The upcoming JPMorgan Healthcare Conference will showcase industry updates on drug pipelines, M&A activity, and the impact of recent drug pricing deals, with a focus on managing patent expirations, obesity treatments, and potential new drug developments from major pharma companies like Bristol Myers Squibb, Merck, Novo Nordisk, and Eli Lilly.
Pfizer's dividend, with a high yield of 6.9%, is relatively safe despite a high payout ratio and upcoming patent expirations, supported by strong free cash flow and management's commitment, though some risks remain due to patent losses and earnings pressure.
Pfizer's stock dropped over 5% after missing Wall Street earnings forecasts due to acquisitions and a cautious outlook, amid concerns over patent expirations for key products and hopes for future growth from new drugs and acquisitions like Seagen.
Big pharmaceutical companies like J&J, Merck, and Bristol Myers Squibb are facing a significant revenue threat as patents for their blockbuster drugs expire, allowing competitors to sell cheaper copycats. This could result in tens of billions of dollars in lost sales by 2030. Companies are preparing to offset these losses by building drug pipelines, making acquisitions, and entering partnerships. The looming patent cliffs and potential Medicare drug price negotiations pose challenges, but companies are exploring strategies such as developing new drug formulations and settling lawsuits to delay competition and extend patent protections.