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gjg49

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  • If Gilead Has The Ace, Is AbbVie Holding The Big Joker? [View article]
    "Any antibiotic with major resistant bacterial outbreak would be known to the likes of CDC and FDA. Any competent doctor should be aware and consider an alternate antibiotic."

    Despite your protestations, the doctor who "treated" you was reasonably competent as he/she knew about the potential for resistance. FYI, bacteria mutate all the time and the more exposure they have to any particular antibiotic, the more likely that resistance will emerge. The CDC and FDA will eventually know about drug-resistant strains of the bacteria; after they emerge and potential kill a few (or a lot) people. For example, MRSA is a strain of bacteria that resistant (that is what the "R" in MRSA stands for) and the CDC and FDA know about it but can't do too much about it--and they didn't know about it until it happened. Overuse of antibiotics, especially for the "placebo" effect that you referenced is a threat to public health. None other than Barry Bloom, former head of Pfizer's R+D, probably was the most strident proponent that I ever heard for reserving azithromycin for really serious cases and avoiding overuse.
    Nov 17, 2014. 05:26 PM | Likes Like |Link to Comment
  • If Gilead Has The Ace, Is AbbVie Holding The Big Joker? [View article]
    While you and most of the parties you mention were, as you say, happy, your addition of Pfizer to that list may well NOT be true. Yes, Pfuzer's shareholders were probably happy, but Pfizer's scientists would probably agree with your doctor: antibiotic overuse facilitates and accelerates the development of antibiotic-resistant strains of bacteria. If you, in fact, did not have a bacterial infection, your "placebo" utility might eventually cost someone their life when azithromycin does not work. Have a nice day.
    Nov 15, 2014. 09:28 AM | Likes Like |Link to Comment
  • Upcoming Dividend Hikes May Reveal What Corporate America Really Thinks [View article]
    DVK,
    Thanks
    Oct 23, 2014. 02:32 PM | Likes Like |Link to Comment
  • CVS Health to charge extra for prescriptions from tobacco-selling pharmacies [View news story]
    user1416,
    then what is this all about??
    or are you just some of the random stupidity referenced above??
    Oct 23, 2014. 02:31 PM | Likes Like |Link to Comment
  • Upcoming Dividend Hikes May Reveal What Corporate America Really Thinks [View article]
    DVK,
    Thanks for the clarification.
    My mistake.

    If you happen to measure the portfolio-weighted growth of dividends excluding reinvestment, what kind of growth did you experience in 2014 vs 2013? If you don't measure this or don't care to share that info, that is fine, but if you have it handy I would find it useful. Thanks.
    Oct 20, 2014. 02:50 PM | 1 Like Like |Link to Comment
  • Upcoming Dividend Hikes May Reveal What Corporate America Really Thinks [View article]
    DVK,
    Thank you for your clarification.
    My mistake.
    Oct 20, 2014. 02:37 PM | Likes Like |Link to Comment
  • Upcoming Dividend Hikes May Reveal What Corporate America Really Thinks [View article]
    RDI,
    With all due respect, you confused me.
    In your comment you say that S&P dividends have been hiked 11% so far in 2014, but in the last paragraph of the article you say Bloomberg anticipates 9% dividend growth and then say "if that comes to pass..." If your 11% is correct, then the 9% already came to pass, otherwise you probably are talking about different items that I do not understand. So, What is the aggregate increase in dividends for the S&P year to date for 2014 (that is, if I held a static portfolio from Dec 31, 2013 and compared annualized dividend rates at Oct 17, 2014 to Dec 31, 2013)?

