Hanmi (HAFC) (HBNC) (LLY) (LTD) (MDT) (MS) Get New Coverage

Hanmi Financial Corp. (NASDAQ: HAFC), Horizon Bancorp (NASDAQ: HBNC), Eli Lilly & Co. (NYSE: LLY), Limited Brands (NYSE: LTD), Medtronic, Inc. (NYSE: MDT) and Morgan Stanley (NYSE: MS) getting new coverage from analysts.

FBR Capital initiated coverage on Hanmi Financial Corp. (HAFC). They placed an “Outperform” rating and a price target of $12.80 on the company.

Sandler O'Neill initiated coverage on Horizon Bancorp (HBNC). They placed a “Buy” rating on the company.

MKM Partners initiated coverage on Eli Lilly & Co. (LLY). They placed a “Sell” rating and a price target of $33.00 on the company.

Collins Stewart initiated coverage on Limited Brands (LTD). They placed a “Neutral” rating and a price target of $42.00 on the company.

Susquehanna initiated coverage on Medtronic, Inc. (MDT). They placed a “Neutral” rating and a price target of $40.00 on the company.

Evercore Partners initiated coverage on Morgan Stanley (MS). They placed an “Equal Weight” rating on the company.

Eli Lilly & Co. (LLY) (HAR) (HD) (HON) Price Targets Changed

Eli Lilly & Co. (NYSE: LLY), Harman International Industries Inc. (NYSE: HAR), Home Depot (NYSE: HD) and Honeywell International Inc. (NYSE: HON) had price targets on them adjusted by analysts.

Harman International Industries Inc. (HAR) had its price target raised by JPMorgan Chase & Co. (NYSE:JPM) to $53.00.

Home Depot (HD) had its price target raised by Citigroup (NYSE:C) to $44.00. They have a “Buy” rating on the company.

Honeywell International Inc. (HON) had its price target raised by Citigroup (NYSE:C) to $55.00. They have a “Neutral” rating on the company.

Eli Lilly & Co. (LLY) had its price target lowered by Jefferies (NYSE:JEF) to $33.00. They have a “Hold” rating on the company.

Cisco (CSCO) (NOG) (SNX) (SPRD) (LLY) (DCT) Upgraded

Cisco Systems, Inc. (NASDAQ: CSCO), Northern Oil & Gas, Inc. (NYSE: NOG), SYNNEX Co. (NYSE: SNX), Spreadtrum Communications (NASDAQ: SPRD), Eli Lilly & Co. (NYSE: LLY) and DCT Industrial Trust Inc. (NYSE: DCT) upgraded by analysts.

Northern Oil & Gas, Inc. (NOG) was upgraded by Global Hunter Securities from a “Neutral” rating to an “Accumulate” rating. They have a price target of $24.00 on the company.

SYNNEX Co. (SNX) was upgraded by Stifel Nicolaus from a “Hold” rating to a “Buy” rating. They have a price target of $32.00 on the company.

Spreadtrum Communications (SPRD) was upgraded by Needham & Company from a “Buy” rating to a “Strong Buy” rating.

Cisco Systems, Inc. (CSCO) was upgraded by Gleacher & Co. from a “Neutral” rating to a “Buy” rating. They have a price target of $20.00 on the company.

Eli Lilly & Co. (LLY) was upgraded by Argus from a "Hold” rating to a “Buy” rating.

DCT Industrial Trust Inc. (DCT) was upgraded by FBR Capital from an “Underperform” rating to an “Outperform” rating.

Teck (TCK) (RTN) (RSH) (OIS) (KEG) (LLY) Upgraded

Teck Resources Limited (NYSE: TCK), Raytheon Company (NYSE: RTN), RadioShack (NYSE: RSH), Oil States International, Inc. (NYSE: OIS), Key Energy (NYSE: KEG) and Eli Lilly & Co. (NYSE: LLY) upgraded by analysts.

Teck Resources Limited (TCK) was upgraded by BB&T (NYSE:BBT) from a “Hold” rating to a “Buy” rating.

Raytheon Company (RTN) was upgraded by Sanford C. Bernstein from a “Market Perform” rating to an “Outperform” rating.

RadioShack (RSH) was upgraded by Goldman Sachs (NYSE:GS) from a “Neutral” rating to a “Buy” rating. They have a price target of $18.00 on the company.

