Recs

0

Waiting for Wyeth

Parents and doctors like to keep kids healthy, which is why Wyeth's (NYSE: WYE  ) Prevnar vaccine for infants and toddlers is a powerful draw. But yesterday, the drug maker announced a "temporary delay" in Prevnar shipments as it works to make some changes to its quality-control processes.

The vaccine is used to prevent pneumococcal infections in children, such as meningitis, pneumonia, and blood infections. It is included in the battery of immunizations for infants and toddlers, and there's no small amount of demand.

Over the last several years, Wyeth was unable to meet demand for the vaccine and ramped up production earlier this year, resulting in a significant boost of the product's sales in the third quarter. According to the company, the current delay is not expected to have an impact on Wyeth's financials.

Reuters reported that the move to upgrade quality assurance was voluntary and not the result of a Food and Drug Administration directive to straighten up. In Wyeth's press release on the matter, the company sought to comfort investors with assurances that this will not result in a shortage, and that this development does not imply any questions about the safety or effectiveness of the vaccine.

However, the delay does make one wonder: Why is this upgrade happening now instead of prior to the manufacturing ramp-up months ago?

Although the delay may not affect revenues for this $1 billion-per-year vaccine, it's disconcerting nonetheless. While stepping up quality control is certainly a case of better late than never, a delay before the season when illnesses crop up more frequently makes one wonder whether somebody dropped the ball.

This isn't the only distraction facing Wyeth's management. Just a few weeks ago, the company voiced the possibility that it may have to sock away some cash in case it faces new allegations related to its old weight-loss product, Fen-phen. And the company has partnered with MedImmune (Nasdaq: MEDI  ) on the Flu-Mist product, which looks like it could falter in its launch year due to a few hurdles such as a high price and losing its distribution deal with Wal-Mart (NYSE: WMT  ) .

Wyeth's going to have to step carefully to avoid giving investors a shot of uncertainty.

What do you think about Wyeth's recent woes? Tell your fellow Fools in the Wyeth discussion board.

Alyce Lomax welcomes your feedback at alomax@fool.com.


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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

DocumentId: 499933, ~/Articles/ArticleHandler.aspx, 5/21/2012 2:09:26 AM

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 2 days ago Sponsored by:
DOW 12,369.38 -73.11 -0.59%
S&P 500 1,295.22 -9.64 -0.74%
NASD 2,778.79 -34.90 -1.24%

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

12/31/1969 7:00 PM
WYE.DL $0.00 Down +0.00 +0.00%
Wyeth CAPS Rating: ***
WMT $62.43 Up +0.75 +1.22%
Wal-Mart Stores CAPS Rating: ****

Advertisement