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When thinking of major drug manufacturers, the company Pfizer tends to control both the conversation and thought. With a strong reputation, Dow recognition, and a market capitalization near 130 billion dollars, the excitement over this company is understandable. Nevertheless, while Pfizer may be a mo

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

re recognized house-hold name, another drug manufacturer, Wyeth (WYE), may actually support better fundamentals and potential when compared to this industry giant. Thus, as there are always capital gains to be earned from all industries, I believe, after examining this major specific industry, Wyeth

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

holds tremendous potential for increased shareholder optimism.

While it may be true that the new Democrat Congress may inflict some unlikable policies against these businesses, relative to what Wyeth produces, there is still a tremendous opportunity of growth over the long term for this company. Per

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

Yahoo! Finance, "Wyeth engages in the discovery, development, manufacture, and marketing of pharmaceuticals, vaccines, biotechnology products, and nonprescription medicines." Having a strong vertical control over the process of developing and marketing, with the upcoming baby boom generation nearing

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

the age of retirement, coupled with the continued need and the unlimited desire to fulfill the many diseases and illnesses across the globe, the future of Wyeth can be agreed upon as a bright one. In addition, with over 40 companies listed as major drug manufacturers, along with even more labeled as

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ther drug manufacturers, there will be tremendous competition for further growth, and only the companies with a strong management team which can produce strong fundamentals will prevail. Luckily for Wyeth, the company incorporates both of these aspects.

Speaking in terms of fundamentals, over the la

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

st fiscal year Wyeth has performed quite marvelously relative to its peers in the industry. Supporting revenue growth over 10% quarterly and earnings growth close to 17%, the management team led by CEO Robert Essner has allowed sales to continue to grow strong while managing to cut costs (Capital IQ)

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

. When comparing these numbers to some of Wyeth's competitors, it is clear that this company stands out. For example, close rival Eli Lilly & Co. could only manage a revenue and earnings quarterly growth increase of 9% and -81% respectively. Nevertheless it is true contested rival Pfizer has been abl

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

to allow for a strong 240% increase in earnings, but with a revenue growth rate below zero, the lack of sufficient sales will severely overplay the exaggerated net income performance. Returning back to the management utilization, Wyeth, over the past year, has been able to bring in an ROE of close t

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

o 32%. Not only does this number beat the industry average of 22%, but the number beats its competitors, Novo Nordisk (23%), Pfizer (16%), and Eli Lilly (22%), numbers as well. As I believe the ROE is one of the most important attributes to examine when trying to scrutinize a company, it is clear tha

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

Wyeth is lead by strong personnel who, in addition, are able to put up a twelve year profit margin of 20%, only below the aforementioned Pfizer because of reasons stated earlier. Furthermore, what I believe to be the most important component when deciding to purchase a stock, the P/E ratio, also is

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

highly praised for this company. Wyeth, with its near 13 earnings forward multiple, controls the industry which has a multiple staggering around 20. In addition, when compared to some of the highly regarded competitors, Wyeth's number easily beats out Eli Lilley's forward multiple of 15 and Novo Nord

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

isk P/E ratio of 19.5. While Pfizer does have a smaller number at 11, it is important to understand that the trailing multiple for Pfizer is also lower than the more important forward earning ratio, complementing the fact that shareholders will not be to optimistic with decreasing EPS estimates and l

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

wer guidance reports. In terms of other important multiples, Wyeth does provide some low ratios with its enterprise value to revenue (3.40), enterprise value to EBITDA (11.25), and price to sales (3.35). When compared to Eli Lilley's respective numbers of 3.89, 12.08, and 3.81 or Novo Nordisk's trail

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ing respective numbers of 4.26, 15.25, and 4.35, it is clear that Wyeth's fundamentals do tend to indicate that this company is undervalued relative to its price. In addition, Wyeth's PEG ratio over the next five years at 1.85 is also quite lower than both Eli Lilley and Pfizer. Moreover, over the mo

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

t recent quarter, Wyeth has had a dominating cash per share number of over six, which is three times the same indicator of Pfizer, regardless of the latter's recent cash supremacy. Therefore, as proven by the fundamentals, Wyeth has tremendous value not just over the industry but over its highly tout

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ed rivals as well.

All the aforementioned being said, some investors may still be cautious when examining how close Wyeth is to its 52 week high. While it is true many of the fundamentals presented were over the basis of the past twelve months, there are still many indicators leading me to believe t

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

hat this company is in store for a strong fiscal year. As both the forward P/E ratio and PEG are below industry standards, and the management team has proven their competence, 2007 should be a continued evolution upon the given numbers in the positive direction. As the beta of Wyeth is slightly below

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

0.3, and the S&P 500 is looking for another strong year with the pleasant economic data set forth, Wyeth should have no problem reaching positive territory for most investors who purchase shares. Furthermore, with a current share price below the 50 day SMA and short ratio near three (higher than most

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

other competitors), now would be a near ideal time to become a shareholder of this company. Thus, after going through the given fundamentals and comparison to both the industry and its rivals, as an investor, you should absolutely feel much more confident to garnering some of your capital into Wyeth

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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