|
 The largest U.S. drugmaker, whose laboratories have not come up with
any big-selling new medicines for a decade, is expected to report
significantly lower second-quarter revenue.
While many industry watchers expect Pfizer to re-engage with
Britain's AstraZeneca in coming months, some say the U.S. drugmaker
should consider targets more focused on biotechnology, a strategy
that has paid off for Merck & Co and Bristol-Myers Squibb Co.
Although Pfizer is conducting trials of promising products -
including breast cancer drug palbociclib and vaccines against
meningitis and staph aureus - it needs far more drugs to generate
meaningful sales growth, said Ori Hershkovitz, analyst with the Tel
Aviv-based Sphera Fund, which holds Pfizer shares.
"Pfizer is in a very desperate spot, having seen most of its
pipeline disappoint and facing multiple patent expirations," he
said. "It needs growth; it needs to buy a pipeline."
Pfizer on May 26 officially abandoned its six-month quest for
AstraZeneca after its final $118 billion offer was spurned.
Investors still see a rationale for the deal, which would allow
Pfizer to enjoy lower corporate tax rates as a UK-based company and
a promising pipeline of new cancer treatments.
Under British takeover law, AstraZeneca could reach out to Pfizer in
August and Pfizer could make renewed overtures to its smaller rival
in November.
"I definitely think Pfizer will come back for Astra at a somewhat
higher bid," Hershkovitz said. But he recommended Pfizer consider
smaller targets whose treatments might broaden its existing research
priorities, such as Belgium's UCB SA and Switzerland's Actelion Ltd.
UCB, which makes treatments for epilepsy, rheumatoid arthritis and
Parkinson's disease, has annual sales of $5 billion, and a market
value of $17 billion. Actelion sells lucrative drugs for orphan
diseases, rare and often life-threatening conditions that command
high prices. It has annual sales of $2 billion and a market
capitalization of $15 billion.
Leerink Swann analyst Jason Gerberry has said it might make sense
for Pfizer to buy Dublin-based generic drugmaker Actavis, which
itself just bought U.S. specialty drugmaker Forest Laboratories for
$25 billion.
[to top of second column] |
Disappointment with Pfizer is reflected in its stock price, which
has fallen 1.4 percent this year, against a 11 percent gain for the
ARCA Pharmaceutical Index of large U.S. and European drugmakers.
Over the past two years, its shares have risen 27 percent, versus a
44 percent jump for the drug sector.
A fresh wave of patent expirations on Pfizer's top drugs is
approaching. Its Celebrex painkiller faces generics in the United
States late this year, while impotence treatment Viagra goes generic
in 2017. The company's biggest product, Lyrica for nerve pain, loses
U.S. patent protection by 2018. The three drugs have combined annual
sales of almost $9 billion, and account for almost 20 percent of
Pfizer's total revenue.
Biotechs with drugs already on the market and which also have
exciting technologies should be on Pfizer's wish list, said Navid
Malik, analyst with London-based Cenkos Securities. He cited
companies such as Celgene Inc and Vertex Pharmaceuticals Inc.
Roger Pomerantz, who headed business development at Merck from 2010
until last summer, said the potential of Merck's immuno-oncology
drugs - medicines which train the immune system to recognize cancer
cells - was not recognized even within the company for several years
after it acquired them.
"It's who you have on the inside helping you understand the science"
that counts, he said.
(Reporting by Ransdell Pierson; Editing by Michele Gershberg and
Lisa Shumaker)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed.
 |
