So Pfizer is increasing their portfolio with King Pharmaceuticals, a maker of veterinary meds and pain therapies. In addition to this news, another company came into the spotlight for pain management therapies. This company is Pain Therapeutics (PTIE). Pain Therapeutics is in clinical trials now in collaboration with King Pharmaceuticals so look for Pfizer to kick in some clinical trial expertise with Pain Therapeutics (NASDAQ:PTIE). Additional companies involved in pain therapies is Endo Pharmaceuticals. I highly suggest buying Endo as a buy right now. Since June 2010 Endo's stock has risen form 20.22 to its current trading at 34.99. I suggest a limit order to buy at some discount. Another Pain therapies stock is Watson Pharmaceuticals, a generic drug maker.
My opinion on this is that Pain Therapeutics could be slightly overvalued on the hyped news, and although it may seem attractive to buy right now, I suggest waiting for the pullback as it will be years before these clinical trials are actually approved by the FDA. Also, I am a little cautious placing a buy on Pfizer right now as they will be losing patents on Lipitor next year and other brand name drugs will become available as generics. I might actually place Pfizer's stock right now on hold or sell, as earnings could be lower than expected. Just because everyone is doing it does not make it a buy in my opinion. I actually do not necessarily see King Pharmaceuticals as such a hot buy with only 4.85% profit margin and 18M in profits on 380M in revenue. But given that layoff will presume who knows.
Stick to your guns and remain a cautious investor and good things will come. I apply Warren Buffett's principles to the BioPharma Stock World and like purchasing stocks at a discount. You should be searching for the next Pfizer and not chasing after something that is overly hyped. Just my opinion.
Stocks mentioned in this article
The Street: Biotech
NEW YORK (TheStreet) -- Pain relief became the theme of Tuesday's trading session in biotech land, after Pfizer's(PFE) $3.6 billion deal to acquire King Pharmaceuticals(KG), a pain-reliever specialist, came to light before the opening bell.
The news drove King's stock to the cusp of Pfizer's offer price -- the equivalent of $14.25 a share, a 40% premium to the Monday close. In morning trading Tuesday, shares of the Bristol, Tenn.-based King, which also does a robust business in veterinary medicine, were trading at $14.15, up 39.5%, or $4.01, on enormous volume.
The deal also helped the shares of an early-stage painkiller developer with a rather literal name: Pain Therapeutics(PTIE), which has teamed with King on the development of Pain's lead drug candidate, called Remoxy, currently in clinical trials.
The two companies also have a licensing agreement for Remoxy, a "strong painkiller," Pain says in its press materials, the main selling point of which appears to be that it has a "unique formulation designed to reduce potential risks of unintended use." In other words, the Remoxy recipe, delivered as a capsule, makes it hard for users to binge on the drug and get addicted to its painkiller qualities.
Investors and traders were apparently excited by the notion of a global Pfizer sales and marketing force pushing Remoxy into the dreamed-for blockbuster realm. King was slated to submit a new drug application for Remoxy with the Food and Drug Administration sometime during the fourth quarter.
Pain shares were jumping nearly 20% to $7.43 in brisk trading.
For the most part Tuesday, biotech stocks were, however, in the red, following the broader market lower. The Nasdaq Biotechnology Index was down 1.78 points to 906.61.
In morning action Tuesday, Alexza shares were moving at $1.30, down 8 cents, or nearly 6%, on heavier-than-average volume. Investors wiped out half the company's market value during the previous session.
Elsewhere in the world of experimental tinctures, Geron (GERN) stock continued to climb in the wake of the stem-cell drug developer's historic launch of human clinical trials Monday.
The stock was changing hands at $6.06 in recent trades, up 7% from the close in the previous session, when they added 6.4%. Volume in Geron shares Tuesday morning was heavy again, surpassing 2 million before 11 a.m. EDT, double the daily average.-- Written by Scott Eden in New York
The deal values King at $14.25 a share, or a 40% premium over King's closing price of $10.15 a share Monday. Pfizer said the acquisition will have no material impact on 2010 earnings but will add approximately 2 cents a share to the drugmaker's estimated 2011 and 2012 earnings.
King is a specialty pharmaceutical company that specializes in pain drugs, including Embeda, an opioid designed with features that make it resistant to abuse and misuse. King earned $1.10 a share in 2009 on total revenue of $1.78 billion but is expected to earn 68 cents a share on $1.48 billion this year, according to Thomson Reuters.
Pfizer said the King acquisition allows the company to expand its current pain offerings, which include Lyrica and Celebrex.
Pfizer shares were down 5 cents to $17.33 in premarket trading Tuesday. They
have since gained in value to 17.48.
--Written by Adam Feuerstein in Boston.
- Pfizer Buys King Pharmaceuticals For $3.6 Billion (huffingtonpost.com)
- Pfizer's $3.6 Billion Deal for King Boosts Pain Focus (businessweek.com)
- Pfizer buying King Pharmaceuticals for $3.6B (bizjournals.com)
- Pfizer embraces pain pipeline in $3.6B King buyout (fiercebiotech.com)
Disclosure: Long Endo, Wason, Pfizer, Pain Therapeutics