What's the Key Driver Behind Pfizer's Share Price?

Investors in pharmaceutical stocks are all too familiar with the volatility that can be caused by the outcome of clinical trials. Sometimes it can be extremely positive news that causes shares to kick on to new highs, while at other times it can be disappointing news that leaves investors feeling despair at the falling share price.

This, it seems, simply comes with the territory of investing in pharmaceutical stocks. However, sometimes disappointment from a clinical trial can have a rather mooted effect on the share price. For instance, Pfizer (NYSE: PFE  ) announced last week that a possible treatment for an advanced form of lung cancer missed its primary objectives in a couple of late-stage studies.

The drug in question is called Dacomitinib, and it was unable to show a statistically significant improvement in progression-free survival when compared with another drug, Erlotinib. This occurred in two separate studies (although in the second study a placebo was used instead of Erlotinib), and the disappointing thing about the two trials is that they were both late-stage trials.

Therefore, this is one of the final hurdles before submitting the drug for approval, and to obtain such results from two trials is disappointing to say the least.

However, shares didn't react too strongly to the news, possibly because Pfizer announced that it's still waiting for the results of a third trial involving the drug. These results aren't due out until 2015, which should give Pfizer time to move further down the line with the restructuring it discussed in its recent fourth-quarter results.

While there was disappointment for Pfizer, pharmaceutical peer GlaxoSmithKline (NYSE: GSK  ) has enjoyed something of a purple patch at the start of 2014, as it has received positive news flow for three different drugs thus far.

The first was HIV treatment Tivicay, which the European Commission granted approval for use by adults and adolescents above 12. The second was Eperzan, which received a positive opinion from the Committee for Medicinal Products for Human Use in Europe, while the third was the meeting of the primary endpoint by a combination of Tafinlar and Mekinist in a phase 3 trial.

GlaxoSmithKline isn't the only pharmaceutical company that's had some encouraging news flow with regard to its drug pipeline in 2014. The diabetes alliance between Bristol-Myers Squibb (NYSE: BMY  ) and AstraZeneca (NYSE: AZN  ) , which has now been bought outright by AstraZeneca for around $4 billion, has received approval for two drugs in 2014: Farxiga in the U.S. and combination drug Xigduo in the European Union.

Of course, it must be pointed out that it's not all bad news for Pfizer. It's a partner (along with GlaxoSmithKline and Shionogi) in the ViiV Healthcare joint venture through which the aforementioned Tivicay HIV drug was granted European Commission approval. Furthermore, the diabetes alliance between Bristol-Myers Squibb and AstraZeneca has produced two approvals in 2014 but has been heavily criticized for its high costs and lack of tangible results, leaving some commentators to suggest that AstraZeneca has overpaid for Bristol-Myers Squibb's share.

Therefore, while disappointment in a late-stage trial is clearly not good news for Pfizer, the ups and downs of drug approval is something that comes with the territory of being a pharmaceutical company. Of keener interest for the long-term fortunes of Pfizer is how successful its restructuring program is, with the ups and downs of drug approvals taking second place at the moment. 

The Motley Fool's top stock for 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (1) | Recommend This Article (2)

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.

  • Report this Comment On February 03, 2014, at 9:49 PM, entheogenius wrote:

    This is an excerpt from my journal and upcoming book Psychopathic Psychotronics

    The following is a list of illnesses that have been broadcast into me with psychotronics during the last few years. Making someone sick with this technology is as easy as recording an illness from one person and broadcasting it into another. Imagine upon reading this list, how much money the pharmaceutical industry could generate by secretly making everyone sick with something they've never heard or dreamed of. If you take one prescription drug on a regular basis, there's a very good chance you will later need to take other drugs to counteract the first drugs side effects and later more to counteract theirs. One “induced” illness could conceivably result in a person needing to take 5 or more drugs within a few short years. For example, I was forced to take over 20 different compounds in only a few months during my false imprisonment in the psyche ward. Most of them were to counteract side effects from the anti-psychotics being forced upon me. All of my Grandparents were turned into walking pharmacies as well.

