Patent Precipice at Pfizer

Through successful litigation, Pfizer (PFE-$28.16) has extended the patent for its sex drug Viagra (sildenafil) in the U.S. until October 2019. However, up to twenty generic manufacturers, including powerhouse Teva (TVA), are poised to market their own versions of the little blue pill in Europe and other global markets after international patents expired in June.

Worldwide sales totaled $945 million in 1H:2013 (4% of product sales), with half of this revenue coming from abroad.

Concerns have been expressed, too, by analysts that the drug could lose incremental sales here at home to a generic version of Pfizer’s proprietary treatment for pulmonary arterial hypertension, Revatio, which contains sildenafil as the active ingredient and lost marketing exclusivity in November 2012.

Albeit Pfizer is looking to mitigate the impact of generic competition by bringing to market new products, including treatments for auto-immune disorders, cardiology, and oncology, as demonstrated by Viagra, its portfolio of drugs at-risk of losing market exclusivity is high. Up to 35% of the $23.6 billion in sales derived from branded pharmaceuticals in 1H:13 is either currently battling an onslaught of cheaper alternatives or will soon face generic competition, including several best-selling drugs.

Read more at YCharts: Dark Patent Issues Behind Pfizer's Cash Machine

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Onyx and Amgen Marriage -- Not So Fast

The key asset driving the upside valuation for Onyx (ONXX-$126.26) is Kyprolis (carfilzomib), a proteasome inhibitor recently approved for the treatment of patients with relapsed and refractory multiple myeloma (whose disease has progressed (got worse) on their last therapy or within 60 days of their last therapy). Analysts opine that this disrupter of cancer cell growth could generate peak annual sales of up to $2.1 billion by 2020.

Nonetheless, there are risk considerations that could thwart the assigned value attached to Kyprolis, including a failure to gain label expansion (earlier usage). Whether Kyprolis can take share from Celgene (CELG), whose $4.3 billion immunomodulatory drug Revlimid (lenalidomide) is used in all stages of multiple myeloma (MM), will depend on clinically significant improvements in comparative overall survival outcome studies....

Given competitive risks, future regulatory uncertainties, and a price-to-sales multiple almost twice the industry average of 11.2 times sales, Onyx management’s price could prove too rich a multiple even for the hungriest of dug manufacturers.

Read more at YCharts: $10 Billion Onyx Joke MayBe On Amgen Holders

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Obstacles to Growth at Sanofi

Current fundamentals at Sanofi (SNY-$51.81) look dismal. Total revenue declined 2.8% to $9.36 billion (EURO 8.06 billion). Although quarterly sales missed consensus estimate of EURO 8.3 billion, double-digit gains from its rare-diseases division Genzyme (purchased for $20.1 billion in 2011), diabetes segment (driven by insulin Lantus), and emerging markets (like China in the Far East and Brazil in South America) saved the company from an even bigger hit to sales.

Additionally, blockbuster status (defined as annual peak sales of at least $1.0 billion) of recently approved medicines - like the colorectal cancer drug Zaltrap and multiple sclerosis therapy Aubagio - is far from certainty.

Read more at YCharts: Ugly Truth About Sanofi Stock

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.