It is possibleFrom a pharmainsider1 on marketwatch.
Interesting read
Big Pharma has been in a recession for a few years. Many Research and Development and sales jobs have been cut. They are having problems developing new drugs. The "development cycle" is working against them as most of the blockbuster drugs they relied upon in the past are losing patent protection. There is not enough in the pipelines to replace them.
Additionally, they face the prospect of a Democratic Congress and a President Obama, who will try to nationalize the heathcare system.
Not a good environment for the intermediate term in Pharma.
But they are taking a page out of the book of the rest of the economy. They are moving jobs to China and India. There they can pay 1/4 the wages, take advantage of growing markets and reduce costs in the US (to prepare for drug price controls). Think China is bad at importing toys? Wait until they make all the drugs there. Baxter had problems/recalls of heparin made there recently. It is just the beginning.
"Investing" in the sector is more of a gamble. You can make money on smaller Biotech companies that happen to discover a new drug and/or are taken over by a large drug company. But, I would not be investing money in the standard Big Pharma stocks unless the PE was about 10 and all the major patent expirations were behind. For example, Pfizer trades at a forward PE of about 10, but they will lose 1/3 of their revenue when Lipitor losses patent protection in 2011. They don't appear to have anything in the pipeline to replace it. So, when evaluating the shares you need to realize the PE will not be 10, but rather much higher.
The article implies it is a good thing that Pharma will benefit from a weak dollar. Not exactly the kind of long-term business plan that makes for a good investment. I need to see increased revenues as they sell more product. And I need to see new Drugs to drive the revenue in the future