Pharmaceutical Stock Forecast 2012: Major Patent Expirations and M&A

Fitch Ratings forecasted a gloomy 2012 for the pharmaceutical industry (NYSE:XLV) today. The ratings company said that drug companies will be hurt by expiring patents, government price control measures, lower demand due to unemployment and a lack of consumer confidence.

MarketWatch cited Fitch Director Britta Holt, who said that although pharmaceutical companies may benefit from several new blockbuster drugs hitting the market, it won’t be enough to offset the revenue declines in the industry. In the next two years, major patents will expire which will affect Eli Lilly & Co (NYSE:LLY), Bristol-Myers Squibb Co (NYSE:BMY), and Pfizer Inc. (NYSE:PFE) the most. Fitch predicts that five of the largest 13 drug companies will see revenue losses in 2012.

Moody’s Investors Services agree with Fitch’s predictions that we could see acquisitions and buybacks in order to help keep stock values high in a touch market. Despite the hurdles, Fitch still said that the pharmaceutical sector would remain one of the firm’s highest rated industries in 2012.

Here’s how top pharma stocks are trading now:

Eli Lilly & Co. (NYSE:LLY): LLY shares recently traded at $40.72, up $0.68, or 1.7%. They have traded in a 52-week range of $33.46 to $40.48. Volume today was 1,343,711 shares versus a 3-month average volume of 8,611,960 shares. The company’s trailing P/E is 9.74, while trailing earnings are $4.18 per share. Get the most recent company news and stock data here >>

Bristol-Myers Squibb Company (NYSE:BMY): BMY shares recently traded at $34.07, up $0.33, or 0.98%. They have traded in a 52-week range of $24.97 to $33.85. Volume today was 1,505,268 shares versus a 3-month average volume of 13,279,800 shares. The company’s trailing P/E is 17.57, while trailing earnings are $1.94 per share. Get the most recent company news and stock data here >>

Pfizer Inc. (NYSE:PFE): PFE shares recently traded at $21.24, up $0.38, or 1.82%. They have traded in a 52-week range of $16.63 to $21.45. Volume today was 11,375,930 shares versus a 3-month average volume of 47,516,200 shares. The company’s trailing P/E is 14.75, while trailing earnings are $1.44 per share. Get the most recent company news and stock data here >>

Merck & Co. Inc. (NYSE:MRK): MRK shares recently traded at $36.06, up $0.5, or 1.41%. They have traded in a 52-week range of $29.47 to $37.65. Volume today was 7,909,909 shares versus a 3-month average volume of 17,460,600 shares. The company’s trailing P/E is 26.36, while trailing earnings are $1.37 per share. Get the most recent company news and stock data here >>

Johnson & Johnson (NYSE:JNJ): JNJ shares recently traded at $63.84, up $0.66, or 1.04%. They have traded in a 52-week range of $57.50 to $68.05. Volume today was 1,729,104 shares versus a 3-month average volume of 11,671,300 shares. The company’s trailing P/E is 15.57, while trailing earnings are $4.10 per share. Get the most recent company news and stock data here >>

Abbott Laboratories (NYSE:ABT): ABT shares recently traded at $54.80, up $0.57, or 1.05%. They have traded in a 52-week range of $45.07 to $55.61. Volume today was 1,772,657 shares versus a 3-month average volume of 8,751,030 shares. The company’s trailing P/E is 18.90, while trailing earnings are $2.90 per share. Get the most recent company news and stock data here >>

Novartis AG (NYSE:NVS): NVS shares recently traded at $55.60, up $1.63, or 3.02%. They have traded in a 52-week range of $51.60 to $64.82. Volume today was 948,080 shares versus a 3-month average volume of 2,395,150 shares. The company’s trailing P/E is 13.10, while trailing earnings are $4.25 per share. Get the most recent company news and stock data here >>

GlaxoSmithKline plc (NYSE:GSK): GSK shares recently traded at $45.00, up $0.52, or 1.17%. They have traded in a 52-week range of $32.15 to $43.94. Volume today was 508,555 shares versus a 3-month average volume of 2,508,210 shares. The company’s trailing P/E is 44.82, while trailing earnings are $1.00 per share. Get the most recent company news and stock data here >>

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