There have been several noteworthy developments in the drug space recently, which will likely have a material impact on the companies in this sector and the markets they serve. Companies mentioned in this review include Bristol-Myers Squibb (BMY), Pfizer Inc. (PFE -Free Pfizer Stock Report), Eli Lilly & Co. (LLY), GlaxoSmithKline (GSK), Watson Pharmaceuticals (WPI), and Teva Pharmaceutical (TEVA).

Second-Quarter Earnings Season

With several top drugmakers set to report earnings in the coming weeks, investors will be eager to see how branded companies like Bristol-Myers Squibb, Pfizer, and Eli Lilly are faring in the wake of increased generic competition in the marketplace. With Bristol-Myers recent patent loss on Plavix, Pfizer with Lipitor, and Eli Lilly with Zyprexa, we are projecting all three drugmakers to post year-over-year sales declines in the second quarter due to the generic erosion. Both Lilly and Bristol-Myers are scheduled to announce results July 24th, while Pfizer’s release is set for July 31st.

Growing Focus on China

With China quickly establishing itself as one of the world’s largest consumers of pharmaceuticals, drugmakers have been eager to pour money into the rapidly growing market in hopes profits will live up to the hype. Companies like Pfizer and GlaxoSmithKline have made major moves in recent years, shifting some of their resources away from developed economies and into China. Year-over-year comparisons in the region have been favorable thus far in 2012, with each posting double –digit gains during the first quarter, and preliminary results calling for similar growth in the June period, as well. As China looks to increase investment in healthcare services in the coming years, this should translate into some exciting growth opportunities for “Large Pharma” in 2012 and 2013.

Watson Receives Approval For Plan B One-Step

On July 13th, management at the leading generic drugmaker announced it received FDA approval for Next Choice One Dose, the generic equivalent to Teva Pharmaceutical’s Plan B One-Step product. The drug contains progestin and is used as an emergency contraceptive to prevent pregnancy following sexual intercourse, also known as the “morning after pill”. Total U.S. sales for Plan B One-Step were nearing $100 million for the 12 months ending May 31, 2012. Management at Watson indicated the company plans to launch the product immediately.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.