$PGNX #1 Progenics (PGNX) stock soared 148% while
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The difference?
Progenics saw its sales jump 3,757% in the third quarter of 2016 compared to the prior year, while Gilead’s sales fell 6% in 2016.
Not to beat up on Gilead, but you can see that same battle for customers and profits at hand when comparing Tenet Healthcare Corp (THC) and Hospital Corporation of America (HCA).
Over the past 12 months, Tenet Healthcare saw its stock collapse 19% while Hospital Corporation of American saw its fortunes rise 30%.
The difference here came down to earnings growth. You see, while HCA’s earnings per share grew 46% in 2016, Tenet Healthcare’s balance sheet poses a threat to its financial future.
The result will send their stock prices south… while those with the fattest profit margins and the greatest sales and earnings growth will continue to dominate their sectors and reward their investors along the way.
That’s why the companies with the greatest market share and the fattest operating and profit margins AND the biggest medical breakthroughs will have an overwhelming advantage over those that don’t, as the President’s new health care reform works to lower consumer costs across the board.
Buy global generic drug companies with dominant market share
Why? Because they already have larger profit margins, since they don’t have any of the research and development costs that the big pharmaceutical companies have.
They simply wait for the drug patents to expire and begin producing generics AND PROFITS. This is how they can make a medication that is identical to a brand-name product, for pennies on the dollar—passing the savings on to the consumer.
Buy pharmaceutical research companies with a huge pipeline of products ready to come to market.
As Trump said repeatedly on the campaign trail, he wants the FDA to approve drugs much faster. It’s no wonder. In 2016, the FDA approved just 22 new medicines—a six-year low, according to The Hill.
“There are over 4,000 drugs awaiting approval,” candidate Trump said in an October 2016 speech, “and we especially want to speed the approval of life-saving medications.” He repeated that promise again on January 31, 2017, telling a group of pharmaceutical industry executives, “We’re forced and focused on accelerating FDA approvals. We’re gonna get the approval process much faster.”
As a result, you are going to see that approval process speed up on developing new drugs for diabetes, cardiovascular disease, obesity, and Alzheimer’s disease—not one of which was approved in 2016.
Buy medical device, medical technology, and diagnostic companies with the fattest profit margins and the greatest pricing power.
Please do so quickly.
In January, Congressman Erik Paulsen (R-MN) introduced a bill that would permanently repeal the 2.3% tax on medical devices under Obamacare. Once passed, this bill would permanently keep the tax from taking effect.
According to Congressman Paulsen, "We are already seeing new American jobs and increased investment in research and development as a result of the temporary suspension of this tax.”
It’s no wonder. The repeal of these taxes eliminates one half of the double hit these companies have taken from Obamacare. Not only were manufacturers subject to a 2.3% tax on sales, but Medicare reimbursements were reduced as well.
Together, these taxes on medical devices, diagnostic imaging, and lab equipment created a disincentive to purchase new medical innovations.
Profit Taker No. 1 $TEVA
When President Trump’s new health care plan becomes law, generic drug companies should outperform the market by a country mile. Now is the time to purchase them, as health insurance and government payers will ultimately push millions of Americans to use them.
For these reasons, Teva Pharmaceutical Industries (TEVA) will be one of the biggest profit takers of all.
It’s no wonder. With a product portfolio of more than 1,800 molecules, the company fills more than 1.5 million prescriptions a day in the U.S.—generating more than $20 billion in sales annually.
In fact, as I write this, the company not only plans to launch 1,500 generics in 2017 but also has over 338 product registrations pending FDA approval. The result will turbo-charge the company’s profits as their new products funnel billions of dollars away from the world’s biggest brands and into their own coffers.
First, the company is on track to generate 300% earnings growth in the first quarter of 2017. Second, they are the world’s largest and most competitive generic drug manufacturer. And third, no matter what the outcome of the new health care law, millions of Americans are still going to need the medicines that TEVA produces.