To The Moon

At theJPMorgan Healthcare Conference in 2023, $Pfizer(PFE)$ , $AbbVie(ABBV)$ , $Amgen(AMGN)$ and other pharmaceutical giants all shared the latest news about the company.

Under the unstable economic environment, the value industries with lower risk are more preferred by investors. As of January 11, the medical industry posted a return of -4.88, ranking fifth among the 11 industries.

Pharmaceutical stocks in the healthcare sector tend to attract more attention from investors. As industry giants, pharmaceutical stocks often have the advantages of pricing power, patented drugs, deep moats and wide margins.

Although the earlier Inflation Reduction Act allowed health insurance to negotiate prices for the first time, making pricing a risk factor for companies. However, the timeliness of the law is not as high as expected, and many provisions will not take effect for many years, so the industry will have time to adapt to the law.

1.$AbbVie(ABBV)$  Beta 0.62

AbbVie outperformed the market last year, recording a positive gain of 19.36%. The company is one of the top 10 holdings in JPMorgan's stock premium ETF.

AbbVie is famous for its Humira series, and although Humira's patent will expire by 2023, its new immunological drugs Rinvoq and Skyrizi are expected to hold up the banner.

AbbVie has raised its 2025 sales forecasts for Skyrizi and Rinvoq to more than $17.5 billion, and peak sales of these drugs will exceed $21 billion by 2027, according to Reuters.

In addition to existing drugs, AbbVie is also actively promoting the development of new drugs, and plans to file regulatory applications for nine new drugs in 2023 alone, which is almost guaranteed to launch several new sources of revenue in the short term. On January 10th, AbbVie announced a partnership with Anima Biotech to develop small molecule mRNA therapy.

AbbVie is expected to report earnings per share of $3.67 this quarter, up 10.9% from a year earlier, and sales are estimated at $15.38 billion, up 3.3% from a year earlier, according to Zacks. Net income for the fiscal year was estimated at $13.87, up 9.2% from the previous year.

On average, Wall Street analysts estimate that the pharmaceutical giant's revenues and earnings will shrink slightly in 2023 due to the loss of the exclusivity of Humira, one of its most lucrative drugs. However, management expects the company to resume sales growth in 2024 and 2025.

2. $Amgen(AMGN)$ Beta 0.66

Amgen's stock was up 17% in 2022. Its top-selling drug, cancer drug Enbrel, is worth $6 billion a year in sales.

The $27.8 billion acquisition of Horizon Therapeutics, which Amgen completed last year with the highest takeover bid in the healthcare industry, will sharpen Amgen's focus on rare diseases, where drugs are easier to get approved.

Some analysts said the acquisition made investing in Amgen a "no-brainer".

For the recently quarter, Amgen earned $4.70 per share, compared with the Zacks consensus of $4.43, beating estimates by 6.09%.

For the third quarter of 2022, Amgen reported revenue of $6.6 billion, down 0.9% from the same period last year. However, the company's revenue beat analysts' expectations by $90m. Its cash flow also remained strong in the quarter, with free cash flow of $2.8 billion, compared with $2.2 billion in the same period last year.

Sales of its major drugs totaled $10.5 billion, up 16% from a year earlier, led by a 52% increase in generic Repatha and a 49% increase in Evenity.

3. $Pfizer(PFE)$ Beta 0.63

Pfizer CEO told the conference that it expects strong product growth to mitigate its non-COVID-19 business and exclusivity losses in the coming years. Pfizer's non-COVID-19 business is expected to lose about $17 billion from patent expirations between 2025 and 2030.

In its third-quarter report, Pfizer said it expected 2022 sales of $99.5 billion to $102 billion, including $34 billion from Comirnaty and $22 billion from Paxlovid.

As of December, Pfizer expected to launch 19 therapies in the next 18 months. This has the potential to generate $20 billion in annual revenue over time, according to Chief Commercial Officer Angela Hwang.

