Pfizer's Next Move Draws Speculation
Investors in the pharmaceuticals industry have now turned their attention to possible acquisitions by Pfizer after the drug-maker halted trials of a new cholesterol drug.
Shares of Pfizer dropped sharply on Monday after the company said its most important experimental drug for cholesterol failed due to safety concerns. The drug torcetrapib was expected to fill the gap in revenues for Pfizer once the patent on its best-selling drug Lipitor expired.
"I think Pfizer's going to need a number of products," said Mark Monane, Biotech Analyst at Needham & Co., appearing on "Squawk Box." "There are a number of late-stage biotech companies that fit more into their culture. We like CV Therapeutics and ISIS Pharmaceuticals. Both have drugs in the cardiovascular area."
Appearing on CNBC Monday, Pfizer CEO Jeffrey Kindler expressed disappointment about the failure of the company's new cholesterol drug but said Pfizer plans to continue growing through strategic acquisitions.
"We're not looking for some short-term financial benefit from an acquisition," Kindler said. "We want to strategically grow our business. We think there are opportunities in biotechnology, in vaccines, in specialty areas like oncology. We will be both aggressive, but I might add financially disciplined, in finding strategic opportunities."
Kindler expressed optimism about Pfizer's early- to mid-stage pipeline, which he described as the strongest in the company's history. Beginning in 2011, they "have made a target of four new products annually from internal development," which will be supplemented by two additional products from business development.
"It's important to remember that this is a financially very strong and profitable company," he added. "This gives us an opportunity to address these issues."
Kindler also touted the pharmaceutical giant's existing pipeline and its focus on containing costs.
"We know we need to have a lower cost base and a more flexible cost structure," he said. "Second of all, we are relentlessly focused on total shareholder value which includes earnings growth, dividend and share buybacks."
Kindler said Pfizer's management is fully aware of the challenges ahead. They plan to accelerate the company's restructuring program, under which they've already announced plans to slash their sales force.