FRX is a fallen angel, for several reasons.
In the early 00s, consultants would tell the pharma companies that were not based on the east coast (e.g. ABT, LLY, KG, TAP, Takeda USA, Yamagouchi USA) that they needed to adopt "a New York state of mind". This was an explicit reference to FRX and PFE. PFE grew through aggressive acquisitions - Warner-Lambert, Pharmacia-Upjohn, etc and FRX was seemingly doing everything right in terms of marketing. Not only did they have Lexapro, which led the depression market for a while, and Namenda (Alzheimer's), but they marketed to physicians very aggressively, refusing to sign onto the PhRMA (the leading industry organization) guidelines for good promotional practices in 2003. So they were inviting physicians to weekend seminars at Jackson Hole long after the other major pharma compaqnies abandoned such appearances of conflict of interest.
FRX has hit a wall recently. Lexapro loses patent exclusivity in 2011, Namenda possibly as early as 2010. Aclinidium, their prospective therapy for COPD, hasn't done so well in Phase III trials. Savella is launching right now for fibromyalgia, but it is third to market after Pfizer's Lyrica and Lilly's Cymbalta. The in-licensing of dutogliptin ( a DPP-IV inhibitor like Merck's Januvia for type 2 diabetes) has only raised questions about the NPV of their pipeline. They may have to acquire a pipeline, too, and unfortunately they will be competing against the big players for the choicest acquisition targets.
I'm not saying that FRX can't perform well here- if the entire pharm,a sector took off, it would likely rally in sympathy, but I think there are other mid-cap pharma companies with better prospects. My own DD has led me to hold CEPH in the mid-cap space for the time being. |
