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
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
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.
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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.