Oil States International, Inc. (OIS) was upgraded by Credit Suisse (NYSE:CS) from a “Neutral” rating to an “Outperform” rating. They

have a price target of $110.00 on the company.

Key Energy (KEG) was upgraded by Weeden from a “Hold” rating to a “Buy” rating. They have a price target of $26.00 on the company.

Eli Lilly & Co. (LLY) was upgraded by Leerink from an “Underperform” rating to a “Market Perform” rating.

SanDisk (SNDK) (SWKS) (T) (UNP) (LLY) EPS Estimates Changed

SanDisk Co. (NASDAQ: SNDK), Skyworks Solutions, Inc. (NASDAQ: SWKS), AT&T Inc. (NYSE: T), Union Pacific (NYSE: UNP) and Eli Lilly & Co. (NYSE: LLY) EPS estimates changed by analysts.

UBS AG (NYSE:UBS) cuts its EPS estimate on SanDisk Co. (SNDK). They have a “Buy” rating and a price target of $62.00 on the company.

UBS AG lowered its EPS estimate of Skyworks Solutions, Inc. (SWKS). They have a “Buy” rating on the company. They cited valuation as the catalyst behind the call.

Goldman Sachs (NYSE: GS) boosted its EPS estimate on AT&T Inc. (T). They have a “Neutral” rating and a price target of $30.00 on the company.

Credit Suisse (NYSE: CS) raised its EPS estimate on Union Pacific (UNP). They have an “Outperform” rating and a price target of $131.00 on the company.

Goldman Sachs raised its EPS estimate on Eli Lilly & Co. (NYSE: LLY). They have a “Sell” rating and a price target of $35.00 on the company.

Price Targets (INTC) (JBLU) (LABL) (LAZ) (LLY) Weekly Recap

Price targets on shares of Intel (NASDAQ: INTC), Jetblue Airways Corp (NASDAQ: JBLU), Multi Color Corp (NASDAQ: LABL), Lazard Ltd (NYSE: LAZ) and Eli Lilly & Co. (NYSE: LLY) updated by analysts during the last week.

Bank of America (NYSE:BAC) raised their price target on Intel (INTC) from $24.00 to $26.00. They have a “neutral” rating on the company.

JPMorgan Chase & Co. (NYSE:JPM) raised their price target on Jetblue Airways Corp (JBLU) from $7.00 to $8.00.

Hilliard Lyons raised their price target on Multi Color Corp (LABL) from $24.00 to $30.00. They have a “buy” rating on the company.

Bank of America raised their price target on Lazard Ltd (LAZ) from $51.00 to $54.00. They have a “buy” rating on the company.

Bank of America raised their price target on Eli Lilly & Co. (LLY) to $43.00.

Price Targets on (AMGN) (WINN) (DELL) (LLY) (TJX) Updated

Price targets on shares of Amgen, Inc. (NASDAQ: AMGN), Winn-Dixie Stores, Inc. (NASDAQ: WINN), Dell Inc. (NASDAQ: DELL), Eli Lilly & Co. (NYSE: LLY) and TJX Companies Inc (NYSE: TJX) updated by analysts.

Oppenheimer raised their price target on Amgen, Inc. (AMGN) to $66.00. They have an “outperform” rating on the company.

Barclays Capital (NYSE:BCS) raised their price target on Winn-Dixie Stores, Inc. (WINN) from $8.00 to $11.00. They have an “overweight” rating on the company.

Citigroup (NYSE:C) analysts raised their price target on shares of Dell Inc. (DELL) from $19.00 to $20.00. They now have a “buy” rating on the company.

Goldman Sachs analysts raised their price target on shares of Eli Lilly & Co. (NYSE: LLY) to $35.00. They now have a “sell” rating on the company.

Citigroup analysts cut their price target on shares of TJX Companies Inc (NYSE: TJX) to $46.00. They now have a “sell” rating on the company.

Price Targets on (INTC) (JBLU) (LABL) (LAZ) (LLY) Updated

Price targets on Intel (NASDAQ: INTC), Jetblue Airways Corp (NASDAQ: JBLU), Multi Color Corp (NASDAQ: LABL), Lazard Ltd (NYSE: LAZ) and Eli Lilly & Co. (NYSE: LLY) were updated by analysts.

Bank of America (NYSE:BAC) raised their price target on Intel (INTC) from $24.00 to $26.00. They have a “neutral” rating on the company.

