Pfizer Seen With Two Drug Approvals In May
Peter Kang, 05.08.06, 3:45 PM ET
Bear Stearns reiterated an "outperform" rating on Pfizer ahead of a U.S. Food and Drug Administration decision on the insomnia drug Indiplon.
Analyst John Boris expects federal health regulators to approve Indiplon, co-developed by Neurocrine Biosciences (nasdaq: NBIX - news - people ), by the action date of May 15. In addition, the analyst expects the FDA to approve smoking cessation drug varenicline, to be marketed as Champix, by the end of the month.
"We expect Pfizer to launch six new product opportunities in 2006 and file at least four new products in 2007," Boris wrote in a note sent to clients. "We see growth of the CNS [central nervous system] division driven by Lyrica, Geodon, as well as Indiplon, vareniclin, and asenapine."
Lyrica, Pfizer's treatment for diabetes-related pain, and Geodon, an antipsychotic treatment, were "standouts" in the first quarter, according to Bear Stearns. "Both products outperformed on strong underlying demand," said Boris.
The analyst projects Lyrica to see 2006 sales of $1 billion, above Pfizer's own forecast of $900 million.
"Lyrica is a follow-on to $2.7 billion Neurontin, we believe the Street is underestimating its potential, as the brand carries higher margins than Neurontin, is priced competitively against generics, has multiple points of differentiation and is one of the most studied CNS products," Boris said.
In a separate report, the analyst said Pfizer is more likely to spin-off its consumer products division as opposed to a sale of the division, which logged sales of more than $4 billion in 2005.
"While an outright sale would increase Pfizer's ability repurchase shares and increase dividends, we view as a spin-off as more likely as Pfizer wants acquirer to cover its tax liability," he noted.
"We see a tax free spin as an opportunity for Pfizer to increase shareholder value, as evidenced by Merck-Medco and Bristol-Myers Squibb-Biomet spin-offs."
Link: forbes.com |
