There is great opportunity in healthcare. There is also quite a lot of risk. Politicians and consumers alike want lower drug prices. Patients want the best of the best options for devices, monitoring, and in treatments and cures and they seem to not care what the costs are. Over the last two decades, the world of biotech investing has changed drastically. It felt off in years past to predict that the large biotech companies were effectively becoming no different from Big Pharma giants.

At the start of 2019, 24/7 Wall St. highlighted how most of the large cap biotechs with market caps of $20 billion were in many cases screening out as being cheaper than their Big Pharma rivals. That was just a day ahead of the biggest biotech merger in some time. There are also many drug catalysts coming in the next 60 days. Now it’s time to look beyond earnings reports and see how the future guidance, which is generally more clear in healthcare than tech and industrials, values these companies going forward.

Earnings season can bring out some big surprises when it comes to corporate profits and the billions and billions of dollars in revenue opportunities. It turns out that Biogen Inc. (NASDAQ: BIIB) posted a gain in revenues and earnings beat expectations, but the shares were up less than 1% at $333.20 in the reaction. This has been a very range-bound stock as well, with its 52-week range of $249.17 to $388.67 not really looking that much different for most the last 5 years.

It turns out that Biogen’s multiple sclerosis drug Tecfidera is facing competition from newer treatments from the likes of Roche. Biogen has been counting on growth from the spinal muscular atrophy treatment called Spinraza, the first to market, but a 29% gain sales to $470 million was actually shown to be about $18 million less than expected by analysts as pricing pressure and dosing schedules appear to have limited the growth. And for the cost, Reuters noted that Spinraza has a list price of $750,000 in the first year of treatment in the United States and $573,000 in the United Kingdom.

After all this, Biogen’s 2019 adjusted earnings guidance was put in a range of $28.00 to $29.00 per share. The Thomson Reuters consensus estimate was $27.94. At the mid-point of the range, Biogen is valued at less than 12-times earnings and its market cap is $67 billion.

Now look at one of the top-two in Big Pharma earnings after the Pfizer Inc. (NYSE: PFE) report. The Dow Jones Industrial Average component has a value of $234 billion now that its shares have risen by 2.7% to $40.60 after its earnings.

Pfizer’s fourth quarter results were $0.64 in earnings per share (EPS) and $14.0 billion in revenue, which compared with consensus estimates of $0.63 in EPS and $13.91 billion in revenue. In the same period of last year, Pfizer said it had $0.62 in EPS and $13.7 billion in revenue. It’s just not much growth, and at the start of 2019 Pfizer began operating in its previously announced new commercial structure, reorganizing operations into three businesses of Pfizer Biopharmaceuticals Group (PBG), Upjohn and Consumer Healthcare.

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Looking ahead to the 2019 full year, Pfizer’s guidance was in the range of $2.82 to $2.92 EPS and revenue between $52.0 billion to $54.0 billion. Consensus estimates are calling for $3.00 in EPS and $53.54 billion in revenue. At the mid-point of the range, that values Pfizer at just 14 times expected earnings. As far as some segmental issues, there were two areas which partially offset each other: Innovative Health total revenues increased 8% year over year to $8.85 billion; and Essential Health total revenues decreased 7% to $5.12 billion.

Another casting member in the Big Biotech theme is Amgen Inc. (NASDAQ: AMGN) with a $122 billion market cap. Amgen took a serious analyst downgrade on Monday as Evercore ISI lowered its rating to In-Line from Outperform. If this doesn’t sound like a case where Big Biotech and Big Pharma are becoming one, then nothing else does either — it was cut because of patent concerns. Amgen is about to report earnings and the biotech giant is expected to report $3.27 EPS and $5.84 billion in revenues for the fourth quarter. Amgen’s recent drug approvals may be too recent to be adding major growth at this stage. Xgeva was approved in the United States and in Europe for preventing skeletal-related events in multiple myeloma patients, and later in 2018 the drug Blincyto secured approval in Japan and for the pediatric patient population in the United States.

Looking at the last quarter’s gains, Amgen’s third quarter revenue was up just 2% to $5.9 billion and product sales grew only 1% globally. Its adjusted earnings rose by 13% to $3.69 EPS, and that was from the revenue gains, a lower tax rate on the heels of tax reform and also with a lower share count from stock buybacks. These results aren’t awful by any means, but it’s still just not very much growth.

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If the 2019 consensus estimates hold up at $14.62 EPS (from $14.25 in 2018) and $22.94 billion in revenues (down from $23.4 billion in 2018), then Amgen is valued at just 13 times expected earnings. Amgen was last seen trading roughly flat at $192.00 ahead of earnings, and it has a 52-week range of $163.31 to $210.19 and a consensus analyst target price of $206.24.