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The New Pfizer: 6 Drug Companies with Bullish Short Trends
12/15/2011 7:24:00 PM
(Written by Rebecca Lipman. Short data sourced from Yahoo! Finance.)
Pfizer, the world’s largest drug maker, is having a very interesting week. The company has authorized a $10 billion share buyback program after losing about 15% of market in the face of heavy competition from generic drug makers.
Pfizer lost U.S. patent protection for its blockbuster cholesterol pill, Lipitor, at the end of last month. It quicklygained a rival from Ranbaxy Laboratories Ltd. (RBXY), which was cleared by U.S. regulators to sell copies of the drug.
The drug earned Pfizer $10.7 billion in revenue in 2010. But they can wave those figures goodbye: The first week the generic version was available (ending December 2) it took away 15% of Lipitor’s market.
“Copycat Lipitor may generate as much as $650 million for Ranbaxy in its first 180 days of sale, according to the median estimate of five Mumbai-based analysts surveyed by Bloomberg.”
Pfizer took another hit when WellPoint (WLP), the largest insurer by enrollment, said it will support use of a generic version by its members by assigning a lower co-pay to the copycat than to the brand drug. (via Bloomberg)
Buybacks and Dividends
In addition to a $10 billion share-buyback program, Pfizer will boost quarterly dividends from 20 to 22 cents per share. “The dividend increase and new share repurchase program are a testament to our continued commitment to enhancing shareholder value and to our continued confidence in the business.”
Interested to know what informed investors are thinking about the drug manufacturers industry?
We ran a screen on the major drug manufacturers industry for stocks seeing the most significant decreases in shares shorted month-over-month, indicating that short sellers are more bullish about these names than before.
All companies on the list below have market caps above $50 million, and a share price above $1.
Do you agree with short sellers’ optimism for these names? Use this list as a starting point for your own analysis.
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