Last recommended in Dividend Digest issue 208 dated January 13, 2010, at 41.56 by Global Investing:
“We do not often trade high-yielding portfolio shares, but information from a potential competitor to GlaxoSmithKline plc (GSK 38.99 NYSE – yield 5.20%) is worrying our biotech maven, who writes about developments that will hurt GSK: ‘It won’t have an immediate affect but Amarin is developing a compelling competitor to the 1 billion market for GSK’s Lovaza (to treat high triglycerides). The new drug, AMR101, has a better effectiveness profile, better safety, and requires less frequent dosing.’ ... Vivian adds: Also worrying about GSK is poor results from a European competitor, Roche, today and a drying out pipeline of new patents. Making enough money to cover the high dividend requires that GSK keep up its prices, under siege in Europe by price-controllers, and in the USA by healthcare reformers. Today, I expect GSK’s share price will rise a bit because of the sale of its stake in Quest Diagnostics (DGX), which will produce some cash. But I do not think there will be enough in the kitty for a game-changing acquisition. Meanwhile its key vaccination business, which distinguishes GSK from pharma rivals, is under renewed fire. The United Nations World Health Organization has called for further investigation into a possible link between a common flu vaccine and narcolepsy, a find by a Finnish study reported yesterday. ... Replace GSK.”
Vivian Lewis, Global Investing, www.global-investing.com, 212-758-9480, 2/2/11