JPMorgan Chase & Co. (NYSE:JPM) raised their price target on Jetblue Airways Corp (JBLU) from $7.00 to $8.00.

Hilliard Lyons raised their price target on Multi Color Corp (LABL) from $24.00 to $30.00. They have a “buy” rating on the company.

Bank of America raised their price target on Lazard Ltd (LAZ) from $51.00 to $54.00. They have a “buy” rating on the company.

Bank of America raised their price target on Eli Lilly & Co. (LLY) to $43.00.

Price Targets on (INTC) (JBLU) (LABL) (LAZ) (LLY) Updated

Price targets on Intel (NASDAQ: INTC), Jetblue Airways Corp (NASDAQ: JBLU), Multi Color Corp (NASDAQ: LABL), Lazard Ltd (NYSE: LAZ) and Eli Lilly & Co. (NYSE: LLY) were updated by analysts.

Bank of America (NYSE:BAC) raised their price target on Intel (INTC) from $24.00 to $26.00. They have a “neutral” rating on the company.

JPMorgan Chase & Co. (NYSE:JPM) raised their price target on Jetblue Airways Corp (JBLU) from $7.00 to $8.00.

Hilliard Lyons raised their price target on Multi Color Corp (LABL) from $24.00 to $30.00. They have a “buy” rating on the company.

Bank of America raised their price target on Lazard Ltd (LAZ) from $51.00 to $54.00. They have a “buy” rating on the company.

Bank of America raised their price target on Eli Lilly & Co. (LLY) to $43.00.

Pharmaceuticals (LLY) (BMY) (ABT) (PFE) (TEVA) Trade Mixed Tuesday

Shares of pharmaceuticals Eli Lilly (NYSE:LLY), Bristol-Myers Squibb (NYSE:BMY), Abbott Labs (NYSE:ABT), Pfizer (NYSE:PFE) and Teva (NASDAQ:TEVA) closed mixed Tuesday, with the NYSE Drug index ending the session at 331.74.

Leading the drug winners on Tuesday was Eli Lilly (:LLY), which closed at $38.09, gaining $0.78, or 2.09 percent.

Bristol-Myers Squibb (BMY) also had a good Tuesday, closing the session at $28.83, up $0.38, or 1.34 percent.

Next was Abbott Labs (ABT), which closed out at $52.85, rising $0.26, or 0.49 percent.

Pfizer (PFE) was on the other end of the action, plunging $0.58, or 2.76, to end the day at $20.44. Teva was also under pressure, closing at $46.46, down $0.81, or 1.71 percent.

Dividend Yields for (LLY) (BMY) (MRK) (PFE) (ABT)

Indicated dividend yields for Standard & Poor's 500 Index companies Eli Lilly & Co (LLY), Bristol-Myers Squibb Co (BMY), Merck & Co Inc (MRK), Pfizer Inc (PFE) and Abbott Laboratories (ABT).

These dividend data indicate dividend yields of companies in the Standard & Poor's 500 Index as of Saturday, April 30. The yield is determined by taking the latest declared dividend, annualized and divided by the price of the stock. Payout ratios are calculated based on latest quarterly dividend paid divided by earnings.

Eli Lilly & Co (LLY) has a dividend yield of 5.29 percent on a declared dividend of $0.49. The payout ratio is 51.6 percent.

Bristol-Myers Squibb Co (BMY) has a dividend yield of 4.70 percent on a declared dividend of $0.33. The payout ratio is 57.0 percent.

Merck & Co Inc (MRK) has a dividend yield of 4.23 percent on a declared dividend of $0.38. The payout ratio is 113.1 percent.

Pfizer Inc (PFE) has a dividend yield of 3.81 percent on a declared dividend of $0.20. The payout ratio is 49.8 percent.

Abbott Laboratories (ABT) has a dividend yield of 3.69 percent on a declared dividend of $0.48. The payout ratio is 79.4 percent.

Amylin (AMLN) Skyrockets on EU Recommendation of Bydureon

After an EU regulatory panel recommended Amylin's (NASDAQ:AMLN) diabetes drug Bydureon to be approved, shares of the company soared by about 13 percent.

This follows a disappointing refusal from the U.S. Food and Drug Administration in the latter part of 2010, which said it needed more information on the drug before it would recommend it for approval.

The three companies will said today they'll supply additional information to the FDA in the second half of 2011.

