This article originally appeared on May 1, 2013 on Real Money. To read more content like this + see inside Jim Cramer's multi-million dollar portfolio for FREE. Click Here NOW. No matter how many times I say it, people don't seem to get it. The pharmaceutical business is not about near-term earnings estimates or earnings just reported, it's all about pipeline, what's in the works, what could be blockbuster. We are seeing all of that play out in today's trading. First, Merck ( MRK) reports a quarter that is widely panned and people decide that Merck's "had it." But Merck has 35 drugs in the pipe and many of these could add very much in the out years. That's why Merck's committed to buying $15 billion of its stock now, because management knows that it has some huge drugs that will be terrific in the future. So why not try buying back $15 billion dollars in stock, or 10% of the company in the interim? Why not give people a 3.75% yield to wait for the Phase II and Phase III drugs that will be powering the numbers when 10% of the company was bought in cheap. But then there's Allergan ( AGN) today. I had high hopes for its macular degeneration drug because Allergan has such a fabulous ophthalmological pipeline. But the drug's being delayed because right now the drug's results aren't up to snuff. So, the stock falls about 10%t. Meanwhile, this great news for Regeneron, which has the best current drug out there for macular degeneration and the competitive woes from a much more establishes company just vanished. That gives Regeneron more money to develop its pipeline, assuring you more growth in the future. It doesn't hurt, by the way, that Regeneron's stock was heavily shorted because it went into the S&P 500 last night, causing a spike that wiseguys thought would be given up today. Whoops, the pipeline of Allergan wrecked that trade. We've had some tremendous earnings disappointments from high-profile drug companies that simply ended up meaning nothing. Consider Lilly ( LLY). It didn't hit the number, but it sure held out hope for a valid drug to treat Alzheimer's. We didn't hear anything blowout about the pipelines of Pfizer ( PFE) and Bristol-Myers ( BMY), so those legitimately sold off. But Pfizer is committed to bringing out value in other ways, including splitting the company up, so the pipeline isn't as important as others. But Bristol seems to have a gap, so that stock's not bouncing.