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Pfizer Inc. Message Board

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  • fizrwinnr11 fizrwinnr11 Jan 11, 2011 12:34 PM Flag

    PFE is betting on which new drugs for growth?

    Consensus non-GAAP earnings estimates currently are:

    $2.22 in 2010
    $2.29 in 2011
    $2.22 in 2012
    $2.30 in 2013


    As you see, there isn't much of a "cliff" in trough year 2012 when the brunt of the Lipitor expiration will be seen.

    After the month of September 2012, there are only a few big patent expiration losses all the way out to the year 2012. To wit:

    Celebrex will be lost in mid-2014.

    Zyvox's domestic patent expires in May 2015

    Lyrica's domestic patent expires in early 2018.



    And that is IT. The ONLY reason why earnings haven't been more robust the last several years is that one after the other the company lost starting in late 2004:

    1) Neurontin (late '04)
    2) Zithromax (late '05)
    3) Zoloft (mid '06)
    4) Norvasc (early '07)
    5) Zyrtec (early '08)

    In addition, the company lost 60% of its one-time Cox-2 portfolio when Bextra got yanked and Celebrex was impaired after a clinical trial.

    A company just can't have such substantial clustered losses and hope to show nice earnings gains.

    But in the ABSENCE of such losses, even the worst pharma can grow nicely.

    I would highly recommend that you take a careful look at Page #9 of the company's latest 10-Q report. You will see a LOT of drugs coming off patent in 2011/2012 but only those few I mentioned thereafter.

    And that makes all the difference in the world once the expiring patents have gone through the system and then there is an extended period of very few losses to expiration.

    It's that paucity of patent losses beyond Sept. 2012 that assures Pfizer's bright future. But the tunnel-visioned analysts are too preoccupied with the Lipitor expiry to see what great growth there is just beyond their very limited horizon.

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    • optionsalchemists2077 optionsalchemists2077 Jan 11, 2011 2:07 PM Flag

      > Consensus non-GAAP earnings estimates currently are:

      $2.22 in 2010
      $2.29 in 2011
      $2.22 in 2012
      $2.30 in 2013
      -------------


      ===============================================================
      Re: Defaulting to erroneous conclusions 16-Jul-07 03:07 am

      Obviously PFE will make up for a good chunk of the lost Lipitor revenues by simply making acquisitions. They have over $22B in the till and even if they pay four times revenues, it's still over $5B of the $11.6B Lipitor losses.

      How does PFE make up for the rest of the losses? By intrinsic growth of the NON-LIPITOR sector which had $35B in revenues last year. In a year like 2010 with only $0.2B in non-Lipitor losses to patent expirtions, there will be MASSSIVE revenue growth in this component. Factor in at least 4% in just annual price increases, add new product introductions that year, ramp-ups in recently-introduced drugs, population growth, new indications for existing drugs and new inlicensing agreements and then deduct just $200M in losses to patent expirations and you see how in just that one year 2010 there will be $3B or more in revenue gains from that sector.

      Pretty much the same thing happens in 2011. There will be $1.2B in patent expiration losses that year instead of $0.2B as in 2010 but 2011 begins the time when hordes of baby boomers start turning 65. And that's the yeer when management thinks that the company's current early-stage pipeline will really start bearing fruit. Well over $2B in non-Lipitor revenue increases should be seen that year.

      And there will be further revenue increases in the non-Lipitor component in 2012 as more baby boomers turn 65, there's more business from China and India and the company introduces more new drugs.

      In short, the non-Lipitor revenue gains in 2010-2012 coupled with acquisitions that should provide $5B or so of revenues per year should make up every bit of the revenues lost to patent expirations in that period.

      I see 2012 earnings of $2.60 per share or so and revenues around $50B. The company should certainly warrant a multiple at that time in line with LLY's current 17 because they figure to be growing so fast in the post-2012 years with their fabulously-favorable patent expiration schedule. That makes PFE a mid-40's stock in 2012.

      A reasonable discount rate of 7% puts fair value next year in the low-to-mid 30's.


      chrt13
      ====================================================

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

      "I see 2012 earnings of $2.60 per share or so and revenues around $50B."

 
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