Shares of Alkermes (NASDAQ:ALKS), which developed the delivery system for Bydureon, were also hopping today.

Alkermes was trading at $13.95, gaining $0.54, or 4.03 percent, as of 12:27 PM EDT. Amylin was at $12.71, rising $1.45, or 12.88 percent. Eli Lilly, also a partner in the drug, was trading at $36.02, up $0.27, or 0.76 percent.

Pfizer (PFE) Getting Smaller to Get Back to Core Business?

As everyone who follows the industry knows, Pfizer (NYSE:PFE)has spent the last 20 years just getting bigger and bigger. Not that they haven't shed people, buildings, and whole research sites - have they ever - but they've shed those resources after buying them first. And as everyone who follows the industry knows, Pfizer's own labs have, either through bad luck or something more systemic, been rather unproductive during that same period. And now Lipitor moves ever closer to its patent expiration. What to do?

Well, Matthew Herper at Forbes has one analyst's answer, and it might just be what Pfizer's CEO is thinking as well. It's something new, all right: get smaller.

Bernstein Pharmaceuticals analyst Tim Anderson has a note out this morning suggesting that Pfizer could sell, spin off, or otherwise divest divisions accounting for $32 billion of its $67 billion in sales, reinventing itself as a pure pharmaceutical research firm like Eli Lilly (NYSE:LLY), Bristol-Myers Squibb (NYSE:BMY), or AstraZeneca (NYSE:AZN).

"We recently met with Pfizer’s new CEO Ian Read, and had we not heard it firsthand, we might not have appreciated just how serious he is about potentially splitting up the company," Anderson writes. He goes on to say that Pfizer may shrink its revenue base by 40%, leaving behind only what Read calls the "innovative core."

The more cynical among you might be saying "Where this innovative core, eh?," but hear the guy out. He's talking about ditching all of Pfizer's non-pharma assets, and cutting back to ... discovering drugs. Combine that with the recent cutbacks in various therapeutic areas, and you have a Pfizer that's actually turning its back on the strategy of the last two decades. Bigger, as it turns out, has not been better.

Pfizer closed Tuesday at $19.76, down $0.05, or 0.25 percent.





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Patents for (GSK)(BMY)(PFE)(LLY)(MRK) Facing Expiration

The already beaten down pharma sector appears to be ready to take more hits over the next year or so, as major patents are set to expire, making room for generic competitors with cheaper prices to enter the playing field.

Here is a list of five major companies and the patents about to expire for them:

Pfizer, Inc. (PFE): Lipitor, expiring late 2011: $5.3 billion. Protonix, expiring 2011: $690 million. Viagra, 2012: $1.0 billion. Detrol / Detrol LA, 2012: $693 million.

GlaxoSmithKline, Inc. (GSK): Avandia expiring 2012: $367 million. Avodart, 2015: $523 million.

Merck and Co. (MRK): Singular,expiring 2012: $3.2 billion. Propecia, 2013: $447 million (worldwide).

Eli Lilly, Inc. (LLY): Zyprexa, expiring later 2011: $2.5 billion , Cymbalta, 2013: $2.77 billion . Roughly three-quarters of Lilly’s current revenue comes from eight drugs that will lose patent protection between now and 2017.

Pfizer was trading at $19.41m, gaining $0.05, or 0.23 percent, as of 12:08 PM EST. GlaxoSmithKline was trading at $38.49, up $0.09, or 0.23 percent. Merck was at $32.74, up $0.22, or 0.68 percent. Eli Lilly was at $34.83, up $0.06, or 0.17 percent. Bristol Myers Squibb was at $26.24, losing $0.02, or 0.10 percent.




20 comments

Pfizer (PFE), Merck (MRK) About to Die, Along with (NVS), (LLY), (AZN), (GSK), (FRX)?

To say the outlook for big pharma is bleak would be an understatement, as over the next couple years, major patents for key drugs at Pfizer (NYSE:PFE), Merck (NYSE:MRK) Novartis (NYSE:NVS) Eli Lilly (NYSE:LLY) AstraZeneca (NYSE:AZN), GlaxoSmithKline (NYSE:GSK) and Forest Laboratories (NYSE:FRX).

Pfizer (NYSE: PFE) has a huge task cut out for it. The company's blockbuster cholesterol treatment Lipitor, which loses patent protection in November, is the highest-selling drug in the world, and now the company has the tough mission of figuring out how to replicate its success.

