Health and Healthcare

Biotech and Pharmaceutical Giants Go All In With Big Data Analytics

Lee Jackson

Published: June 1, 2018 10:30 am

Last Updated: January 11, 2020 10:54 pm

It’s no surprise that it was only a matter of time before the usage and storage of big data and analytics would come to the health care sector, and many of the top companies are starting to apply these valuable tools across key areas of the industry. Why, one may ask? The reason is simple: Proper implementation of these critical tools could help improve the probability of success in a $350 billion industry, which could increase process efficiency and drive what some on Wall Street feel could be billions in savings.

A new Jefferies research report from makes the case that the emergence of big data, data analytics and technologies could revolutionize the industry by driving drugs with superior efficacy, better savings and again hopefully lowering costs. The report noted this:

There is a concerted effort to use big data & analytics to help drive more efficient decision-making for drug discovery, clinical trial development, safety monitoring, sales and marketing, & more. These efforts have taken shape in the form of a noticeable increase in the number of external collaborations and internal initiatives.

With the cost to bring a single drug to market a stunning $2 billion and growing, meaningful cost savings would be huge for big biotech and pharmaceutical companies. The Jefferies report listed nine top companies that are actively using big data and analytics.

Amgen

This biotech giant remains a top stock for investors to buy and a safe way to play the massive potential growth in biosimilars. Amgen Inc. (NASDAQ: AMGN) has been a biotechnology pioneer since 1980 and has grown to be one of the world’s leading independent biotech companies. It has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.

Amgen develops, manufactures and markets biologic therapies for oncology and inflammation. The company’s five key marketed products are among the top-selling pharmaceutical products in the world, with expected collective revenues of more than $22 billion in 2018.

Shareholders are paid a 3.94%% dividend. The Wall Street consensus price target for the shares is $195.35. The stock traded early Friday at $183.80.

Biogen

This large cap biotech will partner with Samsung Bioepis in the biosimilar world. Biogen Inc. (NASDAQ: BIIB) discovers, develops and delivers to patients worldwide innovative therapies for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders. Founded in 1978, Biogen is one of the world’s oldest independent biotech companies, and patients worldwide benefit from its leading multiple sclerosis (MS) and innovative hemophilia therapies.

The company markets three products, Avonex, Tysabri and Tecfidera, that combined have the leading share of the worldwide $18 billion MS market. Merrill Lynch feels the company will be a big winner with the lower corporate tax rate as it has extensive operations in the United States.

The consensus price target is $350.04, and the shares were trading Friday morning at $296.60.

Celgene

This company is a top large cap biotech pick and has big upside potential. Celgene Corp. (NASDAQ: CELG) is a very profitable biopharmaceutical company that develops and markets therapies for the treatment of hematologic malignancies, solid tumors and inflammatory conditions. The company’s key growth driver and contributor to the top line is Revlimid for the treatment of multiple myeloma and myelodysplastic syndromes.

Its blockbuster blood cancer drug Revlimid continues to dominate. Pomalyst sales also continue to be solid, and cancer drug Abraxane is growing at a respectable rate. So the company continues to have a strong lineup of top-selling drugs.

The posted consensus price objective is $113.38. The stock recently traded at $78.75 a share.

Gilead Sciences

This stock is trading a very reasonable 10.6 times estimated 2018 earnings. Gilead Sciences Inc. (NASDAQ: GILD) is a biopharmaceutical company that discovers, develops and commercializes therapies for the treatment of HIV/AIDS, liver disease, cancer and inflammation. The recent acquisition of KITE allows for entry into the CAR-T space, indicating a renewed focus in oncology.

The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults; and Harvoni, Sovaldi, Viread and Hepsera products for the treatment of liver disease.

The analysts’ consensus price target is $85.81, and the stock was trading Friday at $67.80.

Johnson & Johnson

With a diverse product base and a very popular and solid brand, this is among the most conservative big pharmaceutical plays. Johnson & Johnson (NYSE: JNJ) is one the top stocks in the health care sector and will raise the dividend for shareholders this year for the 55th consecutive year. With everything from medical devices to over-the-counter health items and prescription drugs, it remains one of the most diversified health care names on Wall Street.

The health care giant also has one of the most exciting pipelines of new drugs in the sector. That combined with the solid over-the-counter product business makes the stock an outstanding holding for conservative accounts with a long-term investment horizon. The company generates a little over half of its sales in international markets, which are expected to see higher spending on health care over the next 10 years and beyond.

Shareholders are paid a solid 3.01% dividend. The consensus price objective was last seen at $145.10. The shares traded at $120.15.

Eli Lilly

This is another stock with solid upside potential. Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.

The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.

Shareholders are paid a 2.65% dividend. The consensus target is $90.89, and the shares were changing hands at $85.45 apiece.

Merck

This top remains a leading health care stock for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.

The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.

Merck shareholders receive an outstanding 3.23% dividend. The consensus price target is set at $69.06. The stock was last seen trading at $60.55 a share.

Novartis

This is among the world’s largest pharmaceutical drug makers by sales and remains a top international pick across Wall Street. Novartis A.G. (NYSE: NVS) develops, manufactures and markets a range of health care products worldwide. It operates through three segments.

The Pharmaceuticals segment offers patented prescription medicines for oncology, neuroscience, retina, immunology and dermatology, respiratory, cardio-metabolic, established medicines and cell and gene therapies. Key products include Diovan (hypertension), Gleevec (CML and GIST), Tasigna (CML) and Gilenya (MS). The Alcon segment provides eye care products, while the Sandoz segment offers generic prescription medicines.

Novartis shareholders are paid a 3.34% dividend. The $88.16 consensus price objective compares with the recent share price of $75.20.

Regeneron Pharmaceuticals

This is a top biotech play for aggressive accounts to consider. Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is a biopharmaceutical company focused on the development of therapeutic human antibodies for the treatment of eye disorders, hypercholesterolemia, cancer, inflammation and other diseases.

Regeneron’s product sales are driven principally by its VEGF inhibitor Eylea, which is approved for use in wet age-related macular degeneration and diabetic macular edema, and by Praluent for the treatment of hypercholesterolemia.

This is another company with extensive operations in the United States and a current high tax rate. The lower corporate rate could be huge for the bottom line.

The posted consensus target price is $376.45. The shares were changing hands Friday at $305.10.

These nine companies have the kind of size and deep-pocket cash to push big data analytics and all that can be gained by putting the tools to work. In an era in which the cost of drugs will continue to be a thorny issue that politicians spring to during election time, and the fact that costs to come to market are staggering, these new tools should help the big industry leaders immensely.