Yesterday, pharmaceutical giant Johnson & Johnson (JNJ) said that its patent infringement lawsuit against Abbott Labs (ABT) was successful, with Abbott ordered to pay $1.67 billion because its best-selling drug, Humira, too closely resembles J&J's Remicade. The drugs are intended to treat rheumatoid arthritis by blocking a substance known as TNF, which causes inflammation. According to the Arthritis Foundation, 1.3 million Americans suffer from rheumatoid arthritis, a chronic disease. Abbott Labs sponsors the group's programs specifically related to rheumatoid arthritis.

The verdict leaves Abbott stock in a tenuous position. The healthcare sector has been in the crosshairs lately as concerns about costly medical reform swirl, with the SPDR S&P Pharmaceuticals (XPH) ETF down slightly year-to-date, compared to the nearly 5% gain on the S&P 500. Abbott Labs has underperformed both comparables, and is down 10% year-to-date.

Billions of investment dollars are sitting on the sidelines for fear of entering the market at the wrong time and losing more money after taking a bath last year. However, the market seems to have hit bottom last March and many investors missed the 40% gain from that point to now.

Market prognosticators are spewing out opinions faster than the public can grasp, or understand. I choose to stick with basic fundamental value propositions and ignore the noise.

I have been buying for the past eight months and riding the market waves, good and bad, to huge gains -- so far. Maybe I will be giving some back, maybe not, but I have also been encouraging readers to take something off the table, in several recent posts.

Bit by bit, the IPO market is picking up steam. And, the latest deal hit the markets today: Medidata (NASDAQ: MDSO).

So far, the shares are up 19% $16.70 (the IPO priced at $14, which was above its $11-$13 price range).

Founded about ten years ago, Medidata develops web-based software for clinical trials management. Obviously, it's a big market opportunity.

Keep in mind that a drug costs more than $1 billion to develop. Oh, and the process can easily go beyond a decade. In other words, it's important to streamline the process.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models, who have a competitive advantage in established markets, preferably with a favorable, global trend as a support. And with that in mind, Johnson & Johnson (NYSE: JNJ) is worth a review.

The value proposition with Johnson & Johnson 'isn't rocket science,' as they say, even though the business model (obviously) involves a considerable amount of science.

Procter & Gamble (NYSE: PG) might not have the best growth rates going these days, but truth be told, I thought the company's Q3 report was acceptable given everything that is going on.

Yes, sales declined by 8%, driven by currency effects. Organic sales, however, increased 1%. Earnings per share increased 2% to 84 cents. This beat Wall Street forecasts by four pennies according to this source.

"Health-care stocks have been volatile of late, as the prospects for significant healthcare reform are impacting the group," notes Chuck Carlson.

In The DRIP Investor, he explains, "Johnson & Johnson (NYSE: JNJ) has not been immune to the weakness. And while these shares could remain under pressure in the short run, the company's prospects are significantly brighter than the typical health-care stock."

"First, Johnson & Johnson's diversified business portfolio, which includes pharmaceuticals, medical technology, and consumer products, should help to smooth out results and cushion declines in any one area.

Pfizer (NYSE: PFE), a pharmaceutical entity whose colleagues include Merck (NYSE: MRK), Novartis (NYSE: NVS), and Johnson & Johnson (NYSE: JNJ), will be reporting first-quarter earnings Tuesday. As one has come to expect, the market believes that the company will be experiencing a decline in bottom-line income. The call is for 49 cents per share versus 61 cents per share in the year-ago period.

That's a drop of 20%. That might not sound so hot, but the good news is that Pfizer has a solid recent track record when it comes to beating earnings expectations. So shareholders might be justified in feeling confident about that aspect of the game.

3M (NYSE: MMM) had a not-that-great first quarter. The declines were significant and ugly. First, net sales plunged over 20%. Second, net income on an adjusted basis likewise spiraled out of control, declining over 40% to $0.81 per share. And no, that didn't meet expectations. Wall Street was looking for $0.86 per share. Sorry, gang.

You've got the dollar and the global recession to blame. Currency translations affected sales, and declines in economic activity didn't help much, either. Many people look to 3M as a staunch dividend play. As such, cash flow is important. Unfortunately, the statement of cash flows this quarter was hard to read. Net cash from operations decreased 30%, and free cash flow lost 35% of its value when compared to the year-ago period. Thankfully, there was enough free cash to cover the dividend.

