Pfizer's Chantix Woes Bash High Hopes

"PFE faces a host of well-known problems, including declines of lead drug Lipitor and a host of future patent expiries that by our analysis puts PFE among the three worst-positioned drug names through 2015," Bernstein Research analyst Tim Anderson wrote late last month. "As if this wasn't enough already, one of PFE's more important newer drugs -- Chantix, for smoking cessation -- is now seeing usage of the product drop sharply."

(One of Anderson's research assistants owns Pfizer's stock; Anderson himself has a tepid market-perform rating on the name.)

Double or Nothing

Early on, Pfizer itself placed a high-stakes bet on Chantix.

For years, Pfizer had operated a big consumer healthcare division that sold (among other things) nicotine gum and patches. Just a month after winning approval of Chantix, however, Pfizer agreed to sell that huge business in 2006. The company became a bit more dependent on Chantix in the process.

Although Pfizer gave up on torcetrapib, a potential replacement for Lipitor, the company did manage to introduce four new drugs in 2006. In addition to Chantix, Pfizer started selling Sutent for cancer patients and Eraxis for serious infections.

It started marketing Exubera -- hailed as a breakthrough for diabetes patients -- as well. With high hopes, Pfizer trained 2,300 salespeople to peddle its new insulin inhalers. Six months after Exubera hit the market, however, critics were already declaring it a disaster.

"I think Pfizer will wish they had never gotten into this," the incoming president of the American Diabetes Association told the Associated Press in March of last year. "I doubt they'll regain their investment.