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
TheStreet Open House

Wyeth Deal's Big, but Pfizer Still Needs a Blockbuster

With its pending acquisition of Wyeth (WYE) for some $68 billion in cash and stock, Pfizer (PFE) is looking a bit like the pharmaceutical equivalent of the New York Yankees.

A big-market, wealthy team, the Yankees haven't won a World Series since 2000. In trying to recapture past glory, they have invested heavily in veterans and youngsters alike who frequently failed to live up to expectations.

For Pfizer, instead of a roster filled with aging players with diminishing skills, the drugmaker has an aging pipeline with a roster of former stars that have lost patent protection or will lose exclusivity in the near future. Internal R&D and collaborations haven't produced enough big winners, and Pfizer certainly hasn't been able to match the success it has had with Lipitor.

Lipitor, a cholesterol drug that is the world's top-selling medication, was acquired in the blockbuster acquisition of Warner-Lambert, which just happened to be the same year as the Yankees' last World Series victory. The approaching trouble is that Lipitor loses U.S. patent protection in late 2011, taking out 26% of corporate sales. Lipitor produced $12.4 billion in sales last year, down 2% from 2007.

For several years, generic competitors have been eating into sales of former Pfizer hits such as the blood pressure drug Norvasc, the cancer drug Camptosar, the allergy drug Zyrtec and the antidepressant Zoloft. At the same time, Pfizer has endured disappointments with failed products -- the inhaled insulin Exubera and experimental compounds, most notably the cholesterol drug torcetrapib, come to mind.

What Wyeth brings is a roster mixed with solid performers, untested products, aging drugs nearing patent expiration and assorted role players that will probably be shed. The question is whether Wyeth in the end offers enough to help Pfizer get back to championship form.

Investors didn't appear to have much faith that that would be the case, at least in the early going. Shares of Pfizer fell 10.3% to $15.65, while Wyeth edged down 0.8% to $43.39 after spending much of the session in positive territory.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs