Will This Top Dow Health-Care Stock Stay Healthy in 2014?

The Dow Jones Industrial Average has left investors anything but disappointed this year, as the blue-chip index has gained more than 22% year to date. Pfizer's been one of the Dow's better surprises in 2013, outpacing the index's gains with a year-to-date jump of more than 27%. The gains have come despite Pfizer's wrangling with the patent cliff that has slammed the company's and pharmaceutical industry's sales. This stock's also managed to beat the performances of many of its top competitors, such as lead U.S. rival and fellow Dow component Merck .

But can Pfizer repeat its impressive performance in 2014? While the company will need to address new challenges, Pfizer's facing a great opportunity to capitalize in a big way for investors.

Beating back the patent cliff
Fortunately, Pfizer won't experience the same sort of patent cliff drop-off that has slammed the company and so many of its rivals this year. The loss of patent protection on cholesterol-fighting drug Lipitor, formerly Pfizer's top seller and once one of the best-selling drugs in the world, has hit the company's revenue hard. Lipitor has lost around 50% of its sales year over year through the first nine months of 2013, responsible for nearly $1.7 billion in lost revenue for Pfizer.

It's much the same story that has played out around big pharma. Like Pfizer, rival Merck has seen sales fall behind the loss of patent expiration on one of its own former top sellers, Singulair. From comparable sales to Lipitor through the first nine months of 2012, Merck's Singulair lost almost 75% of its total sales year over year through the first nine months of 2013.

Don't expect such a drastic drop for Pfizer's existing leaders next year. However, Pfizer will need to keep current leading seller Lyrica's torrid pace up. Lyrica, a neurological and pain therapy, has picked up sales growth of 10% through the year's first nine months despite already selling more than $3.3 billion worth of revenue through that time. That's fantastic growth for such a strong-selling drug, and similar gains next year would do wonders for investors. Lyrica kept growing at a strong pace in the third quarter, and there's no reason why this drug can't continue surging in 2014 as Pfizer's No. 1 option.

However, what investors really need to keep an eye on is Pfizer's young, up-and-coming products, particularly newly approved blood thinner Eliquis and rheumatoid arthritis treatment Xeljanz.

Eliquis has gotten off to a slow start in 2013 after winning FDA approval in the waning days of last year. The drug, which Pfizer co-developed with Bristol-Myers Squibb , hasn't garnered much in the way of revenue this year, but peak sales estimates remain rosy. Analysts project that the drug could garner anywhere from $3 billion to $5 billion in peak sales down the road, but don't expect that all to show up in 2014.

Gearing up for Eliquis and Xeljanz
Pfizer will have to split sales with Bristol-Myers Squibb anyway, but the drug should still be a big hit for both of these dominant American pharmaceutical powerhouses that are looking to beef up revenue in the wake of the patent cliff. However, according to Bloomberg, analysts have lowered sales estimates in the near term for Eliquis, with average projections estimating that the drug could see peak sales of more than $600 million by 2016. That's not bad, but it's not the kind of revenue power investors wanted. Eliquis may be a drug that will take more time to get its engines going for Pfizer and Bristol-Myers.

Xeljanz looks like it may not impress in 2014, either. The drug, like Eliquis, has gotten off to a slow start for Pfizer in 2013, and while it's garnered peak sales estimates of up to $3 billion, Xeljanz likely will keep gathering steam in the new year.

In the long run, however, keep an eye on how Pfizer's pipeline develops in 2014. The company boasts a massive developmental backlog, with 26 drug projects in phase 3 trials or under regulatory review as of November 8. If Pfizer can continue to move its pipeline along and not suffer any serious setbacks -- and it's not looking as if it will disappoint -- then this company's pipeline will begin to separate it from several of its top rivals, such as Merck and its lackluster pipeline that has drawn criticism to its R&D unit recently.

Looking for the long term in 2014
Overall, 2014 will be a year when Pfizer looks to bounce back from the patent cliff behind top sellers like Lyrica and Enbrel. If these leading drugs on the market can continue to gain despite already-lofty sales, investors won't be displeased with Pfizer's performance, even if the stock can't measure up to this year's incredible market rally.

Keep an eye on the long term, however. Between Pfizer's huge pipeline and growing potential blockbusters like Eliquis and Xeljanz, 2014 could see the beginning of big things for Pfizer's future.

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The article Will This Top Dow Health-Care Stock Stay Healthy in 2014? originally appeared on Fool.com.

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