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Pfizer Faces Hazy Future Beyond Lipitor

NEW YORK ( TheStreet) -- Nov. 30 was a big day in the drug industry.

For years it's been marked in the calendars of generic drug makers, Wall Street analysts, and of course, Pfizer (PFE - Get Report), which lost exclusivity of its most successful drug, the cholesterol fighter Lipitor, on that date.

Now the Dow component is trying to hang onto market share, offering direct mailing of the medication through its Web site and working with insurance companies to offer Lipitor at a discounted price, but Wall Street seems to see this as a losing battle.

"Everyone's numbers have taken Lipitor out," said Miller Tabak's Les Funtleyder, referring to the financial projections of his fellow analysts.

Once a drug's patent expires, there is a six-month exclusivity period where the generic company that files first is able to produce its version. Pfizer made a deal with Watson Phamaceuticals (WPI) where Pfizer makes and supplies Watson with an authorized generic version of Lipitor and Pfizer gets a portion of the sales. This agreement lasts until Nov. 30, 2016.

Pfizer and Watson are competing with Teva Pharmaceutical (TEVA - Get Report) which has an agreement with Indian drug maker Ranbaxy, who was first to file. Teva gets some of Ranbaxy's profits from the sale of its generic version of Lipitor called Atorvastatin.

Some analysts estimate that Pfizer may be able to hold onto as much as 40% market share in the six-month exclusivity period. At the discounted price that Lipitor is being sold, the company stands to make $1 billion in revenue in that six-month time frame, according to Jeff Jonas, an analyst at Gabelli. Once that six months ends though, Jonas expects Pfizer to see only a "token amount of revenue" coming from consumers who "absolutely insist on the brand."

So what's the future of Pfizer beyond Lipitor?

The company expects "rapid erosion of Lipitor revenue and volume share in the U.S.," according to a spokeswoman, adding that in other markets the decline "may be more gradual."

Pfizer is hoping revenue from new products such as Enbrel, a treatment for autoimmune disorders, Lurica, a fybromyalgia drug, and Prevnar 13, a pediatric vaccine for pneumococcal bacteria, will pick up some of the slack in 2012. It's also counting on topline contributions from the product portfolio of King Pharmaceuticals, which was acquired earlier in 2011.

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