I still like PRX. And I would argue that they compete on more than just price. For example, generics need to get FDA approval also and speed to market can be a huge advantage, like when PRX was first to copy BMY's weight gain drug.
And it seems to me it is just so darn difficult, time-consuming, and outrageously expensive to get a drug to market it is appealing to have someone else do the work!
PRX has over 100 products, a good pipeline, and some process patents that help protect and diversify them. They have healthy margins so if they have to lower prices they can.
Last time I looked, only 4 analysts were following PRX, a good thing IMO. They recently increased their earnings estimates $1.85 for '03, up from $1.84 Did $1.39 in '01 and expect $1.78 in '02.
Consensus EPS growth: 27% vs. industry's 14%
I like the April announcement with Merck:
"Par (PRX division) has licensed from Merck the exclusive rights to 11 generic pharmaceutical products currently under development. Most of these products are expected to enter the U.S. market between 2003 and 2006.
"These 11 new product opportunities further enhance our prospects for sustained growth in the years 2003 and beyond." Terms of the agreement call for Merck to develop the products and submit all corresponding applications to the FDA. Merck will also manufacture the products. Par will serve as exclusive U.S. marketer and distributor of the products plus pay a share of the costs, including development and legal, incurred to obtain final regulatory approval. In return, Par will receive slightly more than 50% of the profits. In 2001, the cumulative sales of the 11 branded products totaled approximately $7.8 billion."
As one analyst said, "PRX is making strategic product and corporate acquisitions so it can transform itself from a me-too generic drug company into a more sustainable and profitable grower.
"Since January 2001, Pharmaceutical Resources has launched several strengths of generic Prozac into a $2 billion market. It also has introduced a product for AIDS patients to help them gain weight. This is a $250 million market. Since the company introduced the product it has garnered 70% of total prescriptions. Unlike most generics, Pharmaceutical Resources has its own patents which can stave off competition for more than the normal 180-day exclusivity period. "
- Kris |
