Zacks Industry Outlook Highlights: Merck, Pfizer, Forest Laboratories, Sanofi and Eli Lilly PR Newswire CHICAGO, Dec. 4, 2013 CHICAGO, Dec. 4, 2013 /PRNewswire/ --Today, Zacks Equity Research discusses the U.S. Pharma/Biotech, including Merck (NYSE:MRK-Free Report), Pfizer (NYSE:PFE-Free Report), Forest Laboratories (NYSE:FRX-Free Report), Sanofi (NYSE:SNY-Free Report) and Eli Lilly (NYSE:LLY-Free Report). (Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO) Industry: Pharma/Biotech Link: http://www.zacks.com/commentary/30171/pharma--biotech-stock-outlook---dec-2013 With 2013 coming to an end, the worst of the patent cliff faced by the pharmaceutical sector is over. Major blockbuster drugs like Merck's (NYSE:MRK-Free Report) Singulair, Pfizer's (NYSE:PFE-Free Report) Lipitor, Forest Laboratories' (NYSE:FRX-Free Report) Lexapro, Sanofi/Bristol-Myers' (NYSE:SNY-Free Report) Plavix and Eli Lilly's (NYSE:LLY-Free Report) Zyprexa representing combined branded sales worth more than $15 billion in lost patent protection over the last couple of years. However, the effect of the genericization of these products was felt mostly in 2012. While the industry won't be completely free from genericization, the major patent expiries are over and done with. Several companies which had been struggling to post growth in the face of genericization over the past few years should see accelerated growth in 2014. New products should start contributing significantly to results and increased pipeline visibility and appropriate utilization of cash should increase confidence in the sector. Collaborations, Acquisitions and Restructuring The pharma sector witnessed major merger and acquisitions (M&A) activity over the last couple of years. The trend continued this year and going forward, we expect small bolt-on acquisitions to continue. In-licensing activities and collaborations for the development of pipeline candidates have also increased significantly. Several pharma companies are focusing on in-licensing mid-to-late stage pipeline candidates that look promising, instead of developing a product from scratch, which involves a lot of funds and time. Small biotech companies are open to in-licensing activities and collaborations. Most of these companies find it challenging to raise cash, thereby making it difficult for them to survive and continue with the development of promising pipeline candidates. Therefore, it makes sense for them to seek deals with pharma companies that are sitting on huge piles of cash. We recommend biotech stocks that have attractive pipeline candidates or technology that can be used for the development of novel therapeutics. Therapeutic areas which could see a lot of in-licensing activity include oncology, central nervous system disorders, diabetes and immunology/inflammation. The hepatitis C virus (HCV) market is also attracting a lot of attention. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros. 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Zacks Industry Outlook Highlights: Merck, Pfizer, Forest Laboratories, Sanofi and Eli Lilly
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