Key Takeaways From The J.P. Morgan Healthcare Conference

2017 was an eventful year for pharma and biotech stocks. Although the industry faced challenges like drug pricing scrutiny, pricing pressure, increasing competition, concerns regarding Amazon's interest in entering the healthcare arena, fewer-than-expected acquisition deals and major pipeline setbacks, there were some positive developments as well. There was a significant surge in FDA approvals, investors appeared more comfortable with the drug pricing controversy and innovation won the day with the FDA granting approval to gene therapies for cancer as well as a rare form of blindness. Tax reforms are also expected to work in the sector's favor with mergers and acquisitions (M&As) expected to pick up in the coming quarters.

Keeping this in mind, here is a look at key takeaways from presentations made by four major pharma and biotech stocks at the annual J.P. Morgan healthcare conference, the largest and most informative healthcare investment symposium in the industry.

Pfizer, Inc. PFE: Pharmaceutical giant, Pfizer, expects 2018 to be a rich data delivery year. The company's focus is on five therapeutic areas including oncology, inflammation & immunology, vaccines and rare disease & internal medicines. Within the immuno-oncology portfolio, focus remains mainly on drug combinations of Bavencio with a variety of Pfizer-targeted agents.

During the first half of the year, the company should present late-stage data on Bavencio (second-line non-small cell lung cancer) and Vyndaqel (cardiomyopathy) while regulatory submissions are expected for Xtandi (non-metastatic castration-resistant prostate cancer) and PARP inhibitor, talazoparib (breast cancer). The second half of the year will see the company presenting phase III data on rivipansel (sickle cell) and tanezumab (pain). The company also has a couple of PDUFA dates in 2018 – Xeljanz for ulcerative colitis (its first indication outside rheumatology) and lorlatinib (second-line non-small cell lung cancer).

Pfizer is a Zacks Rank #3 (Hold) stock. The company's shares are up 11.1% over the last one year compared to the 18.4% gain recorded by the industry it belongs to.

Celgene Corporation CELG: Biotech company, Celgene, announced its preliminary results as well as 2018 outlook at the healthcare conference. Celgene will also be presenting a significant amount of data this year including on Revlimid + Rituxan (relapsed and/or refractory follicular lymphoma) and Otezla for scalp psoriasis. Several study initiations are also expected this year. Moreover, the company expects to submit a supplemental New Drug Application (sNDA) to the FDA for Revlimid in combination with bortezomib and dexamethasone (RVd) in patients with newly diagnosed multiple myeloma ("NDMM"), a New Drug Application ("NDA") for fedratinib in myelofibrosis and an sNDA for Otezla in Behçet's disease. Meanwhile, FDA decisions are expected this year for ozanimod (relapsing multiple sclerosis - RMS) and a once-daily formulation of Otezla. The company said it will continue to invest in business development.

Celgene is a Zacks Rank #3 stock – the company's shares are down 10.1% over the last one year compared to the 0.9% gain recorded by the industry it belongs to.

Bristol-Myers Squibb Company BMY: Bristol-Myers's pipeline represents several opportunities for long-term growth. The company provided an update on its blockbuster drug, Opdivo, which is expected to drive near- and mid-term growth. Non-small cell lung cancer, renal cell carcinoma ("RCC"), hepatocellular carcinoma and gastric cancer are some areas that represent commercial potential in excess of $1 billion each. These are disease areas with high prevalence, high unmet medical need and low survival rates. Bristol-Myers has several data-readouts on Opdivo planned for 2018 and 2019. The company's immuno-oncology portfolio has several early-stage candidates and late-stage assets like relatlimab (anti-LAG3) and BMS-986205 (BMS-IDO). The company said that business development remains an important priority with the focus being on deals that make sense from a financial perspective and where the assets and technologies are strategically aligned to its priorities and are potentially transformational.  

Bristol-Myers is a Zacks Rank #3 (Hold) stock. The company's shares are up 9.1% over the last one year.

Merck MRK: For Merck too, business development remains a key priority. The company said that it is looking at opportunities through licensing deals and bolt-on acquisitions to add drugs/technology that address unmet medical needs. While Merck will provide its 2018 outlook in February, the company said that headwinds remain in the form of competitive pressure for drugs like Zostavax and Zepatier while Zetia and Vytorin will still feel the impact of generic competition. However, Keytruda represents significant growth opportunity with the drug being in several studies for label expansion and combination use. Moreover, the company's pipeline of oncology assets, novel vaccines, select hospital and specialty products also provide scope for long-term growth.

Merck is also a Zacks Rank #3 stock - you can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The company's shares are down 7% over the last one year.

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