Did John 3:16 Predict These Companies' Successes?

Tim Tebow's success with the Denver Broncos has made John 3:16 extremely popular recently, prompting private citizens and investors to take a step back and think about what's important in life. The Biblical quote alludes to immortality, a concept that has eluded humans for thousands of years. In this day and age, however, the human race may be quickly inching towards immortality, or at least elongated lifespans.

Every single day, entire companies attempt to find ways to improve and extend people's lives. Whether Pfizer PFE is developing cardiovascular medication or Nutrisystem NTRI is trying to manage body fat, firms are dedicated to furthering the human race.

Outside of a Biblical context, John 3:16 could have represented an ancient plea for extended life. Considering the scientific advances over the last century, perhaps some companies are on track to fulfill the age-old prophecy of infinite life.

Dendreon Corporation

Dendreon DNDN is a storied mid-cap stock that has struggled in the last year to appease investors. While its existing product line has helped thousands of patients across the country, investors were disappointed in August 2011 when its new drug, Provenge, failed to beat sales expectations.

Provenge is a drug that aims to treat many forms of prostate cancer, regardless of disease progression. While the drug was positively viewed by the medical community and Wall Street, dismal third quarter sales in 2011 prompted traders to push the stock down. In the first week of January 2012, however, Dendreon announced positive fourth quarter revenues, citing successful Provenge sales as an important revenue driver. The news propped the stock up higher, but did not return it to its levels before August 2011.

Dendreon's patent portfolio could be fully realized in the future, and investors may be interested in the potential growth story that the company offers. With various cancer medications and other drugs, Dendreon may be one company that significantly helps patients' lives.

Jazz Pharmaceuticals

Jazz Pharma JAZZ is a mid-cap pharmaceutical that is primarily focused on research and development along with distribution of its products. It currently markets two products, one for narcolepsy and one for obsessive compulsive disorder. It also has other medications in the pipeline, one for fibromyalgia and one for epilepsy.

Jazz Pharma is steadily growing and could pose another growth story for investors. Its business model is unique compared to its direct competitors. Most pharmaceuticals aim to focus on a single class of diseases. For example, many companies only focus on cancer therapies. Others focus only on neurodegenerative disorders. Jazz, on the other hand, has been targeting multiple diseases, and may be poised to have a truly significant impact on a large proportion of patients in the US.

Jazz may currently be an attractive growth investment for those considering biopharma stocks. It has almost 40% revenue growth over the last three years and it has high operating and net margins, both of which are over 45%. Its return on equity is also about 160%, and the company operates with a debt/equity ratio close to 0.

Weight Watchers International

Weight Watchers WTW is a large-cap company that's popular amongst millions of Americans. Weight Watchers offers its clients dietary and exercise-related tools to help shed weight, which has been implicated in many human disorders. Obesity is a dangerous condition that is currently spreading across the world. While many diets have been attempted, few programs have successfully cured Americans of extra fat.

At some point in the future, preventative care may trump reactionary medicine. This means that Americans will try to prevent becoming obese in the first place, making nutritionists and other preventative care providers very sought after. Given this prospect, Weight Watchers could be a very interesting growth stock.

Americans are barreling down a road that will result in extremely high health care costs, and it will only be a matter of time for citizens to realize that eating well and exercising is the key to success. Until then, many pharmaceuticals will be searching for compounds that artificially shed fat without contributing to actual the fundamentals of patients' lifestyles.

The Bottom Line:

Preventative medicine and other types of treatment that target holistic health and positive lifestyles will eventually become large in the biomedical landscape. Investors could get in on the action right now and consider companies that have promising prospects for investments. Will the aforementioned companies become mega-cap firms when medicine finally figures out how to make humans immortal? Only time will tell.


ACTION ITEMS:

Bullish View:
Traders who believe that medicine will figure out immortality might want to consider the following trades:
  • Long the aforementioned companies. Those that target detrimental diseases like cancer or AIDS may prevail in the future.
  • Diversified pharmaceuticals with extensive patent portfolios could increase their chances of finding blockbuster medications for a niche disease could benefit in the future.
  • Preventative medicine will one day become the largest field of medicine, as consumers become tired of paying for unnecessary medication when healthy lifestyles could prevent the ailments in the first place. Companies like Weight Watchers and Nutrisystem will benefit greatly.
Bearish View:
Traders who believe that immortality is impossible may consider the following positions:
  • Short companies that focus solely on biochemical treatments. Companies will eventually shift to gene therapy in order to solve mysterious diseases and problems.
  • As preventative medicine becomes prevalent, consumers will eventually realize that fast-food restaurants are detrimental to health, meaning that companies such as McDonald's MCD will become negatively viewed by the public.
  • Short companies that focus on one particular disease. These companies are a dime a dozen and will be phased out as pharmaceutical conglomerates eventually cover all disease classes. Large pharmas will eat up market share and small, non-diversified companies will not succeed.
Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
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