Pfizer best may be past, say analysts

The power of Pfizer may have peaked, warns the latest Visiongain industry trends report, as the company issues profit warnings and contemplates a rockier future. Pfizer, with annual sales of more than $52 billion and profits of $14 billion, saw 17 per cent growth between 2003 and 2004, far above the industry average.

The company has built its success on some of the worlds top selling drugs but is about to lose patent protection on a number of key products and a consequent major loss of income over a very short time. It has already lost one patent court battle over international number one seller Lipitor, whose patent protection will expire in 2009. Even the strength of Viagra is falling as competitors eat into market share.

“Although recent third quarter results from Pfizer were not as positive as many in the industry were expecting, they were not a surprise,” said Tristan Heath, pharmaceutical market analyst at Visiongain. “Whilst Pfizer have dominated the pharmaceutical industry in recent years, the latest downturn in sales and future profit warnings from Pfizer were predicted by visiongain in our latest report.”

Aware that it has no room for complacency, Pfizer will spend $8 billion on research and development in 2005 alone. Some have also called into doubt whether research alone will guarantee continuing success, and predict that the company will be on the look out for further mergers to satisfy the demand for growth. Pfizer’s $60 billion Pharmacia merger has proved a mixed blessing however, netting the company to top selling pain killers Dynastat and Celecoxib but also entangling it in the Vioxx scandal.

Some have also suggested that the problems faced by Pfizer are indicative of troubles at the top of the pharmaceutical industry, as pricing pressures, patent expirations and safety issues combine to threaten recent profits.

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