This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Clouds Loom for Big Pharma

As big drug company executives look forward to next year, they can count on one big plus. John Kerry won't be president. And if you give them a few minutes, maybe they can think of something else.

Big Pharma enters 2005 with big problems. For example, there's legal uncertainty for Merck (MRK - Get Report), because it withdrew the arthritis drug Vioxx from the market.

And for most of 2004, the biggest future uncertainty for Pfizer (PFE - Get Report) was how to come up with big new drugs to drive growth at the biggest pharmaceutical company.

Now the greatest uncertainty is a review by the Food and Drug Administration of its arthritis drugs Celebrex and Bextra. That's because one clinical trial for each of the medications said they pose a higher risk of cardiovascular problems. These drugs are COX-2 inhibitors, the same class of drug as Vioxx. Pfizer is keeping them both on the market as the FDA urges doctors to consider restricting their use.

There's also reputation-repair uncertainty for several companies, whose stocks have been pounded in recent years, as they try to attract Wall Street's attention in a positive way.

Meanwhile, the key issues that analysts cited for choppy stock performances leading up to the presidential election haven't gone away. Wall Street drug watchers said George W. Bush would be better for Big Pharma: He's back, and so are a host of unresolved matters, such as drug reimportation; consumer complaints about drug prices; regulatory rule-writing for Medicare drug coverage; and political pondering about the Food and Drug Administration's effectiveness.

As for broad themes, Moody's Investors Service says R&D will play an increasingly important role for U.S. and European drug giants during the rest of the decade "as more blockbuster products go generic, pinching revenues and margins."

Sick List
Worst-performing drug companies in 2004
Company & Ticker Dec. 27 Closing Price Change
Merck MRK $31.95 -30.80%
Forest Laboratories FRX $45.26 -26.80%
Pfizer PFE $26.50 -25.00%
Amex Pharmaceutical Index 315.15 -6.10%
Source: TSC Research
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
FRX $99.00 -0.77%
BMY $67.48 0.00%
JNJ $98.44 0.00%
LLY $86.14 0.00%
MRK $57.67 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs