Allergan's Future Looks Promising
New products may trump threat from generics.
Michael Waterhouse
Michael Waterhouse is a healthcare strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers specialty pharmaceutical and life science and diagnostic companies.
Before joining Morningstar in 2010, Waterhouse was a research biologist for the Centers for Disease Control and Prevention. He was also a volunteer in the Peace Corps.
Waterhouse holds a bachelor’s degree in biology from the University of Georgia. He also holds a master’s degree in business administration from the University of Minnesota, where he participated in the Carlson Funds Enterprise, a student managed investment fund.
Latest
A Fast-Growing Slice of the Healthcare Sector for Your Radar
Life science and diagnostics firms offer attractive growth and moats, but be wary of valuations.
Judge OKs Fresenius Backing Out of Akorn Acquisition
As a result of the ruling, we’re raising our fair value on Fresenius and lowering our fair value on Akorn.
Valeant's Not Out of the Woods Yet
Although first-quarter results showed positive signs, debt remains a significant concern.
Botox Makes Allergan Worth a Shot
Clinical trial requirements and the lack of interchangeability mean that Botox remains a wide-moat franchise.
Allergan's 1st Quarter In Line With Expectations
The wide-moat firm hasn't yet faced competition for Restatsis, so we think our fair value estimate stays mostly intact.
Concerns About Allergan's Health Are Overblown
The stock price implies the worst-case scenario for this wide-moat company.
Allergan Still Undervalued After Updated Outlook
Concerns about generic Restasis and longer-term Botox competition are manageable challenges for this wide-moat company.
Teva Shakeup Only the Beginning
The drugmaker must still contend with extensive competition in the generic drug industry and high financial leverage.
An Undervalued, Wide-Moat Name in Healthcare
We think generic competition on Restasis is manageable and that Allergan has an innovative pipeline and strong aesthetics business.
Mylan's Win is Teva's Loss
We're increasing our fair value estimate on the former and decreasing our fair value on the latter, due to Mylan's approval of it generic version of Teva's Copaxone.
Teva's CEO News Is Encouraging
Kare Schultz's familiarity in branded drug markets lead the firm to take on more product development risk longer-term, with purchases of earlier-stage products and more dramatic asset sales.
FDA Further Complicates Endo's Outlook
Removing Opana from the market adds another headwind to this high-risk firm's competitive pressure in its branded and generics segments, high financial leverage concerns, and ongoing mesh litigation.
Continued Progress at Cooper
We're increasing our fair value estimate on the narrow-moat company to reflect higher margin assumptions.
Diminished Confidence on Perrigo
Increasing competition in the U.S. generics business and past poor capital-allocation decisions diminish our confidence in future economic profits.
Our Top Picks in the Generic Drug Industry
The generic drug industry faces several challenges, but long-term, patient investors could consider no-moat Teva and Mylan.
Market Overly Negative on Teva
The market is too harshly penalizing the company for the large challenges it faces in both its generics and branded segments over the coming years.
Valeant: Business Shows Some Stability, But ...
We continue to have modest expectations for new products and the pipeline.
Generic Drug Industry Headwinds Lead to Moat Downgrades
Fear could create opportunity, but we advise investors to proceed with caution.
Akorn Takeover Talk Unsurprising
The company is a likely takeover target, thanks to its focus on more complex generic drug products.
Is Momenta's Drubbing Overdone?
The FDA's warning letter issued on a key generic Copaxone 40mg manufacturing facility owned by Pfizer does not affect our long-term view of this no-moat drugmaker.
Teva Faces Uncertainty
Although we think the narrow-moat drugmaker looks undervalued, the company continues to face significant challenges as it transitions to a new CEO and from the potential upcoming competition on Copaxone.
Illumina Should Dominate in High-Throughput Sequencing
The narrow moat company's results and announcements give us confidence in its ability to drive innovation in the genome sequencing market and maintain its competitive advantage.
Teva's Weak Forecast Leads to Fair Value Estimate Cut
Management's new projections show greater weakness beyond our original expectations, stemming almost entirely from the generics segment.
Teva's Generics CEO Departure Cause for Concern
Pricing pressure in the generic drug market and anticipated generic competition on the one of the narrow-moat company's main drugs in 2017 makes the abrupt leadership change a concerning development at a critical time for the company.
Allergan Is Our Top Pick in Specialty Pharma
The underpriced wide-moat drugmaker boasts an attractive product portfolio, healthy pipeline, and clean balance sheet.
Allergan Still Undervalued
The wide-moat company looks well positioned for long-term growth.
Allergan Still Undervalued as Likelihood of Pfizer Deal Fades
New rules from the U.S. Treasury may put a damper on the Pfizer merger, but Allergan remains an attractively priced wide-moat company nonetheless.
Undervalued Opportunities in Specialty Pharma
Though low earnings multiples are justified for many companies in this beleaguered industry, a handful of players look relatively safe and undervalued at current levels, says Morningstar's Michael Waterhouse.
Akorn On Track
The stock looks undervalued as accounting issues temporarily detract from an attractive business.
Valeant's Disappointing Outlook Raises Default Fears
We're lowering our fair value estimate for Valeant and expect near-term volatility to remain extremely high for this undervalued firm.
Allergan Looks Cheap as Pfizer Deal Approaches
The wide-moat firm also is undervalued on a stand-alone basis.
Pfizer Looks Undervalued
We think the market is underestimating the pharma giant’s long-term earnings potential.
Lowering Valeant's Fair Value Estimate
Shares of the embattled firm will still look undervalued, but investors need to remain very cautious.
Baxter's Headwinds Mostly Temporary
The company faces near-term challenges after the split, but we still like its moat.
Actavis' Wide-Moat Transformation Offers Shareholder Rewards
Product durability, diversification, and cost synergies support strong earnings growth for this undervalued wide-moat firm.
A Wide-Moat Opportunity in Health Care
Actavis' transformation to a wide-moat company following its deal with Allergan represents a good buying opportunity for long-term investors.
Pfizer's Acquisition of Hospira Strengthens Its Moat at a Fair Price
Despite the high 39% premium to Hospira's stock price, we believe the acquisition price is justified based on Pfizer's ability to unlock more value with its global reach.
Leader in Genomic Sequencing Illuminates the Way
Continued technology advancements and market expansion support Illumina's narrow moat.
2 Wide Moats in Health Care
Distributors Henry Schein and Patterson should be able to maintain their competitive advantages over the long run and deserve a spot on investors' watchlists.
Allergan Defends Its Territory Against Increased Competition
Brand recognition and product innovation keep the firm's moat wide.
Unique Characteristics in Dental and Veterinary Distributor Markets Support Wide Economic Moats
We've upgraded our moat ratings for Henry Schein and Patterson Companies to wide on distribution network cost advantages and high switching costs among their fragmented customers and suppliers.
Patient Trends Improving, but Reimbursement Outlook Remains Bleak for Health Service Providers
Greater accountability creates a new level of operating uncertainty.
FDA Adapts to an Expanding Generic Drug Industry
The large manufacturers shouldn't have much trouble with the new requirements, though.
No Bargains for No-Moat Health Service Providers
No-moat health service providers are most challenged by industry uncertainty.
Generic Manufacturers Find Their New Medicine
Emerging markets will be the next frontier of generic drug industry M&A.
A Healthy Challenge for Hospitals
The industry must spend again as patient volumes pick up.
Our Predictions for the Generics Industry Land Grab
As the generic industry consolidates, we predict what the future may hold.