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TMFHelical (98.70)

Pyrrhic Victory?

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January 03, 2008 – Comments (1)

Last year I participated in a series of articles for TMF entitled 'The Best Drug Stock for 2007'.  I selected GSK for my article, encouraged largely by their aggressive partnering strategy for pipeline bolstering and shareholder friendly dividend / buyback policies.

http://www.fool.com/investing/general/2007/01/19/the-best-drug-stock-for-2007.aspx

http://www.fool.com/investing/dividends-income/2007/01/19/the-best-drug-stock-for-2007-glaxosmithkline.aspx

2007 was not great for  GSK. Concerns surrounding diabetes medication Avandia, delay in approval of HPV vaccine Cervarix, and a disappointing compliance study for controlled release Coreg all weighed heavily.

http://www.fool.com/investing/general/2007/10/25/rope-a-dope-at-gsk.aspx

I owned GSK at the time of the article, but don't now (my wife does - I sold in September).  I still like GSK quite a bit and expect to own it again, but am hesitant to hold big pharma going into the election year and continue to be troubled for the industry by the approval shy FDA.  So I will sit on the sidelines I expect through much of 2008, though I don't know that I could resist a price in the low 40's.  GSK is well positioned for the future IMO, but that future isn't now. 

I do own JNJ, so I'm not totally out of pharma honestly.

As for the Best Drug Stock for 2007. Well, I'm not sure what the best one was, probably Merck amongst big pharma, but of the companies written up, the answer would be none.  Counting dividends returns for those selections were as follows (from 1/19 through 12/31/2007):

Monenta (MNTA)   -60%

Forest Laboratories (FRX)   -34%

Genentech (DNA)   -25% (and the readers choice)

Pfizer (PFE)   -12%

Endo Pharm Holdings (ENDP)   -11%

GlaxoSmithKlein (GSK)   -5%

So I guess I won in the end, but I still lost really.  Not honestly a consolation - sorry.  I'm keeping the pick active in CAPS, but expect it will probably be 2009 for this to be back on the Helical buy list. 

Zz 

 

1 Comments – Post Your Own

#1) On January 03, 2008 at 1:05 AM, TMFHelical (98.70) wrote:

Should have imbedded the links.  Whoops.

Zz 

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