Pfizer Gets Good News For Pneumonia, Bone-Thinner Drugs


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With a market capitalization north of $200 billion, you can bet that Dow componentPfizer ( PFE ) has a lot going on in its pipeline.

On Monday, the company released results of a post-approval study that showed its pneumonia vaccine Prevenar 13 prevented the disease in a study of elderly subjects. Pfizer said the study met its primary endpoint. Full results will be released at a conference in India on March 12.

The drug could significantly increase sales for Pfizer down the line. Initially, the drug was approved only for infants but in 2012 received approval for adults over age 50. The drug competes with Merck's Pneumovax.

Late last week, Pfizer also announced encouraging phase three results for Eliquis -- a blood-thinner drug it's developing withBristol-Myers Squibb ( BMY ).

Earlier this month, Pfizer won a court ruling that will block generic versions of its No. 1 product, Lyrica, until December 2018. The drug, used to treat shingles, fibromyalgia, epilepsy and hot flashes, made up 9% of total revenue in 2013. It's become an important drug for Pfizer since the company lost patent protection on its cholesterol pill Lipitor.

Robust earnings growth has been hard to come by for Pfizer in recent years. In 2013, annual earnings grew a scant 6% from 2012. This year, annual profit is seen rising 2%, with growth seen picking up a bit in 2015 to 4%. The good news is that annual pretax margin in 2013 accelerated for the third straight year, coming in at 41%, up from 38% in 2010.

Fundamentals matter to many dividend investors, but so does a healthy yield, and that's where Pfizer shines with a current yield of 3.3%. It's one of 12 stocks currently in the Dow that yield more than 3%.

Pfizer is currently setting up in a base-on-base pattern. It closed Monday just below a potential buy point of 32.10, although shares aren't under meaningful accumulation yet.

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

This article appears in: Personal Finance Investing Ideas
Referenced Stocks: PFE , BMY

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