The Myth of Viagra
Newspapers throughout the US recognized Viagra's first birthday today:
phillynews.com
washingtonpost.com
nydailynews.com
Since last March 27, 1998, Viagra resulted in the creation of many myths. Here is a common one held by most writers and even shareholders:
"Viagra was the driving force behind the growth in the price of PFE over the last year since its launch."
Today's Philly News article is an example of one writer expanding on this myth with the help of a PFE spokesperson:
"As Pfizer spokeswoman Pam Gammel noted, sales and libido aren't
the only things that have been going up. Pfizer stock, valued at $74 a
share in January 1998, was up to $99 by March 31. It jumped from
$96 to $121 during a one-week frenzy in April and now hovers
around $136."
The fact is that over the last year , Viagra had a minimal impact of the price of PFE. In fact, you could make a case that Viagra's high expectations held the price down!!! Here is the evidence.....a comparison of Big Pharma prices since March 27, 1998:
. Price Price % Chg March
Rank . 03/26/99 3/27/98 1999/1998
1 Amgen 74.63 30.31 146.2%
2 Amer 66.69 44.75 49.0%
3 Pfizer 135.00 95.50 41.4%
4 Pharma 61.81 43.94 40.7%
5 Lilly 84.44 60.19 40.3%
6 Scher 55.69 40.94 36.0%
7 J&J 91.31 71.50 27.7%
8 Merck 80.38 63.88 25.8%
9 Abbott 46.81 37.75 24.0%
10 Warner 67.69 55.06 22.9%
11 Glaxo 61.81 51.69 19.6%
12 Bristol 59.50 50.69 17.4%
13 Smith 66.63 63.50 4.9%
Big Pharma 73.26 54.59 34.2%
Dow 9,822 8,800 11.6%
S&P 1,283 1,102 16.5%
NASTie 2,419 1,836 31.8%
Peabody Analysis
As you can see, since the Viagra launch , PFE has increased an impressive 41.4% as compared to 34.2% for Big Pharma and 16.5% for the S&P. However, this growth was only third in Big Pharma and only slightly ahead of PNU, LLY and SGP.
Without Viagra, 1998 PFE sales would have increased a strong 19% over 1997. Accordingly, it is safe to assume PFE would have increased at least 35% over the last year .....even without the Viagra Launch based on product line growth and the launch of Celebrex.
QED: At the very best, over the last year, Viagra has had a positive impact on the price of PFE of only 5%. The greatest effect of Viagra was post NDA submission and prior to launch (from September 29, 1997 to March 26, 1998) in which PFE jumped from 61 1/16 to 98 5/8.
Conclusion: Viagra has not been the driving force behind PFE over the last year.
BigKNY3 |