Pfizer also had two deals in 2022. The company is buying Biohaven Pharmaceutical Ltd. for $11.6 billion and Global Hematotherapy for $5.4 billion. Chief Business Innovation Officer Aamir Malik said the deals are helping Pfizer reach its goal, which generats $25 billion in revenue through business development initiatives by 2030.

Separately, Pfizer said the COVID-19 franchise will remain a multi-billion dollar revenue generator in the future, even as expectations flatline following a decline from peak sales in 2022.

4.$BioNTech SE(BNTX)$ Beta 0.26

BioNTech is working on an improved COVID-19 vaccine, and is also aggressively pursuing oncology products, with 19 oncology programs in 22 clinical trials, according to CEO Ugur Sahin.

Separately, BioNTech had agreed to buy British AI startup InstaDeep for $682 million to accelerate its biotech research and manufacturing capabilities.

Reuters estimates that COVID-19 vaccine revenue will reach US $18.2 billion in 2022 alone. BioNTech has enough money to advance its work on new cancer immunotherapy and other vaccines, and artificial intelligence will play a growing role.

On the financial front, BioNTech's total revenue for the first nine months of 2022 was 13 billion euros, most of which came from the company-approved COVID-19 vax, and the company raised its full-year 2022 revenue guidance to 16 billion to 17 billion euros.

Bank of America analyst Ahmed rates BioNTech a "buy" with a $239 price target, and a 60% upside range from the current price of 149.6.

5.$GlaxoSmithKline PLC(GSK)$ Beta 0.29

Speaking at JPM Healthcare Conference, GSK CEO Emma Walmsley highlighted GSK's many innovations in vaccines, including the development of a long-acting HIV injection, the strong commercial performance of the breakthrough Shingrix vaccine, and the recent FDA acceptance of its RSV vaccine application.

Walmsley said the company is currently developing 23 vaccine programs. GSK's RSV vaccine is particularly notable, with an overall efficacy of up to 82.6%, and is on track to be the first approved RSV vaccine.

For the most recent quarter, GSK earned $1.09 per share, compared with the Zacks consensus estimate of $0.90 per share, an increase of 21.11% over estimates.

GSK expects its new drugs and vaccines to account for about 60% of GSK's new drug sales growth in the 2022-2026 period.

6.$Bayer A.G.(BAYRY)$ Beta 1.12

Bayer also has several potential blockbuster drugs in the pipeline at a time when its best-selling eye drug Eylea and blood thinner Xarelto are at risk of having their patent protection expire.

At the JPM conference, Bayer said that Kerendia, a kidney drug, and Nubeqa, a treatment for prostate cancer, could see peak sales of up to 3 billion euros, according to bioSeedin.

The biggest growth driver will be asundexian, a new XIa factor inhibitor that is in Phase III trials to prevent strokes, atrial fibrillation and heart attacks. Peak sales could reach up to 5 billion euros, and approval is expected in 2026.

7.$Merck(MRK)$ Beta 0.39

$Merck(MRK)$ recorded a 44.77% gain last year, helped by momentum in sales of the company's drugs such as Keytruda, which contributed $15 billion in revenue in the third quarter, and Gardasil, which contributed $5.4 billion in revenue. Keytruda is expected to continue to be a key top-line driver as the drug continues to expand into new indications and early stages.

According to Zacks, MRK is expected to report earnings of $1.55 per share for the current quarter, down 13.9% from a year ago, and earnings of $7.39 per share for the fiscal year, up 22.8%.

MRK posted its best annual gain in more than two decades, making it the best-performing drugmaker in the S&P 500 in 2022 on strong earnings and upbeat clinical trial data, according to Bloomberg data.

"In our view, MRK is a compelling long-term growth story, as it continues to extend franchise cornerstone Keytruda into other and earlier signs", Mizuho analysts said.

Robert M. Davis, chief executive officer of MRK, said the company plans to achieve significant revenue growth of more than $20 billion over the next decade.