Pfizer stock is down 13% so far today on news that development of its Lipitor successor – torceptrapib – has been halted. Analysts have downgraded the stock and cut price targets as a result. Barbara Ryan – managing director and senior analyst at Deutsche Bank – disagrees though. She appeared on “Morning Call” to say that the dip in price today is a buy-in opportunity.
Ryan agrees the news is disappointing – but she says the drop in price reflects the “greatest degree of uncertainty” in Pfizer’s reaction. The world’s largest pharmaceutical company still has three years before it loses its exclusivity with the cholesterol-fighting blockbuster Lipitor – and it’s not going to sit on its hands in the interim.
Ryan knows the firm has a big hole to fill in 2010 – when it will lose about $5 billion in Lipitor revenue alone to generic competition – but says Pfizer has the motivation and balance sheet to recoup and move forward.
“In the very short term – I believe that Pfizer will will likely raise their dividend 15% to 20% ... and management will be hard at work to replace [torceptrapib] through acquisitions,” Ryan says.