Elsevier Business Intelligence
$2,230 A YEAR
PRESCRIPTION PHARMACEUTICALS AND BIOTECHNOLOGY Founded 1939 | Vol. 73, No. 6
february 7, 2011
top stories Litigation When Will FDA Apply The Park Doctrine? Almost a year after signaling its intent to target more executives with misdemeanor prosecutions when their companies have broken the law, FDA has published its criteria for pursuing such cases. Evidence that an executive played a role in or had knowledge of the ongoing violation is not necessary, FDA says............... 19
European Update Swiss Pharma Seeks Policy Changes The Swiss pharmaceutical industry is seizing upon the deficit that hit the country’s drug sector in 2010 – the first in nearly 50 years – to launch a campaign against the policies of the Swiss Federal Office of Public Health. Price revisions, patent expirations, and generic competition contribute to the bleak picture.............................14
Business & Finance Pharma Looks To Share Buybacks Pfizer’s plan for an enormous, near-term share repurchasing program caught investors’ attention and highlighted a persistent, if sometimes muted, ongoing debate in the industry about the best use of its cash.......................................................7
Health Reform Schedule For Drug Fee Estimates Slip The IRS pushes back some of the implementation deadlines for the new market share-based fees on drug manufacturers by a couple of weeks to accommodate issues raised in response to its November guidance................................................. 11
Table of Contents > 3
Reading Into Pfizer’s Changes: First Steps For New CEO Jessica Merrill j.merrill@elsevier.com
P
fizer Inc.’s new CEO Ian Read came out of the gates strong during the company’s year-end financial presentation Feb. 1, with news that investors greeted warmly: additional, unexpected cuts to R&D and further R&D reorganization, a $5 billion share buyback program, and assurance that all options are on the table when it comes to Pfizer’s diversified portfolio of businesses. Pfizer’s stock closed the day up 5% at $19.22, though the boost isn’t likely to linger. Read has enormous work ahead if he is to turn around the struggling drug giant, which is facing the loss of exclusivity of its top-seller Lipitor (atorvastatin) in the U.S. in November. Lipitor is already generic in some parts of the world, which pushed down its sales by 6% to $10.73 billion in 2010. The quarterly presentation marked Read’s first public comments to investors since taking over the CEO Pfizer CEO Ian Read post from Jeffrey Kindler in a sudden transition in December (“Pfizer Turns To Insider Ian Read To See It Into Post-Lipitor Era,” “The Pink Sheet” DAILY, Dec. 6, 2010).
Pfizer Lowers Costs With An Eye On EPS Read outlined plans for lowering expenses, namely in R&D – cuts that along with the share repurchase program will help to assure investors Pfizer will meet its earnings forecast in 2012, the year the financial impact of Lipitor will truly hit. Management reaffirmed its 2012 adjusted diluted EPS target of between $2.25 and $2.35 per share.
Pfizer’s 25% reduction in R&D spending could spark scrutiny of other companies’ research budgets. However, the company lowered its 2012 revenue target to between $63 billion and $65.5 billion from a previous target of $65.2 billion and $67.7 billion. The lower revenue estimate isn’t altogether surprising. Analysts have long questioned how Pfizer would meet targets it laid out when it announced the Wyeth acquisition, given the loss of Lipitor and a dearth of new products to replace Story continues > Page 4
To sign up for FREE ONLINE ACCESS, go to: http://ThePinkSheet.ElsevierBI.com