Q3 2009 Earnings Call Transcript

November 5, 2009 5:00 pm ET

Warner Chilcott (WCRX), Johnson&Johnson (JNJ), Chattem (CHTT), Procter & Gamble (PG)

Tuesday's Wall Street Journal had an article that asked the question "Can Rally Run without Revenue?" Is the revenue situation really that bad?

Let's take a quick look at some the data compiled through the Alert HQ process.

Emergent BioSolutions (EBS) traded sharply higher after releasing earnings Friday morning (see conference call transcript here). The company reported a 68% increase in sales, leading to earnings of $0.48 per share. Investors celebrated by driving the stock price up 16% on volume that was more than three times the normal level. The stock appears to be breaking out of a very attractive pattern and should get the attention of technical traders as they pour through charts over the weekend.

The fundamental strength for the quarter was largely related to an FDA approval which extends the shelf life of the company’s BioThrax vaccine which is used to treat anthrax. As part of a contract with Health and Human Services, EBS was entitled to a large lump sum payment which helped to make the quarter. The longer shelf life gives BioThrax even more of a competitive edge against other possible substitutes for the vaccine.

Q2 2009 Earnings Call

August 6, 2009 5:00 pm ET

One of the favorite screening methods of contrarian investors is to search for companies whose stock prices have underperformed the broader market. In the screen presented below, we highlight stocks that have underperformed year-to-date in 2009 (through July 10th).

In order to minimize the occurrence of companies in financial distress as well as those posting large losses, we limit the screen to companies with no net debt and profitable operations (either based on the trailing twelve months or analyst estimates of the next twelve months). This narrowing of the field should result in a superior list of companies that may have been sold indiscriminately by investors, despite a strong balance sheet and decent operating results.

Below is a summary of updates to the BioMedReports.com database of over 200 entries included in the FDA and Clinical Trial Calendars. The FDA Calendar includes companies with pending new drug, biological agent, or medical device new product decisions at the FDA sorted by their PDUFA decision deadline dates while the Clinical Trial Calendar encompasses pending clinical trial results (with a focus on late-stage, Phase 3 trials), pending new submissions to the FDA (e.g. NDA, BLA, 510k, PMA, sNDA, sBLA filings), and pending re-submissions to the FDA for complete response rulings by the agency which require more information before an approval can be granted.

Q1 2009 Earnings Call

May 7, 2009 5:00 pm ET

Bullish Calls:

ConcoPhillips (COP): "If you want exposure to oil and natural gas you want COP...I wanna buy COP right here."

We expect PharmAthene (PIP) and Emergent Biosolutions (EBS) to sign nearly identical sized $500M+ U.S. government contracts to provide 25 million doses of anthrax vaccine each any day now

This is a game changing contract for PIP as PIP moves it into the league of vaccine producers like EBS.

I closed the last of my 0.2% stake in Emergent BioSolutions (EBS) Tuesday on putrid price action in a very strong market. I am not sure why it is suffering but much like the AeroVironment (AVAV) play, this is a thesis on government spending. So worries about less money per anthrax vaccine could be holding over the stock - I am not sure. I just know there should have been no stocks in the red Tuesday.

Looking at an intraday chart, the stock popped to near $20 and has sold off the rest of the day, down to $18.60. I am going to exit here with a small loss on this last piece - my problem now is I need to start finding some new long candidates that are not ETFs.... it seems very few individual stock can stay consistently good for 4-6 months.

by Andrea Garcia

Scientists at the Scripps Research Institute are developing a new method of vaccination that could potentially be used to provide instantaneous protection whether the target is a cancer cell, flu virus, or a toxin like anthrax in the event of a bioterrorism attack.

Q4 2008 Earnings Call Transcript

March 05, 2009 at 5:00 pm ET

At the end of each trading week, Hillbent scans the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our Market Condition Summary to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

Since the bear market started on October 9th, 2007, the Russell 3,000 has lost $9.58 trillion in market cap, which is more than the index's current market cap of $8.74 trillion.

Of the Russell 3,000's current members:

We've been discussing the past few weeks how this correction has missed "The Generals" (the leadership stocks). While the market went through a horrid January, many of our stocks were unscathed. Which had me worrying - it's hard to get behind a shorter-term bottom until the Generals are taken out back to the barn, blindfolded, given a cigarette, and then shot.

In a bull market, I want to be buying stocks that are holding up during a downturn because there is no pattern that they indeed need to be shot. In a bear market, I take the opposite tack - I assume they are going to be shot. So this is why we have not built up any 3-4-5-6% type of stakes the past month in stocks that had "held up the best". Indeed, I've had one measly position over 2% on the long side. (which is being sand blasted of course).

One of the major reasons behind Pfizer's (PFE) interest in acquiring Wyeth (WYE) is the latter's focus on products outside of traditional pharmaceuticals – with 60% of Wyeth's revenue from last year derived from biological therapeutics and vaccines. It remains to be seen what happens to Wyeth's proposed deal to acquire Dutch vaccine maker Crucell (CRXL); however since it is much smaller (around $1B) and focuses on the development of vaccines, Pfizer would likely be interested in both companies together.

With the focus on preventive medicine likely continue in the form of continued M&A, healthcare reform to emphasize cancer screening tests, and a trend toward personalized medicine; the two tables included below highlight about 100 U.S.-listed companies involved in a variety of preventive medicine businesses. The first includes 67 companies in the ETF Innovators Preventive Medicine Index, which is comprised of the following healthcare business segments:

Bullish Calls:

Walt Disney (DIS): “Under 20 is a buy…put it away….Bob Iger is a terrific manager.”
Con Agra (CAG): “…you better go buy Con Agra. You get that accidental high yield.”
Research in Motion (RIMM): “Buy Research in Motion.”
Allscripts (MDRX): “I’d stay with MDRX which has less hospital exposure and is a more exciting situation (than The Advisory Board).”
Emergent Biosolutions (EBS): “I like it....it’s had a bit of a run…it’s a bit of a Obama play…I’d let it come down before buying.”