This company develops humanized antibodies to treat a variety of diseases, markets several of its own products, and also licenses its technology to other biotech and pharmaceutical firms. Products such as Cardene (calcium channel blocker for angina and hypertension) and Busulfex (for treatment of leukemia) , royalties on sales of growth products including Avastin (colo-rectal cancer) and Lucentis (macular degeneration) marketed by Genentech; and a promising emerging pipeline that includes nuvion (ulcerative colitis), currently in Phase II/III for 2007; and ularitide (hypertension), will be the growth drivers of the shares.

ImClone operates in the highly competitive oncology market.They develop, manufacture and market monoclonal antibodies for the treatment of solid tumor cancers. Both Genentech's Avastin and Amgen's Vectibix compete directly with the company's Erbitux. IMCL shares got a boost recently when Amgen halted its Phase IIIb Vectibix combination study in colorectal cancer, because data suggested reduced survival rates and higher toxicity. Expect this news to help ease Erbitux pricing pressures and help reverse IMCL's marketshare losses to Vectibix.

This emerging pharmaceutical company focuses on identifying, developing, and upon approval, commercializing existing approved drugs and drug candidates for new indications by partnering with large pharmas.

CBST is a leader among biotech companies whose primary focus is the development of new antibiotics. The company licensed Cubicin (daptomycin) from Lilly in late 1997 and received FDA approval for Cubicin in the U.S. during September of 2003, for the treatment of complicated skin and skin structure infections and bacteremia/endocarditis in 2006. Cubist has sole commercial responsibility in the U.S. and is partnered with Novartis outside the U.S. CBST expects to initiate two important new trials of Cubicin including one trial using a high-dose and short-duration regimen in skin infections (Q1:07) and a second in osteomyelitis (Q2:07). These trials could further differentiate Cubicin from the competition and support important growth drivers in the long term.

This is a multi-year story. GILD is one of the few biotech companies that shows consistent growth, usually beating Street estimates. Gilead has steadily gained share in U.S. HIV market with the launch of Atripla and the sustained market presence of Truvada. In Q1:07, Gilead achieved sustained market leadership, surpassing GlaxoSmithKline in total number of prescriptions. Expect continued steady growth in market share. There are really no potential competitive threats to Gilead in development. The market share gains driven first by Truvada and then by Atripla are being replicated in markets around the world and will be enhanced when Atripla becomes available outside of the U.S., likely later this year.

The company is focused on the discovery, development, and marketing of products to treat cancer and inflammatory diseases. The company's key products are Thalomid (thalidomide) - which is used to treat leprosy, myelodysplastic syndromes (MDS), and multiple myeloma - and Revlimid, which is also approved for the treatment of MDS and multiple myeloma. The company distributes Alkeran (for treatment of ovarian cancer and multiple myeloma) through an agreement with GlaxoSmithKline. Celgene also receives royalties for the ADHD drugs Focalin XR and Ritalin through a licensing agreement with Novartis. Revlimid is also being studied for the treatment of other cancers. Beyond Revlimid, the company has a promising pipeline, though most products are in the early stages of development (Phase I and II). In the near term, the stock is likely to trade on news related to Revlimid, particularly the other uses of the product in the U.S., and its possible approval in Europe in early 2007.

WYE has the potential to rank among the top earnings performers in the drug sector. In addition, WYE has made significant progress in resolving the fen-fen diet drug liabilities. At present levels, the stock is attractively valued relative to its peer group. Growth drivers are Prevnar (pediatric vaccine for pneumonia), and Enbrel, (an anti-inflammatory agent for arthritis). Both products will continue to benefit from strong consumer demand, increased manufacturing capacity, and greater penetration of foreign markets. They continue to have a strong product line with Effexor (anti-depressant), Protonix (acid reflux disease), and Premarin (hormonal therapy - estrogen). The current work with experimental drugs for a cure for Alzheimers may eventually pay off big for the company.

Large pharma staple. Attractive valuation and nice dividend.