Pf***ed

Sorry for the lack of posts, readers! I’m really busy on the home-stretch of that Top Companies special issue. Gotta finish the final profile today, so’s I can head to the shore tomorrow without worrying about it.

I decided to save the biggest one for last: Pfizer. As you may not care from last year, Pfizer is the biggest of the Big Pharmas, but it’s also got a ton of vulnerabilities, as many of its big sellers are getting hit with patent expirations and generic competitors. Here’s a little bit of this year’s report, just so you know I’m not slacking off from VM for no reason:

In his 2005 letter to shareholders, Pfizer chairman and chief executive officer Hank A. McKinnell, Jr. wrote, “The Pfizer built in the 1990s is fading away as some of our prominent, current medicines lose patent protection. This transformation process—this cycle of renewal—is not unexpected. We have been planning for it for years, understanding that while renewal brings challenges, it also creates numerous opportunities.”

That’s quite an understatement. Last year, we pointed out that many of Pfizer’s top sellers are going to lose patent protection in the next five years. The company got a feel for what’s on the way when epilepsy treatment Neurontin went generic during 2005; the drug’s sales dropped from $2.7 billion to $640 million. Antifungal treatment Diflucan did the same, shedding $445 million in sales.

With $1.3 billion of Bextra sales vaporized in 2005, and Celebrex shedding another $1.6 billion, Pfizer needed to add $6.1 billion in sales last year just to keep pace. That’s more revenue than any of the bottom three companies on our list generated in 2005.

And with Zithromax facing its first full year without U.S. patent protection ($2.0 billion in 2005 sales, after its patent expired in 4Q2005), Zoloft ($3.3 billion) going generic in June 2006, and Norvasc ($4.7 billion, the company’s #2 seller) and Zyrtec ($1.3 billion) set to lose protection in 2007, Pfizer needs to generate huge amounts of new revenues.

It fell short in that mission in 2005, with drug sales falling $2.0 billion in 2005. They’re down $394 million in 1Q2006 (-4%).

Tune in next year to find out if Pfizer manages to recoup sales with Lyrica, Sutent, Chantix, and a million other new drugs!

Till then, back to work. Then play!