Wyeth Sees Deals Ahead Despite Generic Competition

The chief executive of Wyeth said on Wednesday the U.S. drugmaker's strong cash position could enable it to make new biotech acquisitions despite competition from generic drugmakers for several of its biggest products.

Bernard Poussot, speaking at a Goldman Sachs health-care meeting, noted that many of the company's top-selling products are biotech medicines—large proteins made in living cells that are becoming a lucrative mainstay of treatment for a wide range of diseases.

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The global recession has caused valuations of many biotechs to shrink dramatically in the past year, making the tiny companies more tempting prey for large drugmakers.

Poussot said Wyeth , with $14 billion in cash, is in good shape for acquiring "attractive technologies."

"Our goal is to deliver reliable and sustainable growth over the years," he said. "To achieve that, our best strategy is to build one of the most global diversified biopharmaceutical companies."

Other large drugmakers, including Pfizer and Merck , have also said that falling prices of biotechs could make them riper for the picking.

In the meantime, Poussot said Wyeth—whose drugs tend to treat symptomatic illness—seems to be more "recession-proof" than rival drugmakers whose products treat chronic ailments like high cholesterol or blood pressure that are often asymptomatic.

Poussot also predicted that an improved form of Wyeth's blockbuster Prevnar vaccine to prevent infant and child infections with pneumococcal bacteria may be approved in the United States this year.

The new product, called Prevnar 13, is designed to protect against 13 strains of the bacteria—which cause ailments ranging from ear infections to pneumonia—and confer greater protection than the current seven-strain vaccine.

Wyeth plans to seek U.S. approval of Prevnar 13 by March, he said, for use in infants and young children. The company is also testing the new product in adults, a potential big new market for the Prevnar franchise.

Wyeth earnings have been hurt by the unexpected launch early last year of a generic form of its Protonix ulcer medicine. Moreover, its $4 billion-a-year Effexor XR depression drug is now facing competition in Europe from cheaper generics and will lose patent protection by 2010 in the crucial U.S. market.

Poussot predicted, however, that growing sales of Prevnar, arthritis drug Enbrel and other core products—including Wyeth's infant formulas—will ensure "significant" company growth in years to come despite expected plunging sales of Effexor XR.

Many investors apparently share Wyeth's optimistic stance, given the stock's relatively better performance over the past year than the drug group.

Shares of Wyeth have fallen about 13 percent in the past 12 months, compared with a 21 percent decline for the American Stock Exchange Pharmaceutical Index of large U.S. and European drugmakers.

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