5 Things to Watch This Week in the Health-Care Sector

Updated

Even including this week's weak performance, the markets have had a very good 2012, and much of that has to do with the outperformance of the health-care sector. Can all facets of the health-care sector continue climbing to new highs? That answer could lie in what happens with regard to these five stories bound to make waves next week.

Cornerstone Therapeutics (NAS: CRTX) is the only company facing the firing squad next week in terms of rulings from the Food and Drug Administration. Cornerstone's drug, Lixivaptan, is designed to treat hyponatremia, a blood-sodium electrolyte imbalance often associated with heart failure and patients with certain types of hormone problems. As Foolish colleagues Brenton Flynn and David Williamson pointed out last week, Lixivaptan's efficacy failed to impress the FDA panel and was voted against unanimously as a treatment for heart-failure patients, and by a vote of 3 to 5 against for hormone-related patients. Although the FDA isn't required to follow the panel's advice, most investors have written Lixivaptan off completely in its PDUFA meeting on Monday .

The rest of the week is all about earnings, earnings, and more earnings! If you haven't noticed, we're in the heart of earnings season, and next week we get a good mix of earnings from Big Pharma, hospital operators, and health-care plan providers.


The kingpin of all big pharmaceutical names, Pfizer (NYS: PFE) , is set to report earnings on Tuesday, and investors have to be a little concerned with what to expect given the loss of two key drugs, Lipitor and Geodon, to patent expirations over the past year. What investors will want to watch is how Pfizer's new workhorse drugs, Lyrica for the treatment of fibromyalgia and Celebrex for osteoarthritis, perform. I wouldn't worry about international sales too much, as currency fluctuations will probably be a hindrance this quarter; however, I would look for the company to provide an update on the imminent spinoff of a minority stake in its animal-health business, Zoetis .

It'll definitely be a big week for hospital operators Universal Health Services (NYS: UHS) and Community Health Systems (NYS: CYH) , which are set to report on Monday and Tuesday, respectively. Normally, hospital earnings reports get shuffled to the back of most investors' radars, but a preliminary earnings warning from giant HCA Holdings two weeks ago has led some analysts to conclude that admissions may have slowed during the quarter. In a few days' time we're going to find out whether HCA's problems are confined to just it, or whether the industry as a whole is experiencing a slowdown .

Finally, you'll want to keep a close eye on health-plan services company CIGNA (NYS: CI) , which is set to report earnings on Thursday. Last week, Wall Street received a real shock when Aetnablew past expectations as it was able to successfully raise premiums while medical costs remained stable . CIGNA, and much of the health-care-plan sector, is priced very attractively, and any mention that premiums are up and medical costs are under control could send these plan providers markedly higher.

The other factor you have to watch
The U.S. presidential elections, which are just over two weeks away,are going to have wide-based implications on numerous sectors. Find out which four companies our analysts at Stock Advisor think could skyrocket following the presidential elections, as well as the reasoning behind those selections, for free, by clicking here to get your copy of this latest special report.

The article 5 Things to Watch This Week in the Health-Care Sector originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement