This past Saturday night--Pfizer announced it's stopping production of its new anti-cholesterol drug torcetrapib. Unfortunately--clinical test results showed there were more deaths than expected from taking the experimental drug.
Catherine Arnold is a pharmaceutical analyst from Credit Suisse. While on "Squawk Box" Arnold said this is obviously a big deal for the world's largest drug company--and said her firm has lowered their target price for the stock from $28 a share to $24. Fair value says Arnold would be $23 to $24 a share. Arnold says she is neutral on the stock (analyst disclosure-Credit Suisse is an investment bank client of Pfizer). The stock is expected to see dramatic losses today.
Arnold says this certainly raises questions about the effect of pharmaceutical drugs improving health--and it's double troubling for Pfizer which could lose 25% of its revenue source with the loss of torcetrapib.
Torcetrapib is supposed to increase the good cholesterol or HDL. It was the most important drug in Pfizer's new line of products--and a follow up to the company's lipitor drug. The company thought it would be a "blockbuster" and had been praising the new drug.
Pfizer CEO Jeff Kindler will be on "Power Lunch" today to talk about what happened.