Silver lining to Big Pharma's cloud?

Some people see the Big Pharma glass as half-full instead of the alternative. In an investor's-eye look at the industry, Kiplinger ticks off the usual criticisms: patent expirations, tough generics competitors, skyrocketing R&D costs, picky regulators, and election-year political pitfalls. But it also says that beaten-down pharma stocks are so cheap, for some there's no way to go but up.

Institutional investors tell the magazine that "gloomy" Pfizer can only get better, that Johnson & Johnson has consumer healthcare and devices as hedges, and that Schering-Plough is dirt cheap and, given its comparative lack of copycat exposure, poised to rise. The whole sector has several forces pulling in its favor, too. Strong cash flow that could be even stronger if they'd cut unproductive R&D, there are the undeniable demographics of the baby boom, and Big Pharma possesses the kind of marketing muscle that smaller drugmakers will pay dearly for. Not to mention the propensity for pulling rabbits from empty hats: "It always seems like they have nothing in the pipeline...Then they always come up with something."

- read the Kiplinger article