More and more, there are signs that the capital markets are finding equilibrium. For example, Pfizer Inc. (NYSE: PFE) was able to raise $13.5 billion in debt financing this week. The structure was a five-part issue of notes.

Of course, Pfizer needs the cash to pull off its $64.2 billion acquisition of Wyeth (NYSE: WYE).

"The silver lining to the market decline is that some of our favorite stocks have fallen into 'buy' territory," says Nilus Mattive. In his Dividend Superstars he eyes one favorite, Pfizer (NYSE: PFE).

"Pfizer is now trading well below my suggested entry price of $16. In fact, it's back at levels last seen in 1996! The major catalyst for this sharp decline was Pfizer's decision to halve its dividend.

"That came on January 27, just two months after the company said it would simply leave the payment flat this year (which was already the first failure to raise in 42 years).

TheStreet.com's Jim Cramer says it's a quick way to ensure growth in the face of generics competition.

Pfizer's (NYSE: PFE) (Cramer's Take) moves suddenly make sense. You lay off your scientists, you buy the better group at Wyeth (NYSE: WYE) (Cramer's Take) , you get Wyeth's franchise and you slash the sales budget, and voila, you have growth.

That's the greatness of the pharma industry. You need mergers, especially when Obama has made it clear that he's not going to be in the camp of stifling generic competition, of which Pfizer faces the brunt of.

It is why I recommended Forest Labs (NYSE: FRX) (Cramer's Take) last night -- believe me, that's the cheapest. I own Bristol-Myers (NYSE: BMY) (Cramer's Take) because BMY looks like Wyeth with a bigger dividend and a great cancer franchise.

Celgene (NASDAQ: CELG) (Cramer's Take) too -- Celgene was approached not that long ago when it was much higher. CELG's another way to replenish.

Although analysts appear reserved in their sentiment, insiders appear quite positive in regard to the future of ZymoGenetics Inc. (NASDAQ: ZGEN). However, short interest in the company has been increasing and is running at approximately 18% of float. The company is currently engaged in marketing it's protein based treatment for stopping blood loss during surgery. It faces entrenched competition in that field.

I myself would have no desire to short this stock right now, even though its level of return stinks to high heaven. The major impetus behind why I think short sellers are in essence shorting themselves is multifaceted. First, ZymoGenetics reported 2007 increases in sales and gross profits, even as the company made clear that it is years from profitability. Second, as reported by Forbes, New York-based private equity firm, Warburg Pincus has increased its stake in ZymoGenetics and is considering a request for greater presence on the board. Third, and finally, I simply think that ZymoGenetics shares are at their natural bottom. To me, the indications I get from the company's share movements of late have all the earmarks of a classic Wall Street tug of war.

I'd be tempted to jump in on this stock right now myself, but only with long term intent and only with a gambler's share. Press clips give me the impression that the company's team knows what it's doing on the pharmaceutical side. The basic financial numbers, however, indicate to me that the company needs some modest cleaning up in that regard.

ZymoGenetics stock is currently trading within the very bottom of its previous five year range. Analysts are positive but quietly reserved on this stock. Analyst consensus is a firm hold.

Gary Sattler is a freelance blogger with no stock picking credentials. He does not knowingly hold interest in the companies mentioned in this blog post.

The National Institutes for Health has announced the partial suspension of a diabetes treatment study which was focusing on aggressive measures to reduce blood sugar levels. An article in The Wall Street Journal indicates that the aggressive strategy being used apparently resulted in a small increase in the number of patient deaths as compared to a moderate treatment approach being used on other patients who were involved in the study. The increase was merely three deaths per 1000 patients, yet researchers are unable to correlate the exact reasons for the increase in deaths and therefore the more aggressive portion of the testing has been terminated.

The study did not focus on specific treatments. Rather, researchers were attempting to determine the importance of differing treatment strategies. John Buse, president for medicine and science at the American Diabetes Association stated, "We were basically trying to see if we should have a full-court press on blood sugar or just try to do a reasonable job." The study, which is named Accord, involves providing diabetic patients with various drugs in an effort to reduce blood sugar levels and is also seeking to isolate particularly beneficial bio-markers for monitoring diabetic patient health.

TheStreet.com's Jim Cramer says the overreaction to pharma news lets you into the best names on the cheap.

There are so many crazy mistakes being made by this market that you have to keep your eyes open every minute. The biggest-cap stocks are acting like small-cap stocks.

Which brings me to Merck (NYSE: MRK) (Cramer's Take). This morning, Merck traded down to $47 off some deaths from maybe one of the most important inventions of all time, Gardasil, the anti-cancer vaccine.