    BTW, I track the aggregate dividend growth (excluding new shares acquired during the year--hence a static portfolio) from my 60+ portfolio of dividend growth stocks and the aggregate growth is just under 6% year to date (this same metric was almost exactly 8% for all of 2013). During the first half of 2014, very very few of the companies I own accelerated their dividend growth and about half decelerated their dividend growth. The companies that increased dividends in the third quarter reversed that trend and generally accelerated growth. With five or six dividend increases still to come, and I estimate the aggregate increase for the year to approximate 6%--at least for my portfolio.
    Oct 18, 2014. 08:11 AM | Likes Like |Link to Comment
  • McDonald's declares $0.85 dividend [View news story]
    The trailing twelve months free cash flow payout ratio was 70%. If cash flows (operating cash flow only declined year over year for the first time in over a year during the June quarter, and even then declined by less than 2% year over year) stay level, the cash flow payout ratio will increase to between 72% and 73%.
    Hope that helps...
    Sep 18, 2014. 05:45 PM | 1 Like Like |Link to Comment
  • How Much Is Novartis's New Heart Failure Medicine Worth? [View article]
    With all due respect, Given your sales estimates, it seems like this drug should generate something like $4 billion in average annual sales over the next ten years. At those levels of production (or price) gross margins should probably be around 75%. With a tax rate of 33%, they would experience 50% profit margins and generate $2 billion per year in cash for each of the next 10 or so years. That should be worth more like $20 billion in market cap today, though the market will discount that for both time and uncertainty of estimates. While This estimate might be too high, if they generate $4 billion in sales, this drug should be worth a lot more than your estimate.
    Sep 11, 2014. 10:59 PM | Likes Like |Link to Comment
  • Omega to raise money with private debt offering [View news story]
    OHI is issuing "senior unsecured notes in an aggregate principal amount to be determined." (Direct copy from the press release.)
    These are bonds (technically "notes"), not stock. The only thing that should have any impact on the stock from this would be the interest rate and possibly the size of the deal (and only if either is extraordinary in some way).
    Sep 4, 2014. 04:32 PM | 2 Likes Like |Link to Comment
  • AbbVie: Growth Story Or Patent Expiration Nightmare? [View article]
    "100X easier -- is that an empirical number? "
    100 x easier does not matter much, but 100x less expensive would--if it were only true.

    Personally, I suspect that Pharmaguy just made up that number. I am not an expert, but from what little I know, biosimilars cost a lot relative to small molecules to do the clinical tests to show that the efficacy and side effects are comparable to the original product. For small molecules, all one has to show is that similar levels of the drug are in the bloodstream over the same timeframes as the original compounds; the compounds themselves are supposed to be exactly the same. Biosimilars are virtually guaranteed to be slightly different as they depend on the cell line that produces the "compound", hence much more elaborate and expensive testing for the biosimilar than the generic. My guess would be that it would cost somewhere in the realm of $25 million to $50 million or so to conduct the clinical trials. This will not prevent competition, just inhibit it. For example, Abbvie currently owns the market and let's say that Novartis is well ahead of Amgen timewise in creating a biosimilar product. So, consider Amgen's position as a potential third place competitor. How much do you want to commit to a biosimilar to Humira when it takes $25 to $50 million to even play in the market?? Novartis' primary strategy would probably be to compete with Humira by cutting price--let's say by 10% from Abbvie. So, what do you (Amgen) do to compete if you know you will be the third competitor on the market, spend $25 to 50 million and cut the price of your version by another 10%?? Profitability scales with volume, and as the third place competitor, you risk probably acheive the smallest volume share (lowest productivity and lowest margins or profitability), the lowest price, and the lowest returns from your incremental $25 to 50 million investment. And you need to consider strategies for what happens if Novartis cuts their price by the second 10% as a pre-emptive move vs Amgen's entry into the market (keep in mind that Novartis would already have some reasonable volume for manufacturing scale and profitability levels by the time you enter the market). And how much does the $50 million investment in this third place biosimilar impact investment spending on Amgen's potentially most profitable products--their new research breakthroughs (whatever they may be)?? Now if the third place player has to go through all this game theory (and I have actually understated the potential scenarios), how many rational or reasonable players will enter the market, especially when it takes $25 to 50 million to play??
    Sep 4, 2014. 04:13 PM | 3 Likes Like |Link to Comment
  • Social Security At 70: Always A Bad Idea [View article]
    CWMF,

    "I didn't see any argument against the numbers presented"

    How carefully did you consider the numbers from Robert Allan Schwartz's original article?

