Pfizer Loses Patent Protection on This Blockbuster Drug

Pfizer (NYSE:PFE) loses patent protection on its cash cow cholesterol buster Lipitor today. Generic manufacturers such as Ranbaxy Labs and Watson Pharma (NYSE:WPI) are waiting in the wings to launch their versions of the drug.

Watson starts shipping today and Ranbaxy is waiting for the USFDA’s green light. Pfizer is responding by entering into exclusivity tie-ups with insurers and pharmacy managers in return for supplies at a lower price. “They’re trying to avoid just a total collapse, since the U.S. is such a big market,” said Christopher Bowe, an analyst with Informa-Scrip Intelligence in New York.

Pfizer (NYSE:PFE) is putting on a brave front. “We’re not going to be a one-product company,” said Geno Germano, Pfizer’s president of specialty care and oncology, interviewed at the company’s New York headquarters. “We’re poised to deliver significant new pipeline assets in the coming year, and in coming years.”

The drug maker is likely to generate $4 billion in sales by 2014 from four new products – Prevnar, a bacterial infection vaccine, the blood thinner Eliquis, tofacitinib, a rheumatoid arthritis drug, and Xalkori, a lung cancer drug.

The company is also planning to put on the block its animal health and nutritional businesses, which could likely generate cash of as much as $22 billion. Pfizer has also reduced expenditure on R&D from $9.34 billion in 2010 to $6.46 billion by 2013.

Time will tell whether these measures can really make up for Lipitor’s absence as a major revenue earner for Pfizer.

Here’s how Pfizer is trading on the news:

Pfizer Inc. (NYSE:PFE): PFE shares recently traded at $19.96, up $0.56, or 2.89%. They have traded in a 52-week range of $16.42 to $21.45. Volume today was 15,461,972 shares versus a 3-month average volume of 46,488,300 shares. The company’s trailing P/E is 13.86, while trailing earnings are $1.44 per share.