Potentially, you're looking at a company that has very little revenue growth for the next few years because of patent expirations,
This is a logical, rational reaction to a complex structure, ... It's a good move because there's been an overhang on the stock because of the open cable issue and contract expirations.
This approval takes some risk out of the equation for them. If they can get the production capacity, it has the potential to be a significant drug. The big issue for Bristol is patent expirations and whether the pipeline can offset them.
We did get surprising oil inventory data, but it's still below that 60 range. The market is running against options expirations, which are causing technical difficulty.
Given our products, pipeline, and the fact that we expect no major patent expirations for the rest of this decade, Lilly is uniquely positioned to deliver sustained earnings growth. For 2006, we anticipate earnings per share of 3.10 to 3.20, which represents 8 to 12 growth compared with expected 2005 adjusted earnings. This growth rate is nearly double the average Wall Street consensus forecast for large-cap pharmaceutical companies.
Earnings growth has been surprisingly low for drug stocks and there is more of that to come as we go through a cycle of patent expirations, ... But I think the stocks are close to being washed out and if you have patience they will do quite well over a longer period of time.
Merck, too, is down on recent news, down in this case from around 85, ... You keep hearing a little bit of concern about their patent expirations over the next two years. Those are very real. But most of analysts say their drug pipeline is pretty solid and their earnings are project to be some 15-to-18 percent for the next couple of years. This is a great investment with which to balance out your high-tech holdings.