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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Little Gorilla who wrote (7872)	6/10/1999 4:00:00 PM
From: Anthony Wong	Respond to of 9523

More analyst comments in this article: Pfizer Falls After Estimates Lowered on Trovan Limits (Update1) Bloomberg News June 10, 1999, 12:15 a.m. ET Pfizer Falls After Estimates Lowered on Trovan Limits (Update1) (Adds analyst comments and estimates in 3rd and subsequent paragraphs. Updates share price.) New York, June 10 (Bloomberg) -- Pfizer Inc., the No. 2 U.S. drugmaker, fell as much as 5.2 percent on lower expectations for the company's earnings after U.S. regulators limited the use of its antibiotic Trovan. Pfizer shares fell 4 15/16 to 100 in midday trading of 9.3 million, more than double the three-month daily average, and earlier traded as low as 99 1/2. The stock was the fourth-most actively traded in U.S. markets by volume and No. 2 by value. The U.S. Food and Drug Administration said in a notice to doctors that Trovan should only be used to treat patients with serious or life-threatening illnesses because of concerns about liver problems. The limitation has dimmed high hopes for the drug, causing some analysts to cut their earnings projections for the year. ''A billion-dollar drug basically went 'poof.' That's expensive,'' said Jami Rubin, an analyst at Morgan Stanley Dean Witter with a ''neutral'' rating on Pfizer. She now thinks Trovan will bring in $200 million a year at the most, down from her original peak projection of $1.3 billion. The FDA instructed doctors to limit the use of Trovan after 14 reported cases of liver failure in patients taking the drug. Six patients died and four needed liver transplants. Pfizer said it will work with doctors, pharmacists and wholesalers to limit distribution of Trovan. ''It's certainly a blemish to Pfizer, especially since they invested so much money in getting the drugs approved for so many indications,'' said Michael Krensavage, a Brown Brothers Harriman analyst with a ''neutral'' rating on Pfizer. Estimates Cut Krensavage lowered his Pfizer earnings estimate for this year to $2.40 a share from 2.43, and his 2000 estimate to $2.85 from $2.92. The New York-based drugmaker is expected to earn $2.46 this year, based on the average estimate of analysts polled by First Call Corp. Rubin cut her 1999 earnings estimate to $2.43 from $2.45 and her 2000 estimate to $2.92 from $2.95. Other analysts have reduced their earnings expectations for the company. Yesterday, Merrill Lynch & Co. analyst Steven Tighe said he dropped his estimate for 1999 sales of Trovan to $140 million from $300 million and lowered his 1999 earnings estimate to $2.47 from $2.49. Tighe has a near-term ''accumulate'' rating on Pfizer. Salomon Smith Barney analyst Christina Heuer reduced her estimate for Pfizer's 1999 earnings to $2.40 a share from $2.45 a share. She said the company is being hurt by slowing demand for its impotence pill Viagra, as well as the Trovan limits and other matters such as its failure last year to win FDA approval for its Zeldox schizophrenia drug. ''We have slashed our (Trovan) sales projections from $1.2 billion in 2002 to under $100 million,'' said Heuer, who lowered her rating on Pfizer to ''neutral'' from ''buy,'' in a report. The limit on Trovan use ''is a back-breaker'' for Pfizer, she said. Banc of America Securities analyst Leonard Yaffe also said today that he cut his rating on Pfizer to ''hold'' from ''buy.'' Pfizer shares have lost about one-third of their value since April, when the company said that second-quarter profit might fall below analyst expectations.