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

To: LWolf who wrote (4597)	7/25/1998 1:20:00 AM
From: Muthusamy SELVARAJU	Read Replies (1) \| Respond to of 9523

There were no major surprises from the Analyst meeting, as it simply confirmed PFE's continuing (and possibly accelerating) momentum. As I posted some weeks ago, I believe they are actually on a $2.50 EPS for this year, much higher than current WS analysts' estimates. I did get Q2 EPS estimate wrong, at $.50c, but I'm convinced some of the miss is actually buried in their "deferred revenues" line on the Balance Sheet. I took the trouble to call their Investor Relations office as soon as the earnings announcement came out July 17(?)and was politely told that I cannot have that number, that it will not be revealed at the Analysts' meeting yesterday, but will be disclosed in the 10Q which will de due out anytime soon. I've been long-time long on the stock (acquired mainly during the pharma industry's doldrum periods during 1994-6 when the mantra was for MRK to acquire Medco as a natural defence against Mrs. Clinton's healthcare bill), but also ridiculously long August 115, 120 and 130 calls purchased AFTER the recent earnings announcement. My hunch is that the 10Q Report will definitely provide further insights into PFE's steeply upwards revenue momentum that effectively began during Q2, influenced in large part by Viagra. One of top WS Pharmaceutical analysts told me recently that Viagra actually has a 99% Gross margin, which is effectively a licence.....to print money). Apparently, the manufacturing cost of the pill for PFE is around 7c, and they can supply all of the expected demand easily, as it is a 'simple' chemical product and not one that needs biotechnology processing. It is noteworthy to comment that I found it unusual that PFE actually failed to publish any of their balance sheet information in their recent earnings release. Let's wait for the 10Q which I hope comes out within the next 4 weeks! (Luckily, we have the best period for the August calls this month, as they only expire in a full 4 weeks time, i.e. August 21st). If there are any concerns at all, the one I continue to think about is what 'good deed' PFE is going to return to WLA for their Lipitor gift, as the all important marketing alliance was clearly intended to be a 2 way street. Whether WLA was offered Viagra as the 'quid pro quo' may never be known, but it wouldn't surprise that they make an alliance revenue arrangement on one of their upcoming blockbusters. At the moment, Lipitor is too one-sided in PFE's favour, but I say that because I also own WLA and I feel that WLA should have been more self-confident in their drug's efficacy at the very beginning. After all, WLA is not exactly EISAI (Aricept). Regards,