10/06 15:18 US drug group falls on profit taking, Viagra news
By Ransdell Pierson
NEW YORK, Oct 6 (Reuters) - Investors nervous about expected poor
third-quarter earnings in the broad U.S. market hedged bets by selling
outperforming blue chip U.S. drug stocks Tuesday, analysts said.
Analysts said investors also remained spooked by industry data released
Monday showing that new U.S. weekly prescriptions of Pfizer Inc's <PFE.N>
popular anti-impotence pill, Viagra, fell moderately in the week ending
September 25.
The American Stock Exchange Pharmaceutical Index was down 0.62 percent
at 1456 EST/1956 GMT, while the Dow Industrials edged 0.74 percent higher.
"Prices of big U.S. drug stocks have risen very well in the last six months and
some folks are cashing out and transferring their money elsewhere. Part of the
reason is increased insecurity about the overall stock market," said Neil Sweig,
a drug analyst for Southeast Research Partners.
Sweig said he believed the largest U.S. drug makers will report double-digit
earnings growth in the quarter, head and shoulders above the 2.4 percent
decline in earnings growth forecast by First Call for companies in the Standard
& Poor's 500 Index.
Pfizer led the downward charge on Tuesday, off 3-5/8 to 91 after falling 4-1/2
Monday on news from research firm IMS Health that new U.S. prescriptions of
Viagra fell 6 percent to 68,260 during the week ending September 25.
That was a reversal from the prior week ending September 18, when the
number of new U.S. weekly prescriptions of the diamond-shaped blue pills that
retail for about $10 each had risen 10 percent.
IMS added that the number of refills for Viagra declined 5 percent in its most
recent weekly survey, resulting in a refill/new prescriptions ratio of 1.19 -- flat
from the prior week of September 18.
"It's the Viagra news, that's why Pfizer's still hurting today," Sweig said, noting
that even at its diminished price the stock is still up 20 percent for the year to
date.
James Keeney, an ABN-AMRO drug analyst, said some investors also seemed
concerned by the possibility Viagra sales might have been overstated in the
second quarter and third quarter due to wholesaler stocking of the drug.
"Some people are thinking there may have been inventory buildup, which means
shipments sent to wholesalers could have been counted as sales although the
pills have not yet been dispensed" to patients, Keeney said.
Merck & Co <MRK.N>, meanwhile, fell 1-1/4 to 128, while Schering-Plough
Corp <SGP.N> slumped 2-5/16 to 96-15/16.
Diversified health-care giant Johnson & Johnson <JNJ.N> eased 11/16 to
78-3/4 while Warner-Lambert <WLA.N> dropped 7/8 to 70-1/2.
Bristol-Myers Squibb Co <BMY.N> bucked the trend, however, gaining
1-1/16 to 97-13/16. |
