There's a little bit of irony that Pfizer's
But that's kind of the point of selling or spinning them off. Despite moving along solidly, their growth isn't valued because it's masked by the larger business. The only way to unleash the value is to split it off.
Investors who stick with what's left after the breakup need to be willing to ride the up-and-down movements of drugs. Drugs go off patent; that's a fact of life for biopharmaceutical companies. The consumer-health division, which Pfizer is keeping, will help deaden the blow a little, but it's less than 5% of the slimmer company's total sales. Generic competition is still going to be a problem, as we saw in the second quarter with Effexor XR and Protonix in the U.S. and Lipitor outside the States.
Fortunately, Pfizer hasn't been sitting idly by taking punches from generic-drug makers. The pharma giant is developing new drugs that should help get revenue growing again after Lipitor starts its decline in the U.S. later this year. There's tofacitinib, which should be able to compete with the megablockbuster rheumatoid arthritis drugs -- Abbott Labs'
We'll have to wait until those drugs and others further back in the pipeline hit the market to know whether Pfizer can make a post-Lipitor revenue U-turn, but it certainly seems possible with recent clinical-trial successes. For now, rather than focusing on earning reports, investors would be better off paying attention to the pipeline.
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