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Four Upcoming Catalysts That Could Move Pharmaceutical Stocks

Trey Thoelcke

Wall Street firms are famous for their ability to throw conference after conference, year after year. Some are highly respected, and a must-attend for investment firms and portfolio managers. Others are strictly boondoggles for people looking to get out of town and have a good time. One of the most respected events is the Cowen Healthcare conference, which recently wrapped up the 34th event, where the respected Wall Street boutique firm hosted some of the top health care companies in the world.

In a new research report, the Cowen analysts posted a list of some of the top new data points cited at the conference by large cap pharmaceutical companies concerning upcoming events and drugs. Some of the information is new and may have a huge effect on the stocks as the year progresses.

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Here are four of the top new insights that were presented at the recent Cowen 2014 Healthcare Conference.

Bristol-Myers Squibb Co. (BMY) announced that its new drug nivolumab plus Yervoy will move to a Phase III trial in non-small cell lung cancer (NSCLC) by year end. The Cowen team thinks that is a key data point and the drug could have $500 million in sales in 2016 and $5 billion by 2020. The company is believed to be most advanced in immune oncology, given that it has multiple Phase III studies underway, and it is pursuing more combinations than competitors and mainly with its own assets. The company pays shareholders a 2.7% dividend. The Thomson/First Call price target for the stock is $55.06. Bristol-Myers closed Friday at $55.83.

Eli Lilly & Co. (LLY) had some positive news for investors. The Cowen experts expect Revel to show that its drug ramucirumab delivers a 1.5- to 2-month benefit over docetaxel in second line NSCLC, and that would be clinically very meaningful for the company. Ramucirumab sales are forecast at $200 million in 2015 and $2 billion in 2020. Investors are paid a very solid 3.3% dividend. The consensus price target is $57.24. Shares closed Friday at $58.59.

Merck & Co. Inc. (MRK) is a company that the Cowen team thinks is ready to sell or spin off its animal health business. This could provide the company with needed capital for other areas and may make for a top initial public offering (IPO) at some point later this year or in 2015. The pharmaceutical giant pays shareholders a very solid 3.1% dividend. The consensus price target it $56.11. Merck closed Friday at $57.47.

Pfizer Inc. (PFE) updated investors and physicians at the conference on the Phase II trial results on palbociclib for advanced breast cancer. The doctors on the breast cancer panel at the conference were much more optimistic than previously about the possibility of palbociclib being filed and approved on Phase II data in first line advanced breast cancer. Preliminary/interim overall survival data will be presented at AACR on April 6. The Cowen team pegs palbociclib sales at $3 billion in 2020. Investors are paid a 3.2% dividend. The consensus price target is $33.69. Pfizer closed Friday at $32.43.

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The continued geopolitical situation in Russia is only going to make these top names more in demand by investors looking for growth and a degree of safety. While they will never be confused with skyrocketing momentum stocks, these top names are a solid addition to any stock portfolio. Their solid dividends also make them among the best candidates for total return.

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