    We know that Robert assumed that his age 62 payments would grow with inflation at a 2.47% rate annually to age 70 (he told us that in his article). What, however, is the inflation rate assumption that would apply to his age 70 payment between age 62 and age 70?? The Social Security Statement that I receive (and Robert probably receives the same template but with his numbers on it) does not indicate what the assumed inflation rate will be into the future--it assumes that each person's earnings will remain similar to the last two year's earnings and that you will receive cost-of-living increases in benefits after they start. I can't find any other comments about inflation (or cost-of-living) on the statement, but the annual payment at age 70 will increase from age 62 to age 70 with the inflation rate that occurs over that time span. I don't know what SS assumes as the inflation rate, but the probability that it is exactly 2.47% is pretty low. If SS assumes a 0% inflation rate over that time, then Robert's annual payment at age should actually be estimated at $50849 per year, or 21.5% higher.

    Robert's table is not necessarily wrong, but how confident are you that it is absolutely correct??
    Sep 1, 2014. 12:11 PM | 1 Like Like |Link to Comment
  • AbbVie: Growth Story Or Patent Expiration Nightmare? [View article]
    Dkohler,
    I can not cute what or where or when (or even if) they said it but I seem to recall seeing that Novartis indicated they are working on a "generic" competitor to Humira. Novartis is one of the largest pharma firms in the world, owns one of the largest "generic" drug companies in the world, and knows how to manufacture biologics, perform actual clinical trials (as opposed to bioavailability tests), and how to muster products thru regulatory agencies worldwide. They also are smart enough to know that after spending a reasonably good chunk of cash to develop a Humira knock-off, they would prefer to have some profit left--that is, they will price the product below Humira, but not by a lot. They are also smart enough that they also find Humira appealing because probably very few, if any other, competitors will emerge and pricing likely will remain relatively firm, so profits for the second entrant (after ABBVIE) may remain attractive for a long time. Duopolies are almost as good as monopolies.
    Aug 29, 2014. 03:09 PM | 2 Likes Like |Link to Comment
  • A 7.7% Current Yield For Your Retirement Portfolio [View article]
    A quick look revealed that RAS does not generate positive funds from operations (data via Schwab, so I won't absolutely vouch for it) and they are no where near running free cash flow.
    My guess (and if it costs nothing to you that may well be all it is worth) would be that this would be rated far below investment grade. Personally, I will pass on this one.
    Aug 29, 2014. 02:54 PM | Likes Like |Link to Comment
  • AbbVie: Growth Story Or Patent Expiration Nightmare? [View article]
    Humira is a biologic product (produced by a living organism with complex chemical structures) not a small molecule. Potential generic competitors will need to spend considerably more time and invest considerably more money to enter this market than for most small molecule products. As such, few will attempt to compete and prices will remain much firmer--they will decline albeit much less than for a small molecules like Lipitor or Viagra.

    The FDA has talked about changing the rules on generic forms of biologics, but I have not heard where they are in that process. In any case, so-called "generic" versions will very likely be slightly different because they will need to use different cell lines to produce the protein product. Patients may react differently to the "generic" as it will be a slightly different substance. Physicians may be much less inclined to allow substitution.

    I am long Abbvie though I recently reduced my position as the deal with Shire will trigger taxable gains, so I donated some of the stock.
    The uncertainty with regard to Humira is both moving closer in time and increasing; meanwhile, the 3% and until recently declining yield (as the stock moved up) seems less appealing as the big unanswered question on Humira approaches.
    Aug 28, 2014. 02:24 PM | 3 Likes Like |Link to Comment
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