In 2019, Dr. Joe Duarte, editor of In the Money Options, selected Texas Instruments (TXN) as his Top Pick; the stock has risen 37%. He now turns to a pharmaceutical favorite as a top pick for 2020.

I’ve liked the action in "Big Pharma" for some time; in my view, pharmaceutical giant Pfizer (PFE) has very positive potential for the new year.

New drugs are finally coming online and hitting revenue and earnings streams and because there are more of them likely to come in what seem to be increasingly encouraging pipelines throughout the sector. Pfizer is a case in point. In 2019 it lost patent exclusivity for its blockbuster nerve pain drug Lyrica and the stock tanked.

But the stock has quietly made a comeback in late 2019 due to its market dominance for blood thinners with Eliquis, its blockbuster cancer drug Inlyta, a broadening set of indications for Xtandi, its prostate cancer treatment, and steady performance for its arthritis drug Xeljans which has recently won extended FDA approval for treatment indications in ulcerative colitis.

Moreover, Pfizer may be sitting on a couple of stealth blockbusters. One is Vyndaquel which treats what used to be considered a rare form of heart failure which may be a more common ailment than previously known and which insurance companies are actually paying for without too much trouble leading to initial sales being well above expectations. 

The other potential blockbuster is in a partnership with Eli Lilly (LLY) has the potential to reduce opioid use significantly in the treatment of low back pain. The drug, Tanezumab, is a monoclonal antibody that blocks a substance called nerve growth factor, which has been found to be a key component in spine pain. 

If this medication is approved, there is no major competition. And if it is effective, it will likely change the whole chronic pain industry. The drawback is related to a statistically significant potential for users to have damage to bones while under treatment.

There is still room for gains in the healthcare sector and I expect that barring a major market event, the stocks that have lagged in 2019 could be upside surprises in 2020. The Big Pharma stocks are starting to gather steam but there is still time to buy them before they take off.

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