Lipitor, launched in 1997, has fetched $10 billion in annual revenues to the company since then. The equation, however, would soon change when generic-drug makers begin selling cheaper versions. Plus, Pfizer's patent for Xalatan glaucoma drug also expires in 2011. So what's a huge pharma company to do?

The other victims

Fortunately, Pfizer is not alone in battling patent troubles. Other big pharmaceutical firms are also facing a similar challenge.

Merck's (MRK) asthma drug Singulair goes off-patent in 2012 while Novartis' (NVS) patents on its cancer drug Zometa and hypertension treatment Diovan are set for expiration in 2012. Eli Lilly's (LLY) schizophrenia drug Zyprexa goes off-patent in 2011. AstraZeneca's (AZN) patent on cholesterol drug Crestor is set to expire in 2012. GlaxoSmithKline's (GSK) Avandia and Forest Laboratories' (FRX) Lexapro are also slated to go off-patent next year. In other words, the patent expiration process is simply another reality of doing business in this particular line of work.

For these drugmakers that have relied heavily on their patented offerings to generate revenue, the next few years appear unusually daunting. One estimate suggests a total of more than 10 medicines would start facing generic competition from this year, resulting in a loss of nearly $50 billion in terms of annual sales of all these medicines put together.




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Human Genome Sciences' (HGSI) Lupus Drug Approved

Human Genome Sciences (NASDAQ:HGSI) had its lupus drug named Benlysta approved by the U.S. Food and Drug Administration; the first lupus drug approval in over 50 years.

Dr. Gary Gilkeson, chairman of the Lupus Foundation of America's medical scientific advisory council, said, "Getting this approval will lead to pharmaceutical companies wanting to continue to push and get other drugs approved."

There are approximatley 5 million people around the globe diagnosed with lupus, which can lead to chest pain, fatigue, skin rash and kidney damage, among other issues.

Side effects from the trials of Benlysta include diarrhea, fever, and nausea.

It is thought the drug should generate billions in sales around the world for Human Genome Sciences.

Now that Benlysta has been approved, hopes are companies like Pfizer (NYSE:PFE) and Eli Lilly (NYSE:LLY) will go forward with some of their development programs for the disease.

GlaxoSmithKline (NYSE:GSK)shares moved up on the news after hours, as they'll distribute it in America, along with Human Genome Sciences.

Human Genome closed Wednesday at $25.68, up $0.01, or 0.04 percent. After hours trading was halted on the company. GlaxoSmithKline traded after hours at $39.50, up $0.92, or 2.38 percent.

Pfizer (PFE), Merck (MRK), Eli Lilly (LLY) to go Acquisition Route?

with Pfizer (NYSE:PFE) alone about to lose $10 billion in revenue from the ending of its patent on Lipitor, Eli Lilly (NYSE:LLY) and Pfizer not getting approval for certain drugs in the pipeline, and Merck (NYSE:MRK) abandoning two of its major clinical trials, the question is what will replace the existing pipelines of the companies.

The answer appears to be they will have to closely watch their smaller competitors with drugs coming up, and from there make strategic acquisitions.

There is risk on both sides there, as they have the challenge of acquiring a smaller company before approval of a drug in order to beat their larger competitors to it, but also the risk of a drug thought to be viable not being approved.

Astrazeneca PLC (NYSE:AZN ), GlaxoSmithKline (NYSE:GSK), Novartis AG (NYSE:NVS) and Novo Nordisk (NYSE:NVO) and Bayer were all recently downgraded by Morgan Stanley (NYSE:MS) on similar concerns.

Why Amylin Pharmaceuticals (AMLN), Kendle International (KNDL), Sigma Designs (SIGM) Got Crushed Last Week

Amylin Pharmaceuticals (Nasdaq:AMLN), Kendle International (Nasdaq:KNDL) and Sigma Designs (Nasdaq:SIGM) got hammered last week, falling from 13.07 percent to 25.38 percent in one day.

This is an all too familiar and distasteful feeling for investors in Amylin Pharmaceuticals. Back in October, they got crushed when Amylin lost almost half its market value after the FDA rejected its diabetes drug Bydureon, saying the drug needed more testing.

