Pharma's Market

PHARMA WATCH LIST

SPECIAL REPORT

Healthy Horizons
A brand new series of weekly segments which will explore the macro and micro issues facing the global economy.

LATEST FROM OUR BLOGS

» More

- New York Fashion Week Hits the Runway as Colors Pop

TOP HEADLINES

» Markets | Economy | Companies

- Stocks Looking Past Europe for a New Driver of the Rally

PHARMA'S MARKET VIDEO

» More

Wall Street Protests 29 Apr 2010
Following a big demonstration in favor of financial regulation right outside the NYSE, with CNBC's Mike Huckman.
March on Wall Street 29 Apr 2010
Main Street takes to Wall Street today with thousands of union community activists marching to make the big banks pay, with CNBC's Mike Huckman.
Mike Huckman: Reporter's Reporter 29 Apr 2010
Original air date, June 26, 2002.
SBUX Beats the Street 21 Apr 2010
CNBC's Mike Huckman has Starbucks' earnings breakdown.

The Orange Squeeze on Dimon

16 Apr 2010

Some students at Syracuse University have a different idea rather than having JPMorgan's chairman/CEO Jamie Dimon deliver this year's commencement speech, reports CNBC's Mike Huckman.

Nasdaq Outperforms 14 Apr 2010
The Nasdaq easily outperforming the other major indexes today, with CNBC's Mike Huckman.

RSS FEED

» Help

Subscribe to this RSS feed
Stay up to date with Pharma's Market.

Comings & Goings at Pfizer & Glaxo

Published: Monday, 8 Oct 2007 | 1:30 PM ET

Text Size

By: Mike Huckman
Reporter

This morning, the world's second biggest drug company, GlaxoSmithKline [GSK Loading... () ] , announced that Andrew Witty will replace JP Garnier as CEO at the end of next May. It's been known for a while that Garnier would be retiring next year, and the question was who would be tapped to succeed him.

Witty, 44, is the youngest of the top three internal candidates. Right now he is President of European Pharmaceuticals at GSK. The company is still trying to navigate its way through the Avandia safety controversy and is waiting for FDA approval of a cervical cancer vaccine, Cervarix, to compete with Merck's [MRK Loading... () ] Gardasil which has had a huge head start. In very early trading, the market doesn't seem impressed or, at least, it is unfazed by the selection.

(GSK)

Loading... (%)

And the same could be said about investors' reaction to the tenure of the new CEO at the world's biggest drug company, Pfizer [PFE Loading... () ] . In a research note to clients this morning titled, "The Pfirst Year", Deutsche Bank pharma analyst, Barbara Ryan, observes (in a run-on sentence), "The market remains unimpressed with PFE's actions to date and we continue to believe that it will not reward the stock with a multiple until an acquisition is made which provides the means to dilute the company's dependence on Lipitor, and loads in a substantial earnings bump from synergies, which will provide the visibility on what will fill the revenue and earnings cliff resulting from the loss of Lipitor exclusivity."

The "loss of Lipitor exclusivity" is a euphemism for the drug losing its patent, going generic in a few years. Referring to the date that will happen, Ryan concludes, "As things stand now, there are about 900 shopping days (for an acquisition) left. While the first year has clearly been directionally positive under new management, we believe it's the next one that will be critical in determining PFE's outlook over the next five years."

The bottom line, though, says Ryan, "...the phase 3 (late-stage drug development) oven is empty."

Deutsche Bank [DB Loading... () ] owns at least one percent of PFE, makes a market in the stock and wants to do investment banking for the drugmaker. And if Ryan's analysis is accurate, Deutsche could soon get that opportunity. "Some highly bankable revenues must be added," she says.

Coincidentally, as soon as I finished writing this entry, this bullet crossed the Reuters wire attributed to "traders:" "Sanofi shares rise 2 pct on market talk Pfizer looking to buy L'Oreal, Total stakes in Sanofi." Sanofi [SNY Loading... () ] is the only big pharma stock trading higher this morning.