Pfizer Takes the Plunge Into Stem-Cell Research

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Hey, Geron (Nasdaq: GERN  ) and StemCells (Nasdaq: STEM  ) . Do you hear those footsteps? That's giant Pfizer (NYSE: PFE  ) . It's off in the distance, but it's coming for you.

The world's largest drugmaker by market cap announced today that it's forming a unit to focus on stem cells. Small biotechs shouldn't be honing their slingshot skills to take down Goliath quite yet, though: It sounds like there might be gold falling out of the giant's pockets. Pfizer says the new unit will work on "several significant scientific collaborations."

Now may not be the perfect time to jump on the stem-cell bandwagon. It seems to me there are still a lot of details to be worked out before using stem cells as therapies. But Pfizer has to take this risk with the impending loss of Lipitor. GlaxoSmithKline (NYSE: GSK  ) , which has also had rather stale growth lately, recently jumped in as well,  announcing a partnership with the Harvard Stem Cell Institute.

Stem cells should make a more immediate impact as research tools to help drug development. In fact, pharmaceutical companies on both sides of the Atlantic, including Pfizer, Johnson & Johnson (NYSE: JNJ  ) , and Sanofi-Aventis (NYSE: SNY  ) , have joined forces to fund stem-cell initiatives as well as to help set up model systems to determine if drugs are safe before starting clinical trials.

But preventing side effects isn't exactly sexy, and it only has an indirect effect on the bottom line. Pfizer needs to get revenue growing -- especially after the inevitable drop when Lipitor faces generic competition -- and that's what this announcement is really about. When you're as big as Pfizer, you've got to plant a lot of beanstalks and hope that something grows into a blockbuster.

More Foolishness:

Pfizer, Glaxo, and Johnson & Johnson are all Income Investor recommendations. To see how dividend-paying stocks can offer both secure income and the opportunity for growth, take a free look at this newsletter with a 30-day trial. 

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value recommendation, and the Fool owns shares of Pfizer. The Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (13)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 776538, ~/Articles/ArticleHandler.aspx, 10/25/2016 8:34:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
PFE $32.28 Up +0.15 +0.47%
Pfizer CAPS Rating: ****
GERN $2.07 Down -0.07 -3.27%
Geron CAPS Rating: ***
GSK $40.32 Down -0.36 -0.88%
GlaxoSmithKline CAPS Rating: ***
JNJ $113.96 Up +0.35 +0.31%
Johnson and Johnso… CAPS Rating: ****
SNY $37.39 Down -0.37 -0.98%
Sanofi CAPS Rating: *****
STEM $0.93 Up +0.01 +1.31%
StemCells CAPS Rating: *