Pfizer analysts expected to question 2012 forecast

Pfizer analysts expected to question 2012 forecast

New York: Pfizer Inc’s new boss, Ian Read, will likely be asked on Tuesday to defend the company’s 2012 forecast, which suggests stable profits even as the drugmaker’s $10 billion-a-year Lipitor cholesterol fighter faces its first full year of competition from cheaper US generics.

“I don’t think the forecast is do-able, from the pure math of billions of dollars in Lipitor sales going down the tubes," said Matt Loucks, senior investment manager of Sit Investment Associates in Minneapolis.

Investors also expect Read, who took charge of Pfizer in December after the surprise resignation of Jeffrey Kindler, to provide a profit forecast for 2011 and perhaps announce a new share-repurchase plan when the company reports fourth-quarter earnings on Tuesday.

In 2009, Pfizer bought US rival Wyeth and its array of medicines for new revenues and huge merger-related cost savings that will cushion the blow when Lipitor’s US patent lapses in late November.

Late last year, the company affirmed its 2012 profit forecast of $2.25 to $2.35 per share.

“I think the 2012 forecast will be tough to hit," said Jon LeCroy, an analyst with Hapoalim Securities, who predicted it will be a focal point when Read and other Pfizer executives hold a conference call with analysts after reporting quarterly results.

The drugmaker is expected to post somewhat weaker fourth-quarter earnings, in contrast to higher earnings seen in the first three quarters of 2010.

Wall Street is hoping Pfizer, whose laboratories have failed to produce many big-selling medicines over the past decade, will shed more light on a handful of promising experimental treatments now in late-stage trials.

They include an oral treatment for rheumatoid arthritis, a blood clot preventer being developed with Bristol-Myers Squibb and new types of cancer treatments.

Although most of those drugs have potential to capture “blockbuster" annual sales of $1 billion or more, LeCroy said there aren’t enough of them to greatly improve the near-term prospects of Pfizer -- which has annual sales of about $65 billion.

Asked if a big share-repurchase program, perhaps in the $10 billion range, would bolster investor enthusiasm, LeCroy said: “You’re talking about such a massive company that little things like that don’t make a huge difference. It would be more sentiment than anything."