A 130 / 30 Global Pharma Investing Strategy |
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Wednesday, 04 November 2009 18:52 |
The list of brand drug companies with significant patent expiration exposure over the next 2-3 years includes Pfizer (NYSE: PFE), GlaxoSmithKline (NYSE: GSK), Takeda Pharma (OTC: TKPHY.PK), Sanofi-Aventis (SNY), AstraZeneca (AZN), and Merck (MRK). The breakdown by region for the companies in this index includes U.S. (27%), India (27%), Europe (16%), China (18%), Japan (6%), and other (6%). This index has been tracked at the Investars YOU website since 6/24/09 at a starting value of $1000 and currently includes a total of 73 stocks with a last closing price of $1305.48 for a gain of approximately 30.5% on an equal-weight basis for the entire period and gain of about 15.5% in the past three months. Since there is a total of 73 stocks in the generic drug index; a semi-active ETF structure would be idea for selecting the top 30-40 rated companies on a monthly or quarterly basis through a quantitative, rules-based system. According to IMS Health, the generic drug industry is growing at 7.8%, which is a faster pace than the worldwide market for pharmaceuticals. In addition, the National Association of Chain Drug Stores estimates that in 2007 the average retail price of generic prescription drugs was $34.34 as compared to a much higher (over 3X) average price for brand name drugs at $119.51. Other factors in favor of the global generic drug industry include approximately $70 billion in brand name drug patent expirations through 2012, a projected increase in generic drug substitution rates from 65% to over 70%, and continued industry consolidation of small / mid-cap generic drug companies by industry leaders such as Teva Pharma (NASDAQ: TEVA), Mylan Labs (NYSE: MYL), and India-based Sun Pharmaceuticals (BOM: 524715). Disclosure: No positions "Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'. Add this page to your favorite Social Bookmarking websites ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |