The Zacks Analyst Blog Highlights: Bristol-Myers Squibb, Pfizer, Alexion Pharmaceuticals, Gilead Sciences and AGCO

Zacks

For Immediate Release
 
Chicago, IL – March 25, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Bristol-Myers Squibb (BMY-Free Report), Pfizer Inc. (PFE-Free Report), Alexion Pharmaceuticals, Inc. (ALXN-Free Report), Gilead Sciences Inc. (GILD-Free Report) and AGCO Corporation (AGCO-Free Report).
 
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Here are highlights from Monday’s Analyst Blog:

Breakthrough Therapy Status for Pfizer Drug
 
Breakthrough Therapy designation is a status provided under the Food and Drug Administration Safety and Innovation Act (:FDASIA) of 2012 to potential candidates that show superiority over existing therapies for the treatment of serious or life threatening diseases or conditions. The designation helps fasten the development and review process for experimental drugs targeting serious and life-threatening diseases. A candidate with Breakthrough Therapy designation could benefit from the FDA’s existing fast track development program features as well as more intensive FDA guidance on efficient development of the candidate.
 
Ever since the Act was enacted, quite a few pipeline candidates like Bristol-Myers Squibb’s (BMY-Free Report) all-oral hepatitis C virus (:HCV) combination of daclatasvir and asunaprevir have received Breakthrough Therapy designation from the FDA.
 
A recent recipient is Pfizer Inc.’s (PFE-Free Report) investigational vaccine, bivalent rLP2086. Pfizer is developing the vaccine for the prevention of invasive disease caused by Neisseria meningitidis serogroup B in people in the age group of 10 years–25 years. Pfizer intends to file a Biologics License Application (:BLA) for rLP2086 vaccine by mid-2014. We note that Pfizer gained Breakthrough Therapy status for its breast cancer candidate, palbociclib, last year.
 
Meanwhile, Pfizer is looking to expand the label of its pneumonia vaccine, Prevenar 13. The company presented detailed results from a Community-Acquired Pneumonia Immunization Trial in Adults (CAPiTA) study on Prevenar 13 earlier this month.  
 
Pfizer carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector include Alexion Pharmaceuticals, Inc. (ALXN-Free Report) and Gilead Sciences Inc. (GILD-Free Report). Both stocks carry a Zacks Rank #1 (Strong Buy).
 
AGCO Slips to Strong Sell
 
On March 22, Zacks Investment Research downgraded AGCO Corporation (AGCO-Free Report), a manufacturer of agricultural equipment, to a Zacks Rank #5 (Strong Sell).
 
Why the Downgrade?
 
Shares of AGCO fell 1.39% after the company projected weak demand outlook for 2014 in its fourth-quarter 2013 earnings call on Feb 4, due to reduced farm income.
 
Despite adjusted earnings in the fourth quarter improving 41% year over year to $1.40, AGCO reiterated its full-year 2013 earnings per share guidance of $6.00, reflecting a 0.2% year-over-year dip. The absence of an extension of current depreciation tax benefits beyond 2013 (in the U.S.) and potential FINAME borrowing cost increases (in Brazil) could put pressure on AGCO’s earnings. In addition, the company anticipates the benefits from higher gross margins to be offset by higher engineering and market development costs.
 
Total unit production for AGCO increased about 5% in from 2012. The company expects production volumes for the full year 2014 to be flat as compared with 2013, with decline in higher horsepower equipment balanced by increase in lower horsepower machines.
 
In addition, product demand is expected to deteriorate in the near term due to fall in farm income and crop prices as well as a less favorable renewable fuel standard (:RFS). Notably, the RFS is likely to pull down the demand of corn, thereby adversely affecting the need for agricultural equipment as well.
 
Moreover, strong growth in South America and a modest performance in North America are expected to be offset by a moderate decline in Western Europe.
 
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