Pfizer Inc will likely slash staff and accelerate merger and licensing deals as the pressure on it to improve its financial performance intensified after the weekend's announcement that the company ended development of a key drug, analysts said.
Analysts differed on how much they believed Pfizer stock would fall when it opened yesterday. Barbara Ryan, an analyst at Deutsche Bank, said she believed the dividend yield of roughly 4 percent would keep shares from a free fall, but another analyst estimated the stock could plunge to US$20 a share.
Shares of the New York-based company declined by US$4.13 to US$23.73 in early trading yesterday on the New York Stock Exchange.
Pfizer, the world's biggest drugmaker, ended development of its most important new drug, a cholesterol medicine designed to replace Lipitor when its patent expires.
Pfizer ended clinical studies of the cholesterol pill torcetrapib on Dec. 2 because fatalities among patients taking it were 60 percent higher than in the group who didn't get the drug.
"This is obviously unfortunate because this was the biggest opportunity in their pipeline," Ryan said. "Clearly there is more pressure on them to do cost cutting."
Ryan said Pfizer, which employs roughly 100,000 people, may lay off as many 10,000 people in the near future. Ryan added that she expects Pfizer to hike its annual dividend from US$0.96 to US$1.10 per share in the next few weeks in the hope of putting a floor on the stock.
But Jason Napodano, an analyst at Zacks Independent Research, doesn't think the yield will be enough to prop up the shares. He points out that at the end of last month, Pfizer pulled out of its deal with drugmaker Organon to develop schizophrenia treatment asenapine.
Napodano said he expected the drug to add US$500 million in sales by 2010 while by that time torcetrapib's sales would total US$3 billion.
"Losing asenapine was a hole in the boat. Now they have hit an iceberg," Napodano said.
Ryan and Napodano both expect Pfizer to act swiftly to bring new products into the fold, either through acquisition or licensing. But Napodano said that until investors see what those products are, he sees little reason to buy the stock. He said he intends to review his "hold" rating on the stock.
The loss of torcetrapib thrust chief executive officer Jeffrey Kindler, a former McDonald's Corp executive who took the Pfizer helm in July, into one of the biggest financial crises in the company's 157-year history. Pfizer invested US$1 billion in developing the medicine and needed it to replace cholesterol drug Lipitor, the source of a quarter of its US$51 billion in annual revenue and almost half of net income, when the patent expires in four years.
"The new CEO basically will have to buy his way out of trouble," Navid Malik, an analyst with Collins Stewart Holdings Plc, said in a telephone interview from London on Sunday.
"When you get to 2010 and 2011, you are facing a cliff where Pfizer sales are going to drop quite dramatically," Malik said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained