He likes this. They have a diversified pipeline. Had a couple of mishaps. A fair amount was baked into their Alzheimer’s drug in November, and they kind of walked away from it. Also, their anti-inflammatory did not get FDA approval. There was some positive data from their Monarch pretrial, phase 3 of breast cancer. This is a very strong hold.

Right now Pharma is struggling. This company has cash generation and a diversified portfolio lineup. There are a number of factors for right now, but healthcare is facing a lot of headwinds now. You should be looking at this in the 10s, maybe low teens growth profile.

Cheap on this year’s earnings, but not so cheap on next year’s. Part of the problem with this company is that one of their major drugs Cymbalta goes off patent at the end of 2013. In the 3^rd quarter this drug was over 20% of their revenues, so they are looking at a pretty significant drop in revenues in 2014 and a more significant drop in earnings. A more interesting one would be Pfizer (PFE-N) as there are catalysts for change as they are looking at breaking this company up into 3 different divisions starting in 3 years but will start reporting on those divisions individually next year. He holds no pharmaceuticals at this time.

Has always traded at a lower valuation than some of the other pharmaceuticals. Has a fair number of patent expiry overhangs that it faces. There are only a few drugs that have been really able to keep their momentum going. On valuation, it always looks attractive, but with the problem of getting new drugs to market, there are other names that he would prefer such as Pfizer (PFE-N) or Johnson & Johnson (JNJ-N).

Had a very good run.  Due for a consolidation period.  If you are concerned, take half off the table.