Three bucks! How can that be! This vaccine's not going off the market. When you put this on top of how Schering-Plough (NYSE: SGP) (Cramer's Take) got cut in half because of fears that a drug will be pulled that represents 50% of its earnings (after the Organon merger, that's my estimate), you can see how extremist the market has become. Both Merck and Schering act like there will be no Vytorin sales at all next year at this time.

There is an unbelievable story in The New York Times today about the pharmaceutical industry. It appears that the companies marketing drugs like Prozac and Paxil have been lax in reporting results of studies of their anti-depressant drugs.

NYTimes.com is reporting that one-third of all studies conducted by firms such as Eli Lilly (NYSE: LLY), Pfizer (NYSE: PFE) and Wyeth (NYSE: WYE) go unpublished.

Citing a new report in the New England Journal of Medicine, the article reports that "about 60 percent of people taking the drugs report significant relief from depression, compared with roughly 40 percent of those on placebo pills. But when the less positive, unpublished trials are included, the advantage shrinks: the drugs outperform placebos, but by a modest margin."

There is a great quote about the impact of this new study written by Dr. Jeffrey M. Drazen, the editor in chief of the New England Journal of Medicine:

Salix (NASDAQ: SLXP) has announced it will launch a generic version of its Colazal (treatment for ulcerative colitis) with Watson Pharma (NYSE: WPI). Mylan (NYSE: MYL), Apotex, and Roxane have received FDA clearance to market their own generic versions of SLXP's Colazal.

SLXP is recently down $1.01 to $8.00 in pre-open trading. Wachovia says, "Valuation range: $9 to $10."

SLXP January option implied volatility of 104 is above its 26-week average of 72 according to Track Data, suggesting larger risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Teva Pharmaceuticals (NASDAQ: TEVA) raised its guidance for '07 after Teva launched a generic version of Wyeth (NYSE: WYE) Protonix over the weekend, to the apparent surprise of Wyeth management. It's clear that Teva must have started shipping the drug, and that's why it is raising guidance. Goldman Sachs analyst Randall Stanicky reaffirmed a "Buy" rating on Teva, saying the launch was unsurprising and the company has likely already shipped a decent amount of the generic drug to pharmacies.

This is just the latest in a long line of setbacks for big pharma, as generics continue to scoop up market share of drugs that come off patent. Teva, as the world's leading generic company, continues to grow and has a great pipeline for '08, and as a result the stock should continue climbing as well.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has a position in TEVA and is long the stock. Writer has no position in any other stock mentioned as of 12/24/07.

Pfizer (NYSE: PFE) is facing a number of lawsuits that say its painkiller Celebrex can cause heart attacks. Yesterday, a court threw some of those cases out. The Wall Street Journal wrote "U.S. District Judge Charles R. Breyer of San Francisco ruled that plaintiffs in the litigation haven't presented scientifically reliable evidence that Celebrex caused heart attacks or strokes when taken at a daily dosage of 200 milligrams." Pfizer says that the 200 milligram dose is the one most commonly given.

The cases involving Celebrex include over 3,000 plantiffs, and some are suing about effects of the drug at a higher dose, but the ruling is still a considerable relief for the big pharma company.

Like most drug liability cases, this one hinges on whether Pfizer knew that there were risks that the drug could cause significant problems beyond those disclosed on the labels. In that case, the amount of the dose would seem to be academic, especially for anyone who became sick.

But the court may have more wisdom than Wall Street and some plaintiffs will go unrewarded. As the tobacco companies proved two decades ago, suing big business rarely yields much reward.

Douglas A. McIntyre is an editor at 247wallst.com.

Celgene (NASDAQ: CELG), a quickly-growing biotech firm focused on technologies to treat cancer and immune-inflammatory-related diseases, announced today that the company is acquiring Pharmion Corp. (NASDAQ: PHRM) for a tad under $3 billion. Celgene markets proprietary thalidomide-based drugs for blood cancers. The acquisition of Pharmion gives Celgene a leukemia treatment that helped patients live longer in a study.

Pharmion holders will get $72 a share, 46% higher than Pharmion's most recent closing stock price of $49.28 on November 16.

This deal is being warmly received on Wall Street. While expensive, "there are few deals that make as much business sense and add as many operating synergies in the biotechnology space," according to a report from Bank of America. "With the acquisition, Celgene is increasing the depth of its pipeline which we believe was required for the next leg of growth. Celgene is acquiring a pipeline including Vidaza, a potential best in class therapy for Myelodysplastic syndromes (MDS)."

