Pfizer Doesn't Like Reruns

When it rains, it pours.

Pfizer (NYSE: PFE  ) has had a rough start to 2009, losing nearly a quarter of its value after announcing that it was acquiring Wyeth (NYSE: WYE  ) . Things didn't get any better on Tuesday when the company announced that it plans to cut two phase 3 drugs after reviewing data and "current market dynamics."

That's pharma-speak for "the drugs don't look like they'll have enough activity to be a marketing success." Too bad the company didn't figure that out about Exubera, its failed inhaled insulin product, before sending so much money to Sanofi-Aventis (NYSE: SNY  ) to acquire it.

Pfizer axed PD 332,334 for generalized anxiety disorder and esreboxetine for fibromyalgia. Part of the reason that the company decided to ditch the compounds was probably because it already has a fibromyalgia treatment in Lyrica, which is also in clinical trials for anxiety disorder. The competition for fibromyalgia patients has become more intense since Cymbalta from Eli Lilly (NYSE: LLY  ) was approved last year, and Forest Laboratories (NYSE: FRX  ) and tiny Cypress Bioscience's (Nasdaq: CYPB  ) Savella was approved last month. Adding another me-too compound might just suck sales away from Lyrica.

Not every drug that enters phase 3 clinical trials is going to make it to market, but Pfizer seems to have had more than its fair share of failures lately. It killed a drug for pancreatic cancer earlier this year and an obesity drug late last year.

The good news for investors is that, just like adding one product doesn't move the company's $48 billion revenue needle up very much, the loss of a couple of potential drugs won't hurt growth much, either. In fact, shares of Pfizer ended up yesterday, probably thanks to Fed Chairman Ben Bernanke calling the market bottom.

I'm not willing to call the bottom on Pfizer just yet, but cutting those two programs only added a couple of raindrops to the thunderstorm.

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