This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at firstname.lastname@example.org or call 800-767-3771 ext. 9339.
For Immediate Release
Chicago, IL – December 7, 2011 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include AutoZone Inc. ( AZO - Analyst Report ) , Johnson & Johnson ( JNJ - Analyst Report ) , Bristol-Myers Squibb ( BMY - Analyst Report ) , Gilead Sciences, Inc. ( GILD - Analyst Report ) and Pharmasset, Inc. ( ) .
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Tuesday’s Analyst Blog:
AutoZone Beats, Profits Up 24%
AutoZone Inc. ( AZO - Analyst Report ) recorded a 24% rise in profit to $4.68 per share in the first quarter of its fiscal 2012 ended November 19, 2011 from $3.77 per share in the year-ago quarter, beating the Zacks Consensus Estimate of $4.45 per share. In absolute terms, profit increased 11% to $191.1 million from $172.1 million a year ago.
The increase in profit was driven by a 7.4% rise in net sales to $1.92 billion, which surpassed the Zacks Consensus Estimate of $1.90 billion. Domestic same-store sales (for stores open at least one year), increased 4.6% during the quarter compared with 9.5% a year ago.
Gross margin was 51.1% versus 50.7% in the first quarter of fiscal 2011. The higher gross margin was attributable to lower distribution costs due to an increase in sales, lower shrink expense and modestly higher merchandise margins.
Operating margin increased to 17.7% compared with 17.1% in the prior-year quarter, driven by an improvement in operating expenses (as a percentage of sales) to 33.4% from 33.6% a year ago based on lower incentive compensation, favorable legal expense and leverage from higher sales volumes, which was partially offset by higher self insurance costs.
Spotlight on Hepatitis-C Market
Is the hepatitis-C market the next Mecca for the pharma/biotech sector? It seems so if we go by the flurry of activity and heightened interest in this market in the past few quarters. The hepatitis-C virus (HCV) market seems to have caught the eye of several pharma/biotech companies - as evident by the deals being signed for the development of drugs for the treatment of HCV.
We are talking about the recent announcements made by big players likeJohnson & Johnson ( JNJ - Analyst Report ) ,Bristol-Myers Squibb ( BMY - Analyst Report ) andGilead Sciences, Inc. ( GILD - Analyst Report ) . All three companies have made it clear they want a piece of the HCV market pie.
Johnson & Johnson’s Tibotec Pharmaceuticals and Bristol-Myers Squibb recently announced that they have decided to join forces for the development of Bristol-Myers’ daclatasvir (BMS-790052) in combination with Tibotec’s TMC435, for the treatment of chronic HCV. What the partners are aiming to do is create an oral once-daily interferon-free cocktail treatment for HCV patients.
Bristol-Myers and Johnson & Johnson’s announcement comes on the heels of Gilead’s announcement regarding its intention to buyPharmasset, Inc. ( ) , a company focused on developing HCV treatments. We think the main attraction for Gilead in this $11 billion deal is Pharmasset’s HCV pipeline. Lead candidate PSI-7977 is currently in two phase III studies, with a third phase III study scheduled to commence in the first half of 2012. Successful development could lead to US approval in 2014 thereby making Gilead a front-runner in the oral once-daily interferon-free cocktail treatment HCV market.
We note that both TMC435 and daclatasvir are being evaluated separately in combination with Pharmasset's PSI-7977.
The Allure of the HCV Market
It is estimated that about 170 million people suffer from HCV infection around the world. However, the treated population is much lower. In major markets like the US, EU, Japan, Australia, Turkey, Canada, etc. only 200,000 HCV patients out of a total of more than 12 million are estimated to receive treatment each year. This means a huge number of HCV patients go untreated, leaving the field open for new treatments.
Secondly, the current standard of care comes with several side effects which make it difficult for patients to remain on treatment. A 48-week course of both peg-interferon (peg-INF - weekly injections) and ribavirin (RBV - oral drug), are the standard treatment for genotype1 HCV infection. However, this treatment regimen is associated with significant side-effects like fatigue, flu-like symptoms, rash, depression and anemia.
With a large number of HCV patients failing to achieve a sustained viral response (SVR) on the current standard of care, there are several patients who would be open to treatment with new and potentially more effective therapies.
These factors have made the HCV market an attractive commercial opportunity for pharma and biotech companies. Victrelis and Incivek are examples of the changing treatment regimen in the HCV market. Both are protease inhibitors which when added to the standard of care reduce the treatment period and also improve the treatment outcome. However, both need to be administered with peg-IFN and RBV – this leaves the path open for the introduction of treatments with fewer side effects.
Cocktail Therapy – The Next Big Thing in HCV
Companies like Johnson & Johnson and Gilead are trying to develop the next crop of drugs, which are expected to change the treatment paradigm for HCV patients by providing them with all-oral treatment regimens. The aim is to develop a treatment which does not require the administration of interferon, thereby doing away with a whole range of side effects. The treatment duration will also be shorter.
Treatments being developed include HCV polymerase inhibitors and HCV NS5A inhibitors. The future HCV market will most likely consist of cocktail treatment regimens developed by combining different oral treatments.
Vertex Pharma has also recognized the need to continually evolve the HCV treatment pattern and is developing an all-oral combination of VX-222 (a polymerase inhibitor) and Incivek without peg-IFN.
Who Will Win the Race?
With several companies pursuing cocktail therapies for HCV, it will be interesting to see which of these companies will be the first to hit the market with a new treatment option. Currently, it looks like Gilead might be the front-runner assuming the Pharmasset acquisition goes through.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Please login to Zacks.com or register to post a comment.