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Triage Trade: Pfizer

Wednesday, 9 Apr 2008 | 6:33 PM ET

Pfizertreats us for everything from high cholesterol to impotence, but in an ironic twist it’s very sick itself. You might even say Pfizer shares are in a coma; down to levels not seen since 1997.

What's ailing the nation's biggest drug producer? Clogged pipelines. Its $13 billion cholesterol fighter Lipitor will lose patent protection in 2010. And Viagra's patent dies in 2012.

The pulse of the stock --- its price-earnings multiple--- has dropped so low investors are pricing the shares as if the company has one foot in the grave already.

CEO Jeffrey Kindler grabbed the paddles and is trying to revive the company by shedding jobs and buying back stock but so far the prognosis is not good. What’s the prescription for getting shares of Pfizer out of triage?

Guy Adami has a 3 step treatment plan.

1. Start playing offense
2. Put great balance sheet to work
3. Immediately stop “Viva Viagra” ads

I’d like to see Pfizer buy Cephalon, suggests Adami.

Or they could acquire Myriad , Biogen or even Bristol Myers, adds Pete Najarian.

Whomever they buy I really do think some sort of acquisition is in their future, Adami concludes.



Read More

> Triage Trade: Starbucks

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Trader disclosure: On Apr .9, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AAPL), (AMR), (BIIB), (CSCO), (NOK), (TSO), (XLF), (YHOO), (EMC), (WLT); Najarian Owns (CHK) Calls, (COP) Calls, (MSFT) Calls, (SLB) Calls; Najarian Owns (LEH) Puts, (OIH) Puts; Macke Owns (YHOO), (INTC), (DIS), (MSFT); Seymour Owns (AAPL), (BX), (CHL), (CSCO), (INTC), (MSFT), (SBUX), (TSO), (TIE); Seygem Asset Management Owns (COP)

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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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