Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: WS_DE who wrote (5184)	8/25/1998 5:52:00 PM
From: Barron Von Hymen	Read Replies (1) \| Respond to of 9523

street.com is probably badmouthing PFE so that Kramer can pick some up in his own portfolio. how convenient.

To: WS_DE who wrote (5184)	8/25/1998 6:06:00 PM
From: HiSpeed	Respond to of 9523

Top Stories: Viagra Falls By Jesse Eisinger Senior Writer 8/25/98 4:35 PM ET It looks like the emperor has stopped taking the little blue pill and put on his clothes. Remember when analysts were saying Pfizer's (PFE:NYSE) Viagra would do $6 billion annually at peak and Business Week delved into the financial-modeling business to come up with its own sober estimate of $10 billion in annual sales? Well, now Viagra is settling in with normal demand and it's looking like a significantly smaller drug. As it turns out, the instant cultural phenom and household name isn't an aphrodisiac, doesn't save lives and requires a prescription. The drug isn't cheap, especially for the randiest users, and several major health-care plans have (controversially) refused to reimburse patients for it. When the drug was having the biggest launch in the history of pharmaceutical sales, being sold on the black market around the world and saving the rhino in South Africa, investors could ignore these kinds of limitations. Viagra isn't disappearing, but the remedy's prescriptions are steadily falling. New prescriptions have dropped for four weeks straight and for seven of the last eight, according to data from ING Baring Furman Selz. And the week in which the scrips rose came after a week in which they posted their largest drop in the period, 15%. Total prescriptions have fallen in seven of the last nine weeks. Current sales annualize at about $496 million a year, based on scrips for the week ended Aug. 14, down from the annualized rate of $900 million in its sixth week on the market, when scrips peaked, according to pharmaceutical analyst Jim Flynn of Furman Selz. A look at the new scrip growth of Vivus' (VVUS:Nasdaq) disappointing Muse treatment for impotence and Viagra track in an uncannily similar fashion. Flynn, whose firm hasn't done any investment banking for Pfizer, says the drug should reach $2 billion in annual sales in 2002 and that that estimate is "potentially high." Not exactly the biggest drug ever. Those kinds of sales probably would mean Viagra wouldn't break the top 10 for that year. It's not that it's just too hot in the summer to do the fandango. Lifestyle drugs, especially those declared by the mainstream press as the next great change to our culture, are vastly overrated, Flynn says. In his prescient July 1 report on Pfizer, he reminded investors of some unpleasant overlooked history: "We have always been on the more cautious side of the Viagra debate, partly because of the histories of all lifestyle products that have been launched prior to Viagra," the analyst wrote, citing Rogaine for baldness, Redux for obesity, nicotine patches for smoking cessation and Muse for impotence. "In each of these cases, products have shown the same pattern [as Viagra] of an early peak with declining use thereafter." In the report, Flynn says he downgraded the stock June 22 to hold from buy, when the shares traded at 111 1/2. Pfizer traded at 107 9/16 Tuesday. The incredible shrinking impotence market could mean more bad news for the already wounded stocks of other impotence-drug companies, such as Zonagen (ZONA:Nasdaq) and Macrochem (MCHM:Nasdaq). These potential entrants into the impotence-drug market gained on Viagra's hype, but as the hype fizzles, so do their stocks. Most analysts think that Pfizer has so many drugs emerging that a faltering Viagra won't hurt the top and bottom lines. But there is a nagging concern about Pfizer's pipeline. Flynn decided to look at Pfizer's pipeline of new drugs from its 1994 analysts' meeting and found disconcerting results. Of the 15 drugs highlighted, only two have been launched and seven have been discontinued or shot down by the Food and Drug Administration. Five are still being studied and only one has been filed for approval. In pharmaceutical lore, one out of 10 drugs is supposed to succeed from the beginning of human trials. But the odds are supposed to be significantly better for big pharma companies with drugs in human trials that they choose to talk up to Wall Street. Flynn asks, "When looking at Pfizer's current pipeline products, should we be more skeptical?" He wonders "whether Pfizer's stock deserves a premium multiple for its pipeline and prospects." Pfizer has made up for the gap in newly developed drugs in amazingly deft fashion. Its main strategy has been to develop the sharpest sales force in the business and become the marketing partner of choice. The stunning success in this strategy has been Lipitor, the cholesterol lowering drug, which was developed by Warner-Lambert (WLA:NYSE). Another home run could be Celebra, a new pain and inflammation drug in which Pfizer has a co-marketing deal with Monsanto (MTC:NYSE). The shares of Monsanto and American Home Products (AHP:NYSE) rose on the news that the FDA had given Celebra an expedited, or six-month, review. (American Home Products is taking over Monsanto.) The drug, which should be launched next year, will be a $1 billion drug for Pfizer in 2002, Flynn estimates. But that hasn't been enough to goose Pfizer's stock. The shares are off 9% from their July 13 high of 118 11/16.