The Zacks Analyst Blog Highlights:Royal Dutch Shell, Bayer, Pfizer, Eli Lilly and Alexion Pharmaceuticals

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Mar 18, 2014, 09:30 ET

CHICAGO, March 18, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Royal Dutch Shell plc (NYSE:RDS.A-Free Report), Bayer (OTC:BAYRY-Free Report), Pfizer Inc. (NYSE:PFE-Free Report), Eli Lilly and Co. (NYSE:LLY-Free Report) and Alexion Pharmaceuticals, Inc. (Nasdaq:ALXN-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Shell to Cut Outlays in the Americas

On Mar 13, 2014, Europe's largest oil company, Royal Dutch Shell plc (NYSE:RDS.A-Free Report) revealed its decision to slash its capital investment this year in upstream activities in the Americas. Shell is expected to lower the spending by 20% from the amount invested in 2013, as the company has been incurring losses in the North American shale resource plays.

In an attempt to rebalance its portfolio, Shell is diverting capital toward exploration activities in liquids-rich shale resources and tight gas acreages. The company adopted this strategy to strengthen its financial position and earn considerable cash flow for the shareholders in the years to come.

Moreover, Shell is planning to divide its downstream portfolio into distinctive performance segments and allocate capital accordingly to maximize profits. Downstream portfolio comprises operations related to chemicals, lubricants, biofuels, refining and fuels marketing. While Shell's chemical, lubricant and biofuel businesses are generating significant profits, its refining and fuel marketing operations are not faring well.

Shell is one of the largest integrated energy firms in the world with a large and diversified portfolio of development projects that offer attractive long-term opportunities. However, Shell's relatively heavy downstream exposure leaves it less diversified than its integrated peers.

Shell currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Update on Bayer's Adempas

Bayer's (OTC:BAYRY-Free Report) HealthCare segment has been performing very well with the addition of products like Xarelto (anticoagulant), Eylea (eye drug), Stivarga (oncology), Xofigo (oncology) and Adempas (pulmonary hypertension) to its portfolio. Bayer has projected annual peak sales of €7.5 million from these drugs. The new products are expected to contribute around €2.8 billion to segmental sales in 2014. The company is also looking to expand their label beyond current indications.

Last week, Bayer initiated the phase IIIb RESPITE (Riociguat clinical Effects Studied in Patients with Insufficient Treatment response to PDE-5 inhibitors) study on Adempas (riociguat). The study is evaluating the clinical effects of Adempas in patients suffering from pulmonary arterial hypertension (PAH). These patients demonstrated an insufficient response to treatment with phosphodiesterase-5 inhibitors (PDE-5i) either as monotherapy or in combination with an endothelin receptor antagonist (ERA).

The study will evaluate patients who were previously treated with either Pfizer Inc.'s (NYSE:PFE-Free Report) Viagra (sildenafil) or Eli Lilly and Co.'s (NYSE:LLY-Free Report) Cialis (tadalafil) for a minimum of three months.

We note that Adempas is approved in the U.S. for the treatment of adults suffering from persistent/recurrent chronic thromboembolic pulmonary hypertension (CTEPH) following surgical treatment or inoperable CTEPH to improve exercise capacity and WHO functional class. The drug is also approved in the U.S. for the treatment of adults suffering from PAH to improve exercise capacity, improve WHO functional as well as delay clinical worsening.

The drug is approved in Canada for both the above-mentioned indications and in Switzerland and Japan for CTEPH. Moreover, Adempas is under review in the EU with a final decision expected by Jun 30, 2014. In January this year the European Committee for Medicinal Products for Human Use provided a positive opinion on the approval of Adempas for both the indications.

We are encouraged by the performance of Bayer's newly launched pharmaceutical products. Label expansions of these drugs will boost segmental sales further.

Bayer presently carries a Zacks Rank #4 (Sell). Some better-ranked stocks include Alexion Pharmaceuticals, Inc. (Nasdaq:ALXN-Free Report) carrying a Zacks Rank #1 (Strong Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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