The 5 Best-Performing Big Pharma Stocks of 2013: BMY, ABBV, RHHBY, JNJ, AZN


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The S&P 500 soared more than 32% in 2013, and several big pharma companies, namely Bristol-Myers Squibb (NYSE: BMY), AbbVie (NYSE: ABBV), Roche (NASDAQOTH: RHHBY), Johnson & Johnson (NYSE: JNJ), and AstraZeneca (NYSE: AZN) also performed extraordinarily well. The following slideshow reveals why these companies beat out their big pharma peers and what drove their strong performances in 2013.

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The 5 Best-Performing Big Pharma Stocks of 2013: BMY, ABBV, RHHBY, JNJ, AZN

  1. 1. The 5 Best-Performing Big Pharma Stocks of 2013
  2. 2. The Big Pharma Industry • The traditional “big pharma” industry has changed rapidly in the last decade. • Many companies have adopted unique business models to deal with the effects of the patent cliff. • Some, like Johnson & Johnson, remain diversified, while others, such as AbbVie, are more focused on pharmaceuticals.
  3. 3. Today’s Biggest Pharma Companies Company Name Ticker Market Cap (Billions) Johnson & Johnson JNJ Roche RHHBY 235.9 Pfizer PFE 197.8 Novartis NVS 192.7 Merck MRK 145.3 Sanofi SNY 138.0 GlaxoSmithKline GSK 127.2 Novo Nordisk NVO 99.3 Bristol-Myers Squibb BMY 87.0 AbbVie ABBV 83.1 AstraZeneca AZN 73.8 Eli Lilly LLY 55.2 Source: Yahoo! Finance, market close on January 3, 2013. $259.2
  4. 4. Big Pharma Performance • Business models may be diverse, but 2013 was a fairly strong year across the board for stocks in this industry. • Shares of all the big pharmas appreciated, but which five stocks were the biggest winners and why did they soar?
  5. 5. #5 AstraZeneca
  6. 6. AstraZeneca’s Solid 2013 • This company may be in the middle of a turn-around, but the stock had a strong performance in 2013. • CEO Pascal Soriot has been shaping a new longterm strategy for the company, patching up its pipeline, and is determined to grow its diabetes business.
  7. 7. AstraZeneca’s Solid 2013 • Several acquisitions last year, including Omthera , Amplimmune, and Pearl Therapeutics, helped to boost its pipeline. The company also acquired BristolMyers Squibb’s stake in their shared diabetes business. • The market was enthusiastic with these moves last year, but the company’s top drug, Crestor, will lose market exclusivity in 2016. The company needs its diabetes franchise to grow and more FDA approvals in the next couple of years to offset this loss.
  8. 8. #4 Johnson & Johnson
  9. 9. Johnson & Johnson’s Solid 2013 • Despite product recalls and marketing scandals over the last few years, the market loved this stock in 2013. Its growing pharma division has been a highlight and is poised to continue its growth. • Last April, the company launched diabetes drug Invokana, the first SGLT2 inhibitor to be approved in the US.
  10. 10. Johnson & Johnson’s Solid 2013 • The company also won two additional FDA approvals in November. The first was ibrutinib, a cancer drug codeveloped with Pharmacyclics. The second was Olysio, a drug that treats hepatitis-C. • Pharmaceuticals comprise around 40% of JNJ’s sales, but this division is set to continue it’s solid performance and is complemented by medical devices and consumer health units.
  11. 11. #3 Roche
  12. 12. Roche’s Solid 2013 • Swiss-based Roche is known for both its pharma and diagnostics businesses. It’s also a leader in the oncology space. • Last year’s performance was partly fueled by the FDA approval of cancer Kadcyla, a drug developed with biotech ImmunoGen.
  13. 13. Roche’s Solid 2013 • In October, the company also launched Perjeta, another drug that strengths its breast cancer treatment franchise • Sales of Kydcyla and Perjeta, along with its longstanding blockbuster Herceptin, collectively increased 12% year-over-year last quarter. • Roche is set to continue growing its oncology franchise.
  14. 14. #2 AbbVie
  15. 15. AbbVie’s Solid 2013 • AbbVie was spun-out of medical device giant Abbott at the start of 2013, and seemed to have several problems. • It lost market exclusivity for drugs like Tricor and Trilipix, and Humira is set to lose patent protection in 2016. Many investors were skeptical because of these risks …
  16. 16. AbbVie’s Solid 2013 • Humira, however, continues to be the best-selling drug in the world. Year-over-year sales jumped 15.7% to reach $7.6 billion in the first nine months of 2013. • AbbVie is also developing a treatment for hepatitis-C that could help millions of patients if approved by the FDA. The company’s main competition in this space is widely believed to be Gilead.
  17. 17. AbbVie’s Solid 2013 • In addition, it has partnerships with biotech companies like Galapagos to develop novel autoimmune disease treatments. • AbbVie also has a number of drugs in mid-stage trials for oncology, multiple sclerosis, and immunology. • Strong sales, positive results from clinical trials, and a promising pipeline excited investors in 2013.
  18. 18. BMY data by YCharts #1 Bristol-Myers Squibb
  19. 19. Bristol-Myers Squibb’s Solid 2013 • Bristol headed into 2013 following the failure of its experimental hepatitis-C treatment BMS-986094. • However, the market quickly became excited by clinical trial results from nivolumab, its cancer fighting PD-1 drug.
  20. 20. Bristol-Myers Squibb’s Solid 2013 • Much of Bristol’s stunning run in 2013 had to do with enthusiasm surrounding the potential of this drug. • Bristol also sold the diabetes business it shared with AstraZeneca at the very end of the year, and will focus on higher margin oncology and specialty drugs. Investors will be keenly watching its pipeline this year.
  21. 21. You might also enjoy … Our Top Stock Pick for 2014