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Comings & Goings at Pfizer & Glaxo

This morning, the world's second biggest drug company, GlaxoSmithKline , 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 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.

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And the same could be said about investors' reaction to the tenure of the new CEO at the world's biggest drug company, Pfizer . 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 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 is the only big pharma stock trading higher this morning.

Questions? Comments? Pharma@cnbc.com

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