At 12 p.m. ET, shares of Pfizerwere trading about 13% lower - largely because the company halted development of torcetrapib--a new cholesterol treatment. The drug was supposed to fill the void when Lipitor--its best-selling drug--loses patent protection in 2010 (Lipitor sales totaled $12.2 B last year). In a First On CNBC-TV--Pfizer CEO Jeff Kindler (making his first appearance on CNBC-TV since becoming CEO) explained exactly what happened and what it means for his company’s future.
According to Kindler, Pfizer first learned of the health risks posed by torcetrapib on this past Saturday from an independent monitoring board. As soon as they found out, the executive team went into action immediately.
In terms of what actually went wrong with the drug -- Kindler revealed that Pfizer doesn't know yet. He emphasized that although torcetrapib was often used in conjunction with Lipitor, the results have nothing to do with the safety of Lipitor.
Of course, the big question is - what's in the pipeline that will convince investors not to dump the stock?
Kindler said that it's important to remember Pfizer is a strong and profitable company and he expects to hold the Liptor patent until June 2011. He highlighted 3 initiatives that he said should restore investor confidence.
1) Pfizer is transforming the company--pursing a lower cost base and a more flexible cost structure.
2) Pfizer is focussed on shareholder value which is earnings growth as well as dividends and stock buy backs.
3) And just last week--Pfizer laid out the most robust pipeline in company's history - targeting 4 new products a year from internal development beginning in 2011; supplemented by 2 new products from business development.