Pfizer - zu Unrecht im Keller

Pfizer said that it will appeal the Austrian Patent Office's decision and is confident that it will, on appeal, be able to make a compelling argument in support of the patent. The patent will remain in force during the appeals process, which is expected to take about a year.

The more positive news for Pfizer came in the form of being awarded a preliminary injunction halting sales of a generic quinapril product marketed by Teva Pharmaceuticals USA Inc, Ranbaxy Pharmaceuticals, and Ranbaxy Laboratories. The ruling requires Teva and Ranbaxy to immediately withdraw the product, which contains the active ingredient in Pfizer's antihypertensive Accupril, in the US.

The court held that Pfizer was likely to prevail in its patent infringement suit filed on January 28, 2005 against Teva and Ranbaxy, and ordered the preliminary injunction to prevent further sales of the Teva-marketed product while Pfizer seeks a permanent injunction. The judge has also denied Ranbaxy's and Teva's request to stay the injunction.

As a result of the ruling, Pfizer will seek damages resulting from lost sales.  

News, dass Viagra in Einzelfällen zu Erblindung führen kann, kursierten bereits 2002. Nun wurden sie durch eine neue Studie (siehe unten) erhärtet. Ich glaube nicht, dass PFE nur DESHALB fällt - auch der Gesamtmarkt belastet.

Pfizer hatten sich in NY anfangs wacker gehalten, weil die Ergebnisse der Analystenkonferenz am 8.4.05, auf der die Massenentlassungen verkündet werden, langsam im Kurs vorweggenommen werden. Das könnte dann freilich zu einer "Sell-the-good-news"-Reaktion führen. Denn was alle bereits wissen, ist nichts wert, weil es spätestens zum Zeitpunkt der offiziellen Verkündung eingepreist sein sollte.

-------------------

Viagra macht sexhungrige Männer blind
Die Potenzpille kann zu einem Schlaganfall des Auges führen

Minnesota (pte/01.04.2005/07:50) - Die Einnahme von Viagra kann bei manchen Männern zu einem Zustand dauerhafter Erblindung führen. Denn durch die Einnahme des potenzsteigernden Medikaments kann es zu einem "Schlaganfall des Auges" - einem Nonarteric Ischemic Optic Neuropathy (NAION) - kommen. Zu diesem Ergebnis kommt ein Forscherteam der University of Minnesota www.umn.edu.

Das Krankheitsbild entsteht, wenn die Blutversorgung des Sehnervs unterbrochen wird und der empfindliche Nerv dadurch geschädigt wird. Dies kann in weiterer Folge zur Erblindung des Patienten führen. "Seit Jahren ist uns bekannt, dass manche Männer durch die Einnahme von Viagra kurzfristig eine getrübte Farbwahrnehmung haben und beispielsweise Dinge nur noch grün oder blau wahrnehmen", erklärte der Studienleiter Howard Pomeranz. "Der NAION ist jedoch ein viel gefährlicherer Zustand, denn er kann zu einem dauerhaften Verlust der Sehkraft führen", so der Experte.

Gefährdet sind vor allem ältere Männer zwischen 50 und 69 Jahren, die unter Arteriosklerose, Hypertonie, Diabetes oder Hypercholesterinämie leiden. Zudem ist das Risiko für einen NAION innerhalb der ersten 36 Stunden nach Einnahme des Medikaments am größten. Außerdem konnten die Forscher feststellen, dass die bisherigen Betroffenen vor dem Insult unter einer so genannten "low cup to disk ratio" gelitten haben. Darunter verstehen die Experten eine sehr enge Verbindung der Blutgefäße und Nerven an den schmalen Platz am hinteren Auge.

