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

To: Jim Lamb who wrote (1948)	5/2/1998 1:05:00 AM
From: Anthony Wong	Read Replies (1) \| Respond to of 9523

Investing in wonder drugs Viagra, Pfizer Inc.'s answer for impotency, is the latest hyped pill May 1, 1998: 6:18 p.m. ET NEW YORK (CNNfn) - Viagra fever shows the power one pill can have on a drug company's stock price. Pfizer Inc.'s (PFE) new impotency fighter pushed share prices up 30 points even before it hit the market in April. Since then, the drug has been a staple on the nightly news and the stock has jumped another 20 points. But media heat doesn't always make drug stocks a winning buy. Sometimes a drug just doesn't live up to its billing -- and that can really make an investor sick. "It's hard to say if Viagra is a sure winner," said Alex Zisson, senior pharmaceutical analyst at Hambrecht & Quist in New York. "Viagra is a wildcard." The problem is sometimes a drug might be inconvenient to take. Or, the results might be hard to see. For example, Rogaine, introduced by Pharmacia & Upjohn (PNU) in 1987 to combat baldness, required users to apply it twice a day. Then they had to wait months for signs of new hair. And if people abuse a drug, it could mean bad things for a stock price. Wyeth-Ayerst Laboratories and Interneuron Pharmaceuticals pulled diet drug Fen-Phen off the market in September 1997 because of side effects. Some analysts think doctors overprescribed the drug. Interneuron stock (IPIC) peaked at 22 last summer and later dropped as low as 5-11/16. It closed at 6-3/16 Friday. Wyeth-Ayerst is a division of American Home Products Corp. (AHP). "Fen-Phen was an abused drug, and it could happen with Viagra," said Cynthia Beach, research analyst at Gerard Klauer Mattison in New York. "If people use a drug inappropriately, there's bound to be something negative. . That would be a negative for the stock." Some drugs also take time to catch on, Zisson said. On the other hand, Prozac was a driving force behind growth at Eli Lilly & Co. (LLY) after the Food and Drug Administration approved it in 1987. Glaxo Wellcome's (GLX) ulcer drug Zantac was another wonder drug that propelled the company's stock upward after it hit the market 1983. "Information and excitement about a new drug will drive up the stock price," Beach said. "A drug like Zantac drove up the stock price tremendously. It was a blockbuster product." There's certainly enough excitement about Viagra these days. Some doctors offices set up special phone lines for Viagra inquiries. But nobody knows whether men will really take it, Zisson said. The effectiveness is also a question, Zisson said. Viagra worked well in clinical trials, but will it deliver in the real world? And how do you measure success? Is it a win if a man gets an erection, or does he have to have sex? What if the drug works only 4 out of 5 times he takes it? Analysts also wonder whether the so-called "recreational market" will take off. "There's really no precedent for Viagra to know exactly what it means for future sales," said Richard Stover, senior managing director of Auerbach, Pollak & Richardson in New York. The easiest way to tell if a drug will make it big on Wall Street is by tracking its prescription demand, said Joseph Riccardo, senior managing director at Bear, Stearns in New York. His formula is simple: "Prescriptions make sales make earnings make stock price." "People try to make it complicated but it's not," Riccardo said. And timing isn't as important as people think, Riccardo said. A lot of people assume they need to invest before a drug is approved. Not true. They do, however, need to get in when the stock is rising -- not when the drug's patent is expiring. Meanwhile, Pfizer's stock closed Friday at 112-3/8, well above its year-low of 47-1/2. In January, the price hovered in the 70s before spiking up to 120 in April. Riccardo thinks there's room for the share price to go higher. "I would argue Viagra will keep doing well," Riccardo said. "It has room to grow." -- by staff writer Martine Costello cnnfn.com