Analyst upgrades:

• Citigroup upgraded Amazon.com (NASDAQ: AMZN) to Buy from Hold on expectations the company's top-line growth rate could be more sustainable than expected and its operating margins could recover given due to less retail discounting. The firm raised its price target on shares to $97 from $65.
  
• UBS upgraded King Pharmaceuticals (NYSE: KG) to Buy from Sell based on expectations that Sandoz will settle patent litigation regarding Skelaxin after last weeks settlement of Clarinex with Schering-Plough (SGP).
  
• Jefferies upgraded Reliance Steel (NYSE: RS) to Buy from Hold as it believes steel prices and demand are close to near-term bottoms. The firm raised its target on the stock to $44 from $25.
• Palm (NASDAQ: PALM) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Nestle (OTC: NSRGY) was lifted to Neutral from Underweight at JP Morgan.
• Johnson & Johnson (NYSE: JNJ) was upgraded at Wachovia to Outperform from Market Perform.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Abbott Laboratories (NYSE: ABT) Q1 profit edged past expectations despite lower sales of Humira.
• AMR Corp. (NYSE: AMR) posted a smaller-than-expected Q1 loss, sending shares sharply higher.
• Baxter International Inc. (NYSE: BAX) reported better-than-expected Q1 earnings, sending share higher.
• BP (NYSE: BP) and other oil companies were downgraded due to higher environmental costs.
• Charles Schwab Corp. (NASDAQ: SCHW) Q1 earnings declined but still topped analysts' expectations.
• Chevron Corp. (NYSE: CVX) said Q1 earnings would be lower due to a weaker dollar and lower oil prices.

When a $7 a share biotechnology company like Dendreon Corp. (NASDAQ: DNDN) rockets 200% to over $20 a share in one day, like it did yesterday after reporting successful Phase 3 trials of its prostate cancer drug, investors get interested in any biotech stock under $10.

But before investing in these speculative companies, you should have a clear understanding of how this niche operates. Marketing plays an important role in order for the companies to raise capital, therefore if you are interested in betting on a company's future, you should consider the risk factors and odds of success.

Health Care giant Johnson & Johnson (NYSE: JNJ) had its chance to impress Wall Street this morning with its first quarter earnings release, and the company indeed put up better than expected results, pushing shares higher in the premarket.

Analysts had been expecting the company to earn of $1.22 per share, but the company surpassed those estimates, with a reported $1.26 per share for its first quarter. First quarter earnings were also on par with the $1.22 it reported during the first quarter of 2008.

Alcoa Inc. (NYSE: AA) started off the new earnings season with disappointing results that helped to stifle the recent rally. Was that enough of a sign of what's to come? No, probably not. But the earnings reports start to fly in earnest this week, which should provide a more detailed picture of the state of things.

Analysts surveyed by Thomson Reuters anticipate that some of the biggest names will prove to be holding their own. Google Inc. (NASDAQ: GOOG) is expected to post a profit of $4.91 per share, marginally higher than a year ago, and Johnson & Johnson's (NYSE: JNJ) expected $1.22 per share profit is slightly lower year over year. Even Mattel Inc.'s (NYSE: MAT) estimated loss of $0.13 per share is the same as in the year-ago period.

Late yesterday, Johnson & Johnson (NYSE: JNJ) announced that it will eliminate roughly 900 jobs -- mainly from the company's Ortho-McNeil-Janssen Pharmaceuticals unit.

The move includes a mix of attrition along with hiring freezes, all of which are part of JNJ's plans to cut its U.S. sales force and try to refocus its market approach. These job cuts total roughly 6% of JNJ's entire pharmaceutical sales force.

Back in January, the Dow conglomerate predicted weaker 2009 results -- thanks to the current recession, unfavorable currency exchange rates, and increased competition from generic drug makers.

TheStreet.com's Jim Cramer says if you don't want to wait for a pullback, look abroad for the next leg or find values at home.

What do you do when everyone knows we have come up too far, too fast; no one knows who is actually buying; and we are going into earnings season?

What do you do when the animal spirits are taking up the market and yet other than a handful companies -- Research In Motion (NASDAQ: RIMM) (Cramer's Take), Xilinx (NASDAQ: XLNX) (Cramer's Take), Corning (NYSE: GLW) (Cramer's Take), Best Buy (NYSE: BBY) (Cramer's Take) and Taiwan Semi (NYSE: TSM) (Cramer's Take) -- almost all companies that have spoken during the "off-season" earnings reports have been dismal?