We are generally positive on the pharmaceutical industry heading into 2009. We expect the majority of stocks to fair far better in 2009 than they did in 2008, based on a number of attributes.

Firstly, almost all the names in the group are trading at very reasonable valuations. Several of the largest players are trading at PEs below 10x, including Pfizer Ltd. (

...

We are generally positive on the pharmaceutical industry heading into 2009. We expect the majority of stocks to fair far better in 2009 than they did in 2008, based on a number of attributes.Firstly, almost all the names in the group are trading at very reasonable valuations. Several of the largest players are trading at PEs below 10x, including Pfizer Ltd. (PFE, 8x), Eli Lilly & Co. (LLY, 9x), Merck (MRK, 9x), AstraZeneca (AZN, 9x) and Wyeth (WYE, 10x) based on our fiscal 2009 estimates.Secondly, expectations are low. Most of the companies are not expected to generate significant revenue growth, and earnings growth is primarily being drive by cost-cutting and share buybacks. Therefore, there seems little downside risk to our financial models, even should the economy continue to struggle throughout the entire year. So we do not see much risk ...

Wyeth Pharmaceuticals (WYE) is one of the world's largest research-driven pharmaceutical and healthcare products companies. It focuses on the discovery, development, manufacturing and marketing of pharmaceuticals, vaccines, biotechnology products and non-prescription medicines.Wyeth's recent performance has been stunted due to the entry of generic Protonix in late 2007. EPS growth through 2009 will benefit from recently implemented productivity initiatives and share repurchases. Recent pipeline setbacks and generic competition will cause a drag on financial performance.The next wave of sustainable revenue growth will not come until 2012. We believe the current valuation is fair and rate the shares a Hold with a $42 price target.Jason Napodano, CFA contributed to this report.Read the full analyst report on WYE "WYE" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Pfizer, Inc. (PFE) is the world's largest pharmaceutical company in terms of sales. In 2007, Pfizer posted sales from continuing operations of $48.4 billion, which was flat from 2006.Although we believe Pfizer continues to face an uphill battle in growing its top-line given the company's sheer size and lack of a significant pipeline, near-term earnings growth will come in the form of cost-cutting and share repurchases. We are also concerned with the lack a catalyst to increase revenues once Lipitor loses patent exclusivity in 2011.However, Pfizer should to look to do a number of significant deals in the pharma and biotech industry in 2009. The company has an enormous cash balance, and should be able to buy its way around the Lipitor patent cliff.Our recommendation is Buy based on attractive valuation, high dividend, and strong financial position. We see $22 as fair-value....

The five best performing stocks on the Zacks #1 Rank List last week were: Scopus Video Networks Ltd. (...

Shares of Alpharma Inc. (ALO) are experiencing unusually high trading volume. The stock advanced almost 2% this afternoon.

Questcor Pharmaceuticals Inc. (QCOR) stock is trading on an unusually low volume. Shares of the specialty pharmaceutical company jumped nearly 5% midday.

"ALO" Free Stock Analysis: Buy? Sell? Hold?"QCOR" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Warner Chilcott Limited (...

Abbott Laboratories (ABT) discovers, develops, manufactures and sells a diversified line of healthcare products. We expect double-digit EPS growth over the next few years driven by strong sales of Humira and the company's rapidly growing vascular business.Several new drug applications have recently been filed with the FDA which should accelerate sales in the pharmaceutical business. Based on our model, the company is expected to deliver high single-digit EPS growth through the end of 2013.We believe ABT possesses a low-risk profile and will continue to trade at an industry premium. Accordingly, we reiterate our Buy recommendation with a price target of $65.Jason Napodano, CFA contributed to this report.Read the full analyst report on ABT "ABT" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

The healthcare sector is not homogeneous and includes many different industries ranging from managed care organizations, healthcare facilities providers, medical device manufacturers through to biotech and traditional pharmaceutical companies. Investors in heathcare therefore should remain mindful of the different drivers and appropriate metrics associated with the various sub-sectors.

That said, and recent market volatility aside, long-term growth of the healthcare sector overall continues to be fueled by the aging of the population and decisions in Congress related to government funding. Changes to healthcare policy remain an important signpost to investing in the sector.

President-elect Obama's pledge to address the issue of universal healthcare, coupled with the recent appointment of Tom Daschle to the position of Secretary of Health and Human Services and the commencement of information gathering meetings at the regional level, suggest healthcare reform initiatives will most likely be executed sooner rather than later. Funding for the State Children's

...

Yesterday, very few investors even knew about Dynavax Technologies Corp., but today the company received much attention after announcing a worldwide strategic alliance with GlaxoSmithKline (NYSE: GSK) to discover, develop and commercialize novel inhibitors of endosomal Toll-like Receptors (TLRs) to treat immuno-inflammatory diseases. As of Wednesday afternoon, the stock is up approximately 458% on 8.7 million traded shares.

Through the alliance, Dynavax will receive $10 million from GSK for the exchange of an exclusive option over four programs targeting autoimmune and inflammatory diseases such as lupus, psoriasis, and rheumatoid arthritis. According to the press release, Dynavax can receive future potential development and commercialization milestones totaling approximately $200 million per program. GSK has the exclusive option to license each program upon achievement of proof-of-concept or earlier depending on certain circumstances.

Dino Dina, M.D., President and Chief Executive Officer of Dynavax, commented, “Our alliance with GSK provides an opportunity to create an entirely

...