Pfizer (PFE)

[HenryTo]

A not-so flattering article on Chantix. Sanford Bernstein cuts its 2012 sales estimate of the drug from $1.6 billion to $900 million:

http://www.latimes.com/features/health/la-na-smokedrug25-2008may25,0,4540550.story

[idiotinc]

In case anyone is interested, here's a company memo sent from Pfizer's head of development that discusses in detail what drugs the company will be cutting research for, and which ones it will focus on. http://idiotinc.com/company-memos/pfizer-research-memo/

Here are the disease areas they intend to "exit" : Anemia, Atherosclerosis/Hyperlipidemia, Bone Health/Frailty, GI, Heart Failure, Liver Fibrosis, Muscle, Obesity, Osteoarthritis (disease modifying concepts only) and Peripheral Arterial Disease.
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[Suomodo]

I was also attracted by the yield and P/E of Pfizer, so I took a closer look. The major problem is they have nothing to replace Lipitor and Norvasc. All new drugs they introduced are far far away from blockbusters. (Actualy blockbuster drugs are dead for a foreseable future of 3-5 years IMHO.)

So when Lipitor patent finishes they go 25% down with sales immediately (its abut 1/3 of their sales if I remember it right) and when patent ends sales are typically 90% down of that drug in that particular year...

Pfizer was strong in Cardiology, but the potential in this area is almost fully filled nowadays.... Guidelines even today recomend 4-6 drugs for major diseases in this field.... you can hardly go higher with more drugs, you can hardly show in a study to be able to decrease mortality risk further down from 0,1%. And cardiologists are very expensive, spoiled by the past studies.. so its extremely expensive..

Neurology/psychiatry is not a big field these days...

So PFE is not a growth play.

Only thing they can do is go shopping... but 1) it is not that cheap to build a sales network in a completely new field...2) blockbuster is dead, so you have to buy dozens of molecules

[HenryTo]

PFE falls to a new 10-year low on this latest downgrade:
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Goldman Sachs downgrades Pfizer to neutral
Thu Jun 5, 2008 9:44am EDT

June 5 (Reuters) - Goldman Sachs downgraded Pfizer Inc (PFE.N: Quote, Profile, Research) and removed the world's biggest drug maker from its Americas conviction list, citing the stock's underperformance and said it does not expect near-term catalysts to drive valuation.

The brokerage, which cut its rating on Pfizer to "neutral" from "buy," said the company's share price has fallen 28.7 percent since Jan. 4, 2007, versus a 2.9 percent decline in the Standard & Poor's 500 Index and a 20.4 percent fall in its coverage universe.

Goldman said it cut its price target on Pfizer to $22 from $26 as near-term pipeline products decrease in value and recent safety issues pressure the brokerage's forecasts for the company's anti-smoking drug Chantix and cancer drug Sutent.

Researchers had recently said hundreds of patients taking Chantix reported serious accidents, vision problems and heart trouble, while some patients who took Sutent, a pill used to treat kidney and stomach cancers, developed heart failure.

Goldman added Eli Lilly and Co (LLY.N: Quote, Profile, Research) to the Americas conviction list and retained its "buy" rating on the stock. However, it lowered its price target on the stock by $2 to $58, reflecting multiple contraction in the sector.

The brokerage said it upgraded Schering-Plough Corp (SGP.N: Quote, Profile, Research) to "buy" from "neutral" as new pipeline additions have raised its risk-adjusted sales estimates. Goldman raised its price target on Wyeth (WYE.N: Quote, Profile, Research), which it rates "neutral," to $50 from $48. The brokerage cut its price targets on Merck & Co (MRK.N: Quote, Profile, Research) to $43 from $48 and on Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research) to $24.50 from $28, while keeping its "neutral" rating on both the stocks.