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Investors Don't Celebrate Celebrex Decision Favoring Cheap Generics

By Dave Williamson - Mar 16, 2014 at 8:00AM

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Pfizer has a bad day in court and loses patent protection on a big blockbuster .

Biotech investors are no stranger to a trading halt that brings game-changing news to a stock, but you don't see it very often when it comes to big pharmaceutical companies, especially ones with $200 billion market caps.

So it came as a surprise when Pfizer ( PFE 0.47% ) saw a trading halt earlier this week, and the cause was negative news for the company. A US. District Court decision invalidated Pfizer's patent on its blockbuster drug Celebrex. It is the fourth best selling drug for the company, as 2013 Celebrex sales reached $3 billion and are continuing to grow.

Generic competition for the drug could begin as early as May 30, which would be cause to celebrate for patients and payers, along with the generic-drug makers. But where does this leave investors in Pfizer? 

In this video, Motley Fool health-care analyst David Williamson discusses the court's decision, how this will affect Pfizer's sales, and why ultimately losing billions in revenue shouldn't change investors' thesis on the stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$51.72 (0.47%) $0.24
Teva Pharmaceutical Industries Limited Stock Quote
Teva Pharmaceutical Industries Limited
TEVA
$8.42 (2.18%) $0.18
Allergan plc Stock Quote
Allergan plc
AGN

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