Abbot Laboratories

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Unexpected Industries With Bullish Forecasts

Key Points:

-- The credit crunch, combined with continued market volatility, has many investors looking at more conservative sectors.

-- Medical-Drugs (http://at.zacks.com/?id=4921) not only is a less economically-sensitive group, but also offers growth opportunities

-- Analysts have become more bullish on drug stocks

-- Medical-Drugs contains 7 Zacks #1 Rank ("strong buy") and 27 Zacks #2 Rank ("buy") stocks

Big Earnings For Large-Cap Pharma

Abbott Laboratories (NYSE: ABT) topped expectations last week and raised its full-year guidance.

The large-cap pharmaceutical company earned 79 cents per share in the third quarter, besting expectations by 2 cents. It was the 3rd positive surprise in 4 quarters. Net income rose 18.1% to $1.24 billion.

Revenues rose 17.6% to $7.5 billion. Several of ABT's divisions delivered double-digit growth: Nutritionals (+15%), Pharmaceuticals (+17%), Diagnostics (+15%) and Vascular (+58%).

Contributing to the growth was Humira, an anti-inflammatory treatment for rheumatoid arthritis and psoriasis, and Depakote, used for seizures. Humira not only saw higher sales, but also gained market share. ABT is also experiencing higher demand for its nutritional products from emerging markets. Finally, the launch of XIENCE V, a drug-eluting stent, had a stronger-than-expected launch.

Following the strong performance, Abbott Laboratories revised its full-year guidance to between $3.31 and $3.33 per share. All 11 of the covering brokerage analysts adjusted their profit projections in response, pushing the consensus earnings estimate 5 cents higher to $3.32 per share.

The majority of these analysts also raised their fiscal 2009 forecasts. The new consensus earnings estimate of $3.68 per share is 3 cents higher than the average forecast of a week ago.

ABT is a Zacks #2 Rank ("buy") stock.

Good Profits For Smaller Pharmaceutical Companies, Too

Cubist Pharmaceuticals (Nasdaq: CBST) joined ABT by issuing a bullish earnings report last week.

Third-quarter profits totaled 44 cents per share, 10 cents above expectations. It was the 3rd consecutive surprise for the company.

Revenues jumped 41% to $112.4 million. Antibiotic CUBICIN(R) not only saw more prescriptions written, but also gained market share against its primary competitor. Net product revenue from the drug totaled $109.2 million.

The company also saw some early success with MERREM, a treatment for skin infections. Cubist is marketing MERREM in the U.S. for AstraZeneca (NYSE: AZN). Management believes sales of this treatment will have a large impact in the fourth quarter.

Nearly all of the covering brokerage analysts raised their 2008 profit projections following the release of the third-quarter results. CBST is now projected to earn $1.24 per share this year, up 16 cents from last week's average forecast of $1.08 per share.

CBST is also Zacks #2 Rank ("buy") stock.

Estimates Also Raised On Other Drug Companies

As noted above, the Medical-Drugs group contains 10 Zacks #1 Rank ("strong buy") stocks, including AZN and ViroPharma (Nasdaq: VPHM), and 27 Zacks #2 Rank stocks, including Chattem (Nasdaq: CHTT).

AstraZeneca, which makes the acid reflux drug Nexium, is not expected to report until early November. Within the past few weeks, however, 2 of the 8 covering brokerage analysts raised their full-year forecasts. The revisions have pushed the consensus earnings estimate 4 cents higher to $4.85 per share.

ViroPharma will report next Wednesday, Oct 29. Ahead of the report, 3 of the 9 covering brokerage analysts have raised their third-quarter forecasts. The revisions, however, were not large enough to move the consensus earnings estimate, which continues to sit at 23 cents per share.

As part of its earnings release, VPHM could provide an update on Cinryze, which treats angioedema attacks (swelling underneath the skin). The company received FDA approval 2 weeks ago and is expected to launch the drug this quarter. Cinryze could achieve sales of $250 million to $300 million, which would have a significant impact on overall revenues and earnings.

