The Pharmaceutical sector appears ready for multiple breakthroughs, writes Joe Duarte.
Encouragingly, the signs of new life and the possibility of critical mass being reached by turnaround companies are not just visible in the high-tech industries. For example, in the pharmaceutical sector, the second half of the past decade delivered significant advances in the treatment of cancer. Yet, as I’ve written about multiple times recently, the future potential of the pharmaceuticals industry may be beyond even the most bullish expectations.
For instance, Pfizer (PFE) and Eli Lilly (LLY) are in late clinical trials for Tanezumab, a monoclonal antibody which blocks nerve growth factor, a chemical which is critical in the chronic pain generation pathway. Recent trials have been encouraging and the potential for FDA approval seems to be above average. Of course, there are some potential roadblocks. For one, Tanezumab is not without risk, as there are reports of potentially serious side effects with its use.
But here is where the innovation kicks in, perhaps turning Tanezumab into a blockbuster. If Pfizer and Lilly can make Tanezumab a safer drug, it will change the pharmaceutical landscape as it could significantly reduce the use of opioids over the next decade and beyond. Meanwhile, PFE recently submitted an application for Braftovi, its cancer drug, in combination therapy for colorectal cancer, while receiving a broadening of indications for Xtandi, its treatment resistant prostate cancer drug. In addition, Pfizer has spun off its non-prescription business and has a potential heart failure blockbuster drug in Vyndaqel. Lilly for its own part is making significant advances in the acute and chronic management of migraine headaches along with its recent advances in the treatment of certain types of leukemia and lymphoma while recently upgrading its earnings and revenue guidance for 2020.
In contrast to the first decade of the 21st Century, where scientific advances – smart phones, social media and the commercialization of the Internet - were aimed at selling gadgets and what some may call trivial pursuits, we seem to be in the early stages of a period in which the implementation of truly meaningful scientific applications inside and outside of medicine may actually change the way we live and work at a different level than what we saw in the recent past.
Indeed, from an investing standpoint, it seems we may actually be in the early stages of a new golden age of science. And all things considered, that would not be a bad thing to see in the midst of all the ongoing uncertainty in this world.
I own PFE, LLY, and HPQ as of this writing.
Joe Duarte is author of Trading Options for Dummies, and The Everything Guide to Investing in your 20s & 30s at Amazon. To receive Joe’s exclusive stock, option, and ETF recommendations, in your mailbox every week visit here.
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