Generics on the Rise: A Big Threat to Big Pharma?

By
A A A
Share |

(Written by Alexander Crawford. Data sourced from Finviz.)

Pfizer’s Lipitor, the best-selling drug worldwide for several years running, loses its U.S patent status this November. The cholesterol drug brought in $10.7 billion in sales last year, according to Bloomberg.

In preparation for this, Pfizer is said to be studying whether the pill can be sold over-the-counter. “Previous attempts to sell over-the-counter versions of cholesterol-lowering drugs, including Merck & Co.’s Mevacor and Zocor, were unsuccessful because of the side effects. Patients using Lipitor need regular tests of their cholesterol and liver functioning, according to the drug’s label.” However, Pfizer was successful in moving its allergy medication Zyrtec over the counter in 2008.

According to an analysis by Bloomberg Industries, drugs with U.S. sales over $1 billion annually typically lose 73% of revenue in the first three months after generic copies are introduced.

Several pharma companies specialize in generic drugs to take advantage of opportunities such as this. The world’s leader in generic drugs, Teva Pharmaceuticals (TEVA), has been as aggressive as ever this year.

In an op-ed from John McCamant, editor of The Medical Technology Stock Letter, McCamant cites that “worldwide generic sales in 2010 were almost $11 billion, representing 68% of all sales. Generic sales grew 17% from 2009 to 2010, with the United States contributing slightly more than half (53%) of all sales.”

McCamant believes that these trends for generics will continue to increase thanks to big pharma’s ongoing “patent cliff” and governments drive to cut costs. He then recommends Teva Pharmaceuticals for its aggressive push into less-mature markets and the Japanese generics market, its recent acquisition of Cephalon, and Teva’s leading position in the treatment for multiple sclerosis with its drug Copaxone.

Being a generics drug manufacturer does come with its fair share of problems, however. GlaxoSmithKline (GSK) and Pfizer just announced a lawsuit against Teva for infringing on their U.S. patent for HIV drug Epzicom.

Do you think big pharma’s “patent cliff” represents a real growth opportunity for generic drug makers? 

To help, we provide some useful data on the major generic drug companies:

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

1. Teva Pharmaceutical Industries Limited (TEVA): Drug Manufacturers Industry. Market cap of $34.17B. The stock is currently stuck in a downtrend, trading 15.1% below its SMA20, 18.55% below its SMA50, and 22.05% below its SMA200. It's been a rough couple of days for the stock, losing 16.5% over the last week.

2. Watson Pharmaceuticals Inc. (WPI): Drugs Industry. Market cap of $8.05B. It's been a rough couple of days for the stock, losing 9.88% over the last week.

3. Mylan, Inc. (MYL): Drugs Industry. Market cap of $7.62B. The stock is a short squeeze candidate, with a short float at 7.59% (equivalent to 5.48 days of average volume). The stock is currently stuck in a downtrend, trading 19.65% below its SMA20, 21.38% below its SMA50, and 19.47% below its SMA200. It's been a rough couple of days for the stock, losing 19.28% over the last week.

4. Salix Pharmaceuticals Ltd. (SLXP): Drugs Industry. Market cap of $1.91B. The stock is a short squeeze candidate, with a short float at 8.8% (equivalent to 6.6 days of average volume). The stock is currently stuck in a downtrend, trading 18.4% below its SMA20, 18.15% below its SMA50, and 20.97% below its SMA200. It's been a rough couple of days for the stock, losing 13.95% over the last week.

5. Par Pharmaceutical Companies Inc. (PRX): Drugs Industry. Market cap of $992.07M. The stock is currently stuck in a downtrend, trading 13.95% below its SMA20, 14.68% below its SMA50, and 18.18% below its SMA200. It's been a rough couple of days for the stock, losing 12.6% over the last week.

6. Akorn, Inc. (AKRX): Drugs Industry. Market cap of $678.87M. The stock is a short squeeze candidate, with a short float at 7.36% (equivalent to 5.3 days of average volume). The stock has gained 109.94% over the last year.

7. Sagent Pharmaceuticals, Inc. (SGNT): Drugs Industry. Market cap of $610.95M. The stock is a short squeeze candidate, with a short float at 10.75% (equivalent to 6.76 days of average volume). The stock is currently stuck in a downtrend, trading 15.42% below its SMA20, 17.37% below its SMA50, and 12.33% below its SMA200. It's been a rough couple of days for the stock, losing 14.82% over the last week.

8. Hi Tech Pharmacal Co. Inc. (HITK): Drugs Industry. Market cap of $313.53M. The stock is a short squeeze candidate, with a short float at 14.69% (equivalent to 8.01 days of average volume). It's been a rough couple of days for the stock, losing 12.51% over the last week.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


Kapitall

Kapitall

More from Kapitall:

Related Videos

Stocks

Referenced

Most Active by Volume

89,970,926
  • $16.15 ▲ 0.12%
77,131,582
  • $58.94 ▼ 1.31%
67,336,935
  • $26.56 ▲ 1.68%
48,814,124
  • $86.20 ▲ 0.02%
47,526,126
  • $23.21 ▲ 0.78%
44,660,424
  • $23.91 ▲ 6.36%
38,799,699
  • $4.289 ▲ 4.36%
36,199,890
  • $40.01 ▼ 0.97%
As of 4/17/2014, 04:07 PM