Investors in pharmaceutical companies need to keep a sharp eye on happenings in the sector. First, the major players in this space are losing patent protection on some of their  best-selling blockbuster drugs. Generic competition can devastate a pharma company's top line, and investors need to closely track upcoming patent expirations. Second, pharma companies must have a robust pipeline of late-stage drugs that can potentially make huge profits once approved. Finally, this sector is rife with mergers and acquisitions, and investors might profit from companies making savvy purchases or smaller acquisition targets.

Bristol-Myers Squibb (NYS: BMY) is just one of the major pharma players facing challenges from the patent expiration of a leading drug.  It is expanding its pipeline through R&D and the recent acquisition of Amylin Pharmaceuticals (NAS: AMLN.DL) . Arena Pharmaceuticals (NAS: ARNA) was also back in the news after speculation emerged that it could be acquired. Also, pharma giant Pfizer (NYS: PFE) is re-focusing its business and looks to have a strong long-term strategy. 

When it comes to do-or-die businesses, the biotech industry takes the cake. Arena Pharmaceuticals is one recent success story in the industry after gaining FDA approval for its innovative obesity drug. While the future looks bright for Arena, there are still plenty of obstacles ahead. In our brand-new premium research report on Arena Pharmaceuticals, we walk investors through the must know opportunities and threats facing the company. Since key news can develop quickly, we're also including a full year of updates for those who sign up. Click here now to learn more.

The article 3 Things to Watch in the Pharmaceutical Sector Right Now originally appeared on Fool.com.

Mark Reeth and Max Macaluso have no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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