"Viagra reguliert eine Chemikalie im Körper, welche die Arterien verengt. Dieser Verengungsprozess kann die Blutversorgung zum Auge kappen - besonders bei Personen mit einer niedrigen low cup to disk ratio - und kann so zu einem NAION führen", resümierte der Experte. Die Forscher empfehlen auf Grund ihrer Ergebnisse bei der Verschreibung von Viagra auch immer die Gesundheit der Augen eines Patienten mit einzubeziehen, um ein mögliches NAION-Risiko zu unterbinden. Die Ergebnisse der Studie sind in der aktuellen Ausgabe des Journal of Neuro-ophthalmology www.jneuro-ophthalmology.com nachzulesen.

Some had speculated there would be major changes. After Pfizer disclosed in January that it was preparing a new business plan, Lehman Brothers analyst Tony Butler said that to save money and boost earnings Pfizer would lay off 30 percent of its sales force, now 38,000 people after its 2003 acquisition of Pharmacia. The challenges are formidable: Pfizer is slated to lose as much as $9 billion in revenue in the next four years when patents expire on some of its most lucrative drugs, including anti-depressant Zoloft, allergy medicine Zyrtec and blood pressure medicine Norvasc.

Company officials are providing no specifics about what chairman and CEO Hank McKinnell will say at the meeting, which will be dominated by CFO David Shedlarz and president of the Human Health division Karen Katen.

In an employee newsletter, Katen quoted McKinnell as saying, "you can't cost cut your way to success" to bolster her belief that "this is a much more fundamental, long-term cultural change initiative. We aim to behave differently, to operate differently."

Last year, Pfizer earned $11.36 billion or $2.12 a share. With a consensus estimate of $2.13, analysts surveyed by Thomson Financial expect no real earning growth at Pfizer this year, followed by an increase of 4.2 percent in 2006 and falling back to flat in 2007. That is below the industry average of 2.05 percent this year, 6.93 percent in 2006 and 7.37 percent in 2007.

Some analysts said they would be disappointed if Pfizer's earning outlook wasn't near the consensus estimate. Credit Suisse First Boston analyst Catherine Arnold said she would prefer the company take any charges associated with the strategic plan this year so growth resumed later. She predicts the company will earn $2.00 a share.

Pfizer is also struggling with sagging sales of its fourth biggest selling medicine, arthritis drug Celebrex, which brought it $3.3 billion in revenues last year. Like Merck & Co.'s Vioxx drug, Celebrex has been linked to an increase risk of heart attack and strokes. Analysts expect revenues in the range of $2 billion this year.

Some analysts note that $2 billion in cost-cutting is modest for a company that spends $17 billion a year on sales, informational and administration expenses and nearly $8 billion annually on research. But others insist massive reductions won't help sales and slashing research will hinder the company's ability to find new drugs. And firing sales staff may hurt revenues.

Deutsche Bank's Ryan believes investors will cut Pfizer some slack because of its still solid business and a management team with a history of making audacious , lucrative moves such as buying Warner-Lambert in 2000 and Pharmacia three years later.

Pfizer has $24.4 billion in cash and investments, funds Ryan said could be used to buy new products, smaller companies or be used to finance a major merger.

"This management is smart, tough and competitive," said Ryan. "There is a sense of urgency about the situation."

Napodano maintained that Pfizer needs a new product infusion because he doesn't think the pipeline will be enough to compensate for the patent losses and grow a company with $52.52 billion in revenues.

One sales representative who requested anonymity said that in January the company told them it was doing a detailed analysis of the sales force down to the zip code level to figure out if it was deploying its resources effectively. The sales representative said the company said there wouldn't be layoffs, but some employees might be asked to move.

Pfizer could also save money by reducing duplication. For example, the company has a corporate personnel division but some areas also have their own teams. In a company newsletter, CFO Shedlarz hinted that information technology could also be ripe for cost cutting.  

Pfizer has also been battling patent challenges to other blockbuster drugs -- notably Lipitor, its cholesterol-lowering medicine and top seller, Zoloft, an anti-depressant, and Viagra.

Last Tuesday, the company said it would appeal the Austrian Patent Office's decision to invalidate the patent on Lipitor, which racked up $10.9 billion in sales last year.