So yesterday, Amylin and partners Eli Lilly (NYSE:LLY) and Alkermes announced results from a new clinical trial against Novo Nordisk's (NYSE:NVO) Victoza (which weren't part of the regulatory process) and came up short. Apparently, way short. While the pharmaceutical still plans to resubmit its application to market Bydureon for the third time, investors aren't waiting around again.

Clinical research organization Kendle International sold off sharply yesterday over the big fourth-quarter loss it reported, reversing a year-ago profit, and it's down another 11% this morning.

Sigma's on board with Motorola Mobility (MMI), Cisco (Nasdaq:CSCO), and others, and Sigma-based boxes for IPTV solutions are expanding. There's no reason to think Sigma Designs won't be laughing at this plunge later.






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Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY), Abbot (NYSE:ABT),Bristol-Myers (NYSE:BMY), Merck (NYSE:MRK), Face EPS Pressure on Expirations

Major pharmaceuticals like Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY), Abbot (NYSE:ABT),Bristol-Myers (NYSE:BMY) and Merck (NYSE:MRK) will be EPS pressure over the next several years, as patents on major drugs expire at each of the companies.

Barclays says, "The U.S. Major Pharma industry careens to the edge of the Patent Cliff as the year 2011 unfolds. Throughout the next 24-36 months, we expect to see U.S. patent expiries on Lipitor (PFE), Zyprexa (LLY), TriCor (ABT), Plavix (BMY), Singulair (MRK), and Cymbalta (LLY). Further, we estimate the group will face an average of 5-10% in EPS downside pressure from additional U.S. Healthcare Reform measures and European pricing pressures in 2011. We expect limited upside to top-line and earnings guidance for the year. We believe this year will be critical for providing investors with a view beyond the cliff: will the industry be able to inflect its multiple trajectories after the 2011-2013 trough years?

"Rating based on long-term revenue and EPS growth: ABT (OW)(PT $55) and MRK (OW)(PT $41) have the highest estimated growth rate in 2011-2016 (revenue CAGRs of 4% and 1%, EPS CAGRs of 8% and 6%, respectively). Our projections are inclusive of recent pipeline setbacks (i.e. termination of ABT's Certriad and delay of ABT-874, reduced estimates for MRK's Vorapaxar and impact of the Johnson&Johnson (NYSE:JNJ) arbitration over Remicade). We are reducing our price target for ABT by 8% to $55 (from $60) and MRK by 5% to $41 (from $43), largely to reflect the sentimental negatives arising from the above-referenced setbacks, despite the continuity of our long-term views. We estimate PFE (OW)(PT $21) and BMY (OW)(PT $28) face -1% and -2% revenue declines during the 2011-2016 window and largely flat EPS trajectory. LLY (EW)(PT $39) looks least attractive, with our estimate of -3% revenue CAGR during the 2011-2016 window."

Merck closed Monday at $33.80, down $0.10, or 0.29 percent. Bristol-Myers closed at $26.00, dropping $0.06, or 0.23 percent. Abbot closed at $48.17, up $0.25, or 0.52 percent. Eli Lilly closed up at $34.78, gaining $0.02, or 0.06 percent. Pfizer ended the session at $18.45, up $0.09, or 0.50 percent.

Bristol-Myers (NYSE:BMY), Merck (NYSE:MRK) & Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY) Favorites in Wells (NYSE:WFC) Pharma Universe

Wells Fargo (NYSE:WFC) upgraded the pharma sector to "Overweight," with the top companies in their coverage universe being Bristol-Myers (NYSE:BMY), Merck (NYSE:MRK) & Pfizer (NYSE:PFE) and Eli Lilly (NYSE:LLY).

Wells stated, "We are upgrading our Sector Rating on Large Cap Pharmaceuticals to Overweight from Market Weight. Our recommendation change is predicated on potential positive near-term pipeline news, current trough valuation, and continued right-sizing of the companies.

"The patent cliff is finally here, but continued right-sizing could mitigate impact...The sector is trading at near trough valuation, in our view...Dividend yield and share repurchases could provide downside protection."

Bristol-Myers (BMY) closed Tuesday at $25.76, down $0.08, or 0.31 percent. Merck (MRK) closed at $33.87, losing $0.36, or 1.05 percent. Pfizer (PFE) ended the session at $18.38, gaining $0.04, or 0.22 percent. All of those are rated "Outperform" by Wells.

Eli Lilly (LLY), which is rated "Market Perform" by Wells Fargo (WFC), closed the day at $34.79, down $0.12, or 0.34 percent.