GlaxoSmithKline plc (ADR) (GSK)

Glaxo Smith Kline is a diversified multinational drug maker with a long and profitable history. They recently acquired a favorite of mine, Sirtris Pharmaceuticals. Sirtris is pursuing research into anti-aging properties of the Sirtuin genes which are activated by Resveratrol, a component found in red wine.

Given the the broad applicability of the Sirtuin activators this represents a very interesting opportunity. Of course GSK is much more than Sirtris. They have a diversified portfolio of drugs and a global base. Another interesting avenue they are pursuing includes a collaboration with Exelixis Pharma on MET inhibitor XL880. GSK has the right to select a second Exelixis compound for further development this fall.

By all accounts GSK is well run and likely to outperform over the coming five years. Buy now while the market is beaten down.

That’s what is expected from the mammoth drugmaker GlaxoSmithKline. The company received FDA approval for its Veramyst nasal spray to relieve seasonal and perennial allergies. The steroid spray, which was originally to be called Allermist, has an edge over older allergy medicines. It has been shown to be effective in relieving itchy eyes as well as reducing nasal symptoms. The drug is approved for use in adults and children of two years of age and older have projected peak sales of up to $1 billion a year.

GSK’s business is at a crucial phase, with two of its biggest sellers, Advair for asthma and diabetes treatment Avandia facing a slowdown in growth, while the company hopes to revive its fortunes by bringing new drugs on stream. GSK pipeline seems to be strong with 158 pharmaceutical and vaccine projects in clinical development, comprising 94 NCEs, 41 PLEs and 23 vaccines. GSK expects to launch Cervarix, its HPV vaccine to protect against cervical cancer, in European and certain International markets in the second half of 2007.

GSK has also launched Tykerb in the USA after receiving FDA approval on 13th March. The company continues to expect approval in Europe during 2007, and has also filed Tykerb with International regulatory authorities. Clinical development of Tykerb continues, as during the quarter the company initiated a pivotal phase III trial in head and neck cancer.

The first quarter was challenging for GSK given U.S. generic competition to its anti-nausea drug Zofran, antidepressant Wellbutrin XL and Flonase for allergies. The company’s bottom-line declined by 1% as sales were hit by the strength of sterling and the loss of patent protection on key medicines. However, significant progress on five key pharmaceutical products, which is expected to be launched in 2007, should help the company to achieve its full year 2007 EPS growth 8%-10% growth. Looking at these aspects it seems that the company should outperform the market in the coming fiscal

Sirtrius a GSK subsidiary has two drugs coming through clinical trials. If they are as effective against type II diabetes as expected you can expect GSK to add billions to it's bottom line over the next 5 years.

Rectum refuse - mgmt sucks!

TJC

Flu season, she is a coming, and with it... H1N1.

Good Company. Good Dividend. They make a lot of staples. What else can ask for right now.

Classic 'crisis' value play. Recent bad news over pipeline drug has driven the price down to artificially low price. Current PE and yield at very low levels compared to historical. Short term value play, divi provides nice cushion while you wait for the re-rating.

Waiting for the buy out of my Sirtris shares (yessss!) and figured I'd follow the money, so to speak. Sirtris will be releasing novel chemical entity data in the next 3 months that should confirm safety and function. WB dimension doesn't hurt either.

Trading near it's 52 week low. I'll go with it.

GSK is the second largest drug company in the world. It is poised to take advantage of the baby boomer generation. Plus it has exposure to international market. The recent negative news in pharmaceutical companies is vastly overstated. Government regulation and drug pipelines, may weigh on this stock over the short-term. However, the long-term case for this pick is very, very strong.

JNJ just reported good results, expect simillar from this mega pharma

Same pitch for all of my healthcare picks...headwinds are keeping the sector down, but expect the healthcare world to outperform as the market smoothes out, particularly those with good dividends.

GlaxoSmithKline, plc is an undervalued major pharmaceutucal company in my opinion. The stock is currently selling near $44.25 per share and has an Intrinsic Value of approximately $74 - $76 per share by my model.

GSK is a BUY at $44.25 with a price objective of $75 in three to five years.

Kahuna,CFA

In a growing market. Looks like improving their position.

Beaten down by a study saying its drug Avandia causes an increase in the risk for heart attack.

buy on a relative low, still good management and fundimentals

the #1 pipeline - great products -

New FDA approved weight loss drug = complete seller