    Often these were done to me with an audible monologue telling me as it was being, or before it was done.

    Phantom Touch = PT

    Rashes similar to eczema, stinging nettle and poison ivy

    lesions, often between the toes to simulate athletes foot {Radionics)

    hives

    acne vulgaris

    cysts

    blisters

    neuralgia

    hair loss (the base of both thumbs and my big toes)

    overgrowth of body hair (all of my body hair grew twice its normal length practically overnight)

    PT heartburn

    nausea

    vomiting

    diarrhea

    acid reflux while sleeping to cause choking (we're going to stomach acid you)

    constipation

    esophageal paralysis to cause choking on food

    PT headaches

    insomnia over 7 or more days at a time

    lethargy

    depression

    apathy

    Bladder & Bowel incontinence

    inability to urinate, as well as all of the other symptoms of Benign Prostatic Hypertrophy

    loss of synovial fluid in the joints, to the point I can't crack my knuckles, this will eventually cause arthritis.

    Partial complex seizures

    hypertension

    tachycardia

    weak pulse

    rapid pulse

    fever

    bronchitis

    induced sweating any and everywhere, from just the palms, feet or groin to the whole body

    sleep apnea (snoring)

    PT bladder infection, urethritis and sensations of having chlamydia (fire piss)

    dry eyes

    watery eyes

    PT induced sneezing (this can be hell, right Dad?)

    runny nose

    PT sore or scratchy throat

    collapse due to temporary muscle paralysis

    muscle twitches ranging from major, to small and focused, simulating nervous tics

    cramps, especially writers cramp, to keep me from documenting the crimes committed against me, this was also done throughout my education so SRA/IBM could test their Direct Instruction System for Teaching Arithmetic and Reading “DISTAR” bvllshit on me. I couldn't take notes, so I had to learn by direct instruction. (Thanks a lot @ssholes!)

    simulated nervous tics, around the eyes, ears and even in the scalp and inner ear

    heart palpitations and skipped heartbeats, this can cause cardiac arrest

    PT restless leg syndrome ( I'm certain this disease is 100% psychotronic, it didn't exist 30 years ago and it revived sales of a now obsolete Parkinsons treatment, one that probably has major side effects.)

    erectile dysfunction

    induced erections (always at the most inappropriate time) The 9:55 AM boner M-F for 8th -9th grades (I got to walk through the halls between classes while pitching a tent) but it didn't happen on weekends or during summer vacation. Just on schooldays. Thanks SRA!

    forced ejaculation

    chronic fatigue syndrome

    Imagine how much profit the makers of a little blue boner pill could acquire by broadcasting limp dicks into a large segment of the male population and then charging them all $10 a pop for a boner, for the rest of their lives! Imagine if a company selling a habit forming, prescription sleep aid was inducing insomnia into a randomly chosen segment of the population. Big bucks could easily be generated with this highly likely scenario. It's an almost foolproof plan. Who the hell's going to believe it? Imagine if the makers of Grampers started to make everyone piss their pants.

    Imagine how hard the Medical community will fight to maintain the illusion of an infallible education, when they are in fact primarily, walking dispensaries. Much of their education consists of pharmaceutical industry brainwashing.

Add your comment.

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: 2820394, ~/Articles/ArticleHandler.aspx, 10/20/2014 1:13:08 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 16,380.41 263.17 1.63%
S&P 500 1,886.76 24.00 1.29%
NASD 4,258.44 41.05 0.97%

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

10/17/2014 4:09 PM
PFE $27.83 Up +0.13 +0.47%
Pfizer CAPS Rating: ****
AZN $67.81 Up +0.25 +0.37%
AstraZeneca plc (A… CAPS Rating: ****
BMY $50.42 Up +1.20 +2.44%
Bristol-Myers Squi… CAPS Rating: ****
GSK $43.67 Up +0.79 +1.84%
GlaxoSmithKline CAPS Rating: ****

Advertisement