Comparing Two Biotech Rivals

 | Oct 01, 2013 | 12:38 PM EDT  | Comments
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Stock quotes in this article:

celg

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mrk

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ed

Celgene (CELG) vs. Merck (MRK) -- they are crosstown rivals. One's always innovating, putting money to work in a variety of biotechs, buying when the time is right. It's always going for the blockbuster, trying to press, press, press.

The other one is trying to cut its way to success by firing, trimming and hoping to eke out money while its new product flow fails to ignite or just fails. It's unoriginal and staid -- just trying to pay that dividend.

The first is obviously Celgene, and the second is Merck, which managed to pop its stock with an announcement that is laying off a bunch of people. It's a second reduction in force for this obviously bloated company.

But the first used to be Merck. It used to be the ultimate in original thinking and new products. Not anymore. Even its acquisition of the gigantic Schering-Plough in 2009 seems to have gotten it nothing significant that I can see. I had hoped that at least the company would follow in the footsteps of Pfizer (PFE) and spin off animal health, but I guess that's even too radical.

Either way, I think that Merck's a sale, not a buy. The market wants growth and new drugs. If it wants yield, it can get it from Con Ed (ED). Disappointing, again.

Random musings: I do hope to see you over at the NYSE after the closing bell where we will do our 2,000th "Mad Money" show! 

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