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No Easy Fix for Pfizer

A mixture of disappointing deals, poor marketing and bad luck, unfolding during a plague of patent expirations, has put long-term investors in Pfizer (PFE - Get Report) in a bind and analysts in a surly mood.

Over the past five years, Pfizer's stock is down 28%, lagging both the S&P 500-stock index and the Amex Pharmaceutical Index, which contains Big Pharma stocks, including Pfizer.

Even under Jeffrey Kindler, who has been restructuring the company since becoming CEO in July 2006, shares are off 15% in the last 12 months.

While analysts have been grumbling, however, drug-industry management experts are more optimistic -- or at least less anxious -- about Pfizer's turnaround prospects, given its financial strength and still-strong credit rating.

"It's fixable. They have tons of cash sitting in the bank," says Prof. Mahmud Hassan, director of the pharmaceutical MBA program at Rutgers, the state university of New Jersey, who tells investors to be patient.

"Most investors are myopic," he says. "Look at the Vioxx situation. When people saw Vioxx wasn't as big a problem as they thought, Merck's (MRK - Get Report) stock picked up."

Merck and Schering-Plough (SGP), which is cleaning up past regulatory problems, have had more dramatic setbacks than Pfizer, but they have since become more attractive to Wall Street.

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