Chattem, which markets over-the-counter treatments such as Coritzone-10 and Icy Hot, raised its fiscal 2008 guidance late last month. The company now projects that fiscal 2008 earnings will be between $4.20 and $4.25 per share, versus the previous guidance of $4 to $4.20 per share.

CHTT also issued initial fiscal 2009 guidance of $4.80 to $5 per share.

Both forecasts were above the consensus earnings estimates. In response, the majority of the covering brokerage analysts revised their forecasts higher. The new consensus earnings estimates are at $4.05 for fiscal 2008 and $4.67 for fiscal 2009.

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SOURCE: Zacks.com

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Charles Rotblut, CFA 
Phone: 312-265-9352 
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Highlights of this year's program include:

TUESDAY, SEPT. 16

-- "The Disappearing Middle Class and Its Effect on Black America" (Renaissance Hotel, Grand Ballroom, 999 Ninth St. NW, Washington D.C. , 3--5 p.m.), a timely and interactive town hall meeting that will examine realities and perceptions about the black middle class against today's challenging and shifting economic landscape; audience members will be polled in real-time to gauge their thoughts about central questions and themes

The panel will feature:

-- Alvin Brown -- former adviser, Hillary Clinton for President 2008

-- Michael Eric Dyson -- author, intellectual, Georgetown University professor

-- Michael Fletcher -- Washington Post economics correspondent

-- Lawrence Otis Graham -- author and commentator

-- Roland Martin (moderator) -- journalist, CNN and TV ONE contributor

-- Lisa Toppin -- Charles Schwab vice president

WEDNESDAY, SEPT. 17

-- The inaugural NBMBAA Entrepreneurial Institute, a two-tiered pre-conference bootcamp for aspiring entrepreneurs (startup track) and established businessowners who want to further their reach (growth track); the closing Institute luncheon will recognize this year's NBMBAA/Wells Fargo Entrepreneur Excellence Award winners

-- The Leadership Institute, with a keynote address delivered by business guru Tom Peters

-- The Grand Affair, the conference welcome program and awards ceremony

THURSDAY, SEPT. 18 & FRIDAY, SEPT. 19

-- The NBMBAA Career Fair, which will feature more than 400 exhibitors

-- The Industry Theatre, where leading companies will discuss trends and business models in four emerging categories: global media and entertainment; healthcare/biotech; food & beverage; and energy

              Featured presenters include:
              -- Abbot Laboratories                  -- Humana
              -- American Electric Power             -- Johnson & Johnson
              -- Black Enterprise                    -- Kroger
              -- Burger King                         -- Sempra Engery
              -- The Campbell Soup Co.               -- Sodexo
              -- Cisco                               -- Sony
              -- Constellation Energy                -- SUPERVALU
              -- Cox Communications
              -- Duke Energy
              -- Exelon

-- The Career Success Network CenterSM, sponsored by ExxonMobil, where attendees can obtain:

              -- Career, executive and life coaching
              -- Resume feedback
              -- Interview preparation

-- Marquee addresses from Bank of America chairman, CEO and president Kenneth D. Lewis, noted psychologist, motivational speaker and preacher Dr. Robin Smith, Magic Johnson Enterprises chairman and CEO Earvin "Magic" Johnson; civil rights counselor Wade Henderson; author and inspirational speaker Simon T. Bailey; and networking expert George C. Fraser, among many others

-- The NBMBAA Case Competition, sponsored by the Chrysler Foundation, which will feature teams from more than 30 business schools across the nation

-- Opportunities to learn about the unique, detailed experiences of black professionals via the Men's and Women's Forums (Sept. 18) and The Relationship Forum (Sept. 19)

SATURDAY, SEPT. 20

-- The Farewell Brunch, the perfect health and wellness-themed capstone to conference activities that will let attendees get fit and have fun

-- State Farm Strokes FORE Scholarships Golf Tournament (Lake Arbor Golf Club, 1401 Golf Course Drive, Mitchellville, Md., 8:30 a.m.-- 3:00 p.m.), sponsored by the NBMBAA local D.C. chapter

SOURCE: The National Black MBA Association

Beaman Incorporated 
Meghan Haynes, 312.751.9689 ext. 15 
mhaynes@beamaninc.com

Professor Pandey's career in pharmaceutical research has spanned over 40 years with positions at the National Cancer Institute (US), Abbot Laboratories, Lyphomed and his most recent position was as the President, CEO and Chairman of the Board of Xechem International, a publicly held Company located in New Brunswick, New Jersey. While at Xechem, Prof. Pandey was instrumental in the development of processes for the manufacture of Paclitaxel and second generation Paclitaxel; establishing a line of Nutraceuticals that were marketed through the company's XetaPharm subsidiary; and establishing offices in the UK, China, India and Nigeria. The Nigerian subsidiary, Xechem Pharmaceuticals Nigeria, Ltd., was established to manufacture and market NICOSAN(TM) a phytopharmaceutical for the treatment and management of Sickle Cell Disease (SCD), licensed from the National Institute of Pharmaceutical Research and Development (NIPRD) in Abuja, Nigeria.

Dr. Pandey's current projects include his mission of bringing credibility and acceptability to Traditional Systems of Health and Medicines to Western Cultures through GDPAU and establishing and organizing a Multi-National Drug Discovery Team that will collaborate on phytopharmaceuticals for the treatment of Malaria and other neglected diseases.

About GDPAU - GDP Ayurvedic University (GDPAU) is a "Not-for-Profit" tax exempt 501(c) (3) Organization established in the year 2001 New Brunswick, New Jersey with the vision to bring credibility and recognition to the Traditional Systems of Health and Medicines through research, education, training therapy and mass promotion. The mission of GDPAU is to establish a state-of-the-art center of excellence in the field of Ayurveda, Yoga and Allied Alternative System of Medicines in the USA, India and other parts of the world. GDPAU envisions a center where people, experts and researchers from "Alternative Systems of Medicines and Modern Medical System" work together for the Health Care Delivery, Health Promotion, Integral Disease Management and Adjunctive/Alternative Management of diseases, which are cost effective, reliable, easy and credible with constant support of advanced medical sciences in the respective fields. GDPAU's website is http://gdpau.com/.

About NIPER - National Institute of Pharmaceutical Education and Research (NIPER) is the first National level institute in pharmaceutical sciences with a proclaimed objective of becoming a centre of excellence. The Government of India has declared NIPER as an 'Institute of National Importance'. It is an autonomous body set up under the aegis of Ministry of Chemicals and Fertilizers, Government of India. The Institute is conceived to provide leadership in pharmaceutical sciences and related areas not only within the country, but also to the countries in South East Asia, South Asia and Africa. NIPER is a member of Association of Indian Universities and Association of Commonwealth Universities. NIPER's website is http://niper.gov.in.

SOURCE: GDP Ayurvedic University

GDP Ayurvedic University 
Dr. Ramesh Pandey, 732-317-8124

Kelly Kliner has career experience in both inside and outside sales with ICG Telecommunications, Abbot Laboratories and Frontier Telecommunications. She earned a bachelor's degree in Communications from the University of Colorado.

Scott Lenox comes to OCI with sales experience in technology and communications with CareerBuilder.com, Sprint Nextel, CDW Select, and CDW Direct. He holds a bachelor's degree in Business from Loras College in Dubuque, Iowa. http://www.oci.com [Benefit Intelligence]

About OCI

OCI is an information management solutions provider that helps companies make better-informed decisions about their risk management and employee benefit programs.

OCI has designed and delivered integrated health and productivity solutions to Fortune 1000 companies since 1984. Using secure web-based applications, a flexible, client-centric approach and deep industry experience, our solutions transform data into information and knowledge, giving our customers the power to increase administrative efficiency, reduce expenditures and improve productivity.

                              http://www.oci.com

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