On Wednesday, a federal judge in Los Angeles forced Israeli firm Teva Pharmaceuticals (Research) and Indian firm Ranbaxy Laboratories (Research) to stop selling generic versions of Accupril, a blood pressure treatment with $665 million in 2004 sales.

In January, a federal judge threw out Teva's lawsuit challenging the patent on Zoloft, which brought in $3.4 billion for Pfizer last year. And last year, the Chinese government overturned the patent on Viagra -- a decision Pfizer has appealed.
Analysts are curious

Pfizer may address some of these issues when it meets with industry analysts Tuesday. The company, which reported $52.5 billion in revenues last year, is likely to talk about cost-cutting efforts without discussing individual patent problems.

The drugmaker may cut its sales force overseas in a bid to save $1 billion to $1.5 billion, Banc of America Securities analyst C.J. Sylvester wrote in a recent report, though he did not specify how many jobs might be cut.

Pfizer's U.S. sales force won't get slashed, according to Sylvester, because domestic sales have jumped 90 percent since 1998, while the sale force expanded less than half that rate.

"We believe that any cuts to the sales force will come from overseas, where the sales force is less efficient," wrote Sylvester, who gave the stock a "neutral" rating.

Other analysts believe that Pfizer will leave its sales force alone and trim the fat out of research and development units.

"I think a lot of people are expecting them to come out with cuts in marketing, but our expectation is that they're going to reduce R&D efforts," said A.G. Edwards analyst Al Rauch, who gave the company a "hold" recommendation.

Annual R&D costs have jumped to $7 billion last year from $1 billion in the early 1990s, said Rauch. About half that cost goes to early-stage drug development.

"We think it might make sense for them to try and focus on what they do well, which is Phase III testing and marketing," said Rauch, who expects Pfizer will "let someone else do the early stage work," and then buy the companies to put their products through late-stage testing.

Pfizer will have to find ways to offset losses when it starts losing patents on some of its lucrative drugs. Sylvester estimated impending sales losses could be as much as $14 billion -- or about 27 percent of last year' sales.

"A lot of their big drugs are going to lose patent protection, without the introduction of new drugs that will offset that," said Barbara Ryan, analyst for Deutsche Bank North America, who nevertheless rates Pfizer stock a "buy."
Antibiotic's patent lapsing

Pfizer will lose patent protection in November for antibiotic Zithromax, which brought in $1.9 billion in worldwide sales last year, followed by Zoloft in 2006. In 2007, Pfizer will lose patent protection on antihistamine Zyrtec, which took in $1.2 billion last year, and Norvasc, which brought in $4.5 billion.

Ryan said the drugs in Pfizer's pipeline, which includes blindness treatment drug Macugen, insomnia treatment drug Indipoln, and painkiller Lyrica, won't bring in enough revenue to replace its impending losses.

Pfizer spokesman Daniel Watts declined to provide revenue estimates on these products-in-testing and would not provide details about what management will discuss at next week's meeting.

Banc of America's Sylvester said the Lipitor challenge is a "major overhang" on Pfizer stock, which is off about 25 percent from a year ago.

Merck (Research) has also lost about a quarter of its value over the last year, though other competitors have prospered, with Bayer shares rising by nearly a third and Novartis gaining 10 percent.

With all these difficulties, Pfizer is wise to air them in a meeting, analysts said.

"I'm sure with skepticism and all kinds of rumors running around it will be better for them to clarify their strategy," said Sena Lund, analyst for Cathay Financial, who recommends Pfizer with a rating of "outperform."

See how Pfizer shares measure up to rivals.  Top of page

Analysts want to know how these drugs will fare once the Food and Drug Administration acts on recommendations made by two advisory committees in mid-February to place restrictions on all arthritis drugs known as Cox-2 inhibitors. Bextra and Celebrex belong to this class, as does Vioxx, which Merck (MRK:NYSE) withdrew from the market on Sept. 30 due to tests showing a higher risk of cardiovascular problems. The advisory committees, by a narrow vote, said the benefits outweighed the risks for Vioxx and Bextra. The committees gave Celebrex overwhelming support.