Celgene is a quickly-growing biotechnology firm that is now shoring up its pipeline with a new therapy with lots of potential. Mr. Mad Money himself has publicly supported Celgene. You can see what BloggingStocks had to say about Cramer's interview with Celgene COO back earlier this year.

Speaking at the Reuters Health Summit today, the U.S. head of Israeli generic drug manufacturer, Teva Pharmaceutical (NASDAQ: TEVA), said he could see its U.S. generic-drug market share balloon to more than 30% in the next five years.

Teva currently is the generic market leader with 20% market share. CEO of Teva North America, George Barrett, said that Teva has about 150 generic drugs awaiting U.S. approval that are versions of brand-name medicines worth a total of about $90 billion in annual sales.

Teva is looking for growth via acquisitions as well as organically. In spite of intense competition, Teva has established a tremendous pipeline of generics. BloggingStocks' Aaron Katsman wrote recently about the progress of Teva's clinical trial for an oral MS drug.

Most world health systems are looking to take cost out of the medical system and generics do just that. Teva has a strong history of drug development, regulatory experience, and marketing/distribution prowess. Through its pipeline and with new acquisitions on the horizon, the future looks good for Teva.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author's fund holds a position in TEVA as of 11/15/2007.

TEVA Pharmaceutical (NASDAQ: TEVA), the world's biggest generic drugmaker, reported that third-quarter net income fell to $525 million, or 64 cents a share, from $606 million, or 74 cents, in the year-earlier period. Sales reached $2.37 billion from $2.29 billion. Consensus estimates of 63 cents of profit on sales of $2.41 billion was expected. While TEVA was a bit light on the revenue line, it beat by a penny on EPS, in large part due to stronger than expected margins.

With a very strong pipeline, and expanding margins, TEVA continues to be the leading large pharma play out there. The stock is trading down today for two reasons. Up more than 50% year to date, the stock was priced for a blowout earnings report, which we didn't get. More importantly, CFO Dan Suesskind announced his retirement. In the company for over 30 years, he is the face of the company to investors, and his departure leaves many nervous. Hi replacement, current Checkpoint (NASDAQ: CHKP) CFO, Eyal Desheh, is no slouch. He knows TEVA well, having worked there for six years and as CFO of a NASDAQ 100 high-tech company, he is well-known on the Street.

For those looking for a long-term pharma play, consider buying TEVA on any weakness.

Disclosure: Author holds both TEVA and CHKP as of 10/30/07.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com.

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In one of the worst moves by a large pharma company in recent memory, Pfizer Inc. (NYSE: PFE) is tying up with doctor social network Sermo. According to The Wall Street Journal, "Pfizer-affiliated doctors will be able to talk candidly with the site's 31,000 members, potentially giving the company insights into prescribing patterns and a way to show doctors data on its drugs."

The paper points out that there is some risk in the move because the FDA and other federal agencies watch drug company communications with doctors very carefully. But Pfizer has cut its sales force and the internet may be a way for the company to do some not so subtle marketing.

The part of the plan that is really flawed is that Sermo could become a platform for groups of doctors to mount powerful criticisms of Pfizer drugs or offer clinical evidence that pending or current drugs may represent unacceptable risks to patients. In other words, the social network could undo as many sales as it makes for the big drug company.

It is Pandora's Box that Pfizer will wish it has not opened.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Two down-and-out pharmaceutical stocks deserve some attention, according to Dreman Asset Management's Cliff Hoover, the heir apparent to the firm's founder David Dreman.

In Barron's portfolio manager interview [subscription] this weekend, Hoover mentioned Amgen Inc. (NASDAQ: AMGN) is transforming itself into a Big Pharma company. Amgen should be able to grow 8% to 10% per year and its R&D is double that of other Big Pharma companies. However, the stock has gotten hit due to anticipated slower growth and concerns that its anti-anemia drug reimbursement rates may be somewhat restricted by Medicare. However, the company has five years before biogenerics could come to market and by then the company should be able to bring some quality new products to market with its massive R&D budget.

Hoover also likes Pfizer Inc. (NYSE: PFE) with his argument being not too different than his bullish stance on Amgen -- the company is cheap and should be able to come up with new drugs with its massive R&D budget. However, many of it big blockbuster drugs are just coming off patent.

Hoover has a price target of $34 for Pfizer up from $27 currently, not a bad return. His target on Amgen is $70 versus its $54 trading price. Dreman Asset Management has an excellent track record at picking up big-name companies when their businesses are in dire straits. These two stocks are having a difficult time but could make some good money on a turn around.