Pfizer Officials File to Sell Near Record Highs: Insider Focus
[part of the reason for stock's recent weakness?]
Bloomberg News
April 30, 1998, 2:48 p.m. PT
Pfizer Officials File to Sell Near Record Highs: Insider Focus
New York, April 30 (Bloomberg) -- Pfizer Inc. officials
filed to sell as many as 469,562 shares this month as sales of
Pfizer's new impotence pill Viagra boosted the stock to a record.
Pfizer Chairman and Chief Executive William Steere is in
line to lead the selling, filing to sell 80,000 shares, according
to Washington Service, which tracks stock transactions by
insiders such as executives and directors. Another 16 Pfizer
executives and one director also filed to sell shares. At recent
prices, the sales could fetch as much as $54 million.
Pfizer's stock is up 53 percent this year on prospects that
Viagra, the first oral impotence medication, could become one of
the biggest sellers in pharmaceutical history. The shares touched
a record high of 121 3/4 on April 21, pushing Pfizer's market
value past long-time U.S. drug industry leader Merck & Co.
''We don't have a problem with management taking some money
off the table as the stock runs up,'' said Scott Abernethy, an
equity analyst for Glenmede Trust, which holds about 1.7 million
Pfizer shares. ''You're talking about relatively small blocks.''
Pfizer executives also have much of their pay tied to stock
options, said Charles Engelberg, an analyst with AmeriCal
Securities, who has a ''buy'' rating on Pfizer. For that reason,
it is not unusual to see insider sales from time to time, he
said.
January Sales
In January, for example, Pfizer's Steere sold 100,000 shares
in an options-related sale, netting about $6.16 million. After
the sale, he held 440,091 Pfizer shares, according to Washington
Service. All told, Pfizer executives sold about 276,708 at prices
of $77.95 to $82.25 each in January, fetching at least $21.6
million.
Eleven of the 12 Pfizer insider sales reported in January
were related to options. No sales were reported in February or
March, Washington Service said.
Pfizer declined to comment on the latest plans to sell by
insiders, which were disclosed in Securities and Exchange
Commission reports.
Analysts estimate that Viagra sales could reach $1 billion
in its first full year on the market. Eventually, sales of the
drug could rise to $10 billion a year, said Engelberg, who has a
''buy'' rating on Pfizer.
For the Price of a Movie
At about $10 a pill, ''it's basically the same price as a
movie,'' Engelberg said. ''For many people, it will be more a
form of entertainment than anything else. Aging baby boomers can
afford it.''
Doctors wrote as many as 46,000 prescriptions a day for
Viagra in the week ended last Friday, according to NDC Health
Information Services, which tracks prescription data.
Still, it's far from certain whether sales of the new drug
will continue at that pace, said Glenmede Trust's Abernethy.
Abernethy said Pfizer stock may ''take a breather'' after its
recent sharp rise.
''It may not perform as well as the rest of the industry for
a month of two,'' he said.
Pfizer has started to lag the Standard & Poor's Drugs Index
after rising more than twice as much as the broader index in the
year before Viagra sales started.
Pfizer has dropped 3.8 percent since closing at a record
high of 118 1/4 last Friday, while the S&P Drug Index is up 0.3
percent.
Too much attention has been paid to Viagra, Abernethy said.
''It's only one drug in an incredibly strong portfolio,'' he
said.
For example, Pfizer plans to introduce another potential top-
selling drug this year, the schizophrenia medication Zeldox. This
drug is believed to have fewer side effects than products already
on the market, including Eli Lilly & Co.'s Zyprexa and Johnson &
Johnson's Risperdal.
Lilly's Zyprexa had sales of $730 million in 1997, its first
full year on the market, while Johnson & Johnson's drug is
estimated to have more than $800 million in annual sales.
Other Pfizer officials who filed with the SEC to sell shares
in April include Executive Vice President Henry McKinnell and
Jean-Paul Valles, a director, and 15 vice presidents.
--Kerry Dooley in the Princeton newsroom (609) 279-4016/jmg |
