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Saturday, November 04, 2006

Weekend Edition: Pfizer: When Analysts Disagree (PFE)

Pfizer announced that its experimental drug for lowering cholesterol also raises blood pressure. The clogged arteries may not kill customers, but the high blood pressure may.

Prudential put out a note on the problem saying that does not think "it will effect the overall risk versus benefit of the drug in the long run."

Goldman Sachs had a different take: "The concerns about blood pressure risk with torcetrapib will be reinforced by these data, however preliminary the data are."

The market seemed to side with Goldman, as Pfizer's shares dropped from a price of $27.22 on Monday to an intraday low of $26.44 yesterday.

The problem that Pfizer has with torcetrapib reflects a much larger concern in the market. As patents on the large money makers at Big Pharma expire, moving some share to generic drug makers, the larger companies must come up with new, patented products.

IMS Health, a research firm, says that $23 billion worth of drugs will go "off patent" this year based on the annual sales of the products. Another $16 billion worth move out of the patented category next year.

Pfizer's new cholesterol drug may be having trouble, but that could be the least of the company's problems.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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