also provides medicated feed additives that offer medicines to livestock; veterinarian solutions for anesthesia, pain management and the diagnosis of diabetes; and other pharmaceutical products, including pain and sedation, oncology, antiemetic, allergy and dermatology, and reproductive products. In addition, it offers other product categories comprising nutritionals and agribusiness services, as well as products and services in complementary areas consisting of biodevices, diagnostics and genetics.
Shareholders receive a 0.8% dividend. The $65 Jefferies price target is above the consensus target of $59.86. The shares closed at $53.10.
Despite the fact that the president wants to see lower drug prices, these things move slowly, and with the desire to replace Obamacare, the tax reform pledges and many other agenda items in the forefront, it is a back-burner item for now. Plus, with a nervous market, pharmaceuticals are always seen as a safer haven for investors.
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