There's also some troubling certainty on the horizon: Pfizer has the highest risk among Big Pharma companies for losing revenue to generic drugs during the next few years. A recent report by Moody's Investors Service says 33% of the company's 2003 revenue will be subject to generic attack by the end of 2007.

And that covers only drugs for which patents will definitely expire. Add other patent challenges, and Moody's says Pfizer's generic risk by 2007 balloons to an industry-leading 59% of 2003's revenue . The biggest wild card is the cholesterol drug Lipitor, which is being challenged in many countries by India's Ranbaxy Laboratories. The consensus view on Wall Street is that Pfizer will prevail in key markets such as the U.S. Pfizer just lost a Lipitor patent fight in Austria, but the company says it will appeal.

Given the patent pressures, analysts want to know how Pfizer can increase revenue or cut costs to ease the patent-expiration impact. And that brings us to the other dose of uncertainty, which belongs to the employees. They'll want to know how many people will be fired, bought out or enticed with early retirement packages if Pfizer undertakes a long-awaited, analyst-advocated round of cost-cutting.

A few months ago, some analysts were suggesting that Pfizer take an ax to its worldwide payroll of some 115,000 people, especially among the 38,000-member sales staff. Now, the prevailing opinion seems to be that a scalpel will be sufficient.

"While demands that the company scale back its infrastructure are increasing, we do not believe management will undertake any truly creative strategies to downsize," says C.J. Sylvester of Banc of America Securities in a recent research report, as he kept his neutral rating. (He doesn't own shares; his firm has an investment banking relationship with Pfizer.)

"The company will not announce a significant decrease in their U.S. sales force, outside of normal attrition, which may not be viewed favorably by investors," he adds. "However, we do believe a 'streamlining' of the company's entire infrastructure will occur."

Albert L. Rauch, of A.G. Edwards, says Pfizer will need to "increase efficiency in order to keep marketing costs in check," but he too believes Pfizer won't make drastic cuts in personnel.

"We do not view the marketing side of the company as broken," Rauch says in a March 29 report to clients. "We do not expect the company to 'fix' something that is working well. Nonetheless, we do expect refinements in Pfizer's marketing efforts, but no major reduction in expenses."

Although Rauch says Pfizer has one of the strongest R&D programs in the industry, he maintains a hold recommendation due to "a number of negative catalysts" in the next 12 to 28 months, including questions about future sales prospects for Celebrex and Bextra. He doesn't own shares; his firm doesn't have an investment banking relationship.

Analysts likely will revise their sales estimates after listening to Pfizer executives on Tuesday, but right now they forecast precipitous declines in sales for Celebrex and Bextra.

Sanford C. Bernstein & Co. sees Celebrex sales dropping from $3.3 billion last year to $1.4 billion this year. The firm predicts revenue from Bextra will fall from $1.29 billion last year to $515 million this year.

The firm's pharmaceuticals analyst, Richard T. Evans, doubts there will be massive layoffs unless ongoing clinical trials of an experimental cholesterol drug, torcetrapib, fail. "Beginning with the top line, we see limited prospect for ... a fundamentally different course of action" at Tuesday's meeting, he told clients on March 28. He has a market perform rating on the stock.

As with many other analysts who raise questions about prospects for the next few years, Evans notes that Pfizer is in better shape than many of its peers. Its operating profit margins are better than the industry average and will remain so for the rest of the decade, he says. Its cost of good sold is well below the average of its peers, and that difference also will continue through the decade. He doesn't own shares; his firm doesn't have an investment banking relationship.

And even though the sales force is bracing for some hits, it does a good job relative to its peers, says a recent report from Banc of America Securities. Among six giant U.S. drug companies, Pfizer's sales force productivity -- sales divided by the number of marketing representatives -- is second in the U.S. market and second worldwide.

"The view that Pfizer's sales force is bloated or unproductive is somewhat unfounded," the report says.