Improved versions of drugs are typically great for business. Sure drugs like Johnson & Johnson's
But what do you do when nearly every potential patient already gets the product, which is the case for Pfizer's
The improved version, Prevnar 13, which was approved yesterday, adds protection for six additional strains of pneumococcal disease-causing bacteria -- which causes such things as pneumonia, ear infections, and meningitis. Without any U.S. competition --GlaxoSmithKline's
The increased price will help Pfizer build on top of the $3 billion or so in revenue that Prevnar brought in for Wyeth and then Pfizer last year. The company will also get a one-time boost because the CDC recommended a booster shot for children under the age of five who received the old vaccine. Poor kids.
There's also potential for additional sales if the drug is approved for use in adults. For that indication, Pfizer would actually have U.S. competition as Merck's
Prevnar has certainly helped improve Pfizer's outlook. Now let's just hope that the rest of Wyeth pays off as well.
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is an Income Investor selection and the Motley Fool Options recommended buying calls on the stock. The Fool owns shares of GlaxoSmithKline and has a disclosure policy.