Pfizer Stops Cholesterol Drug Trial Over Deaths

Pfizer (PFE) finally pulled its next blockbuster drug torcetrapib out of clinical trials after many patients died due to unexpected side effects.

One of the company's older slogans "Life is our life's work" surely seems ironic now doesn't it?

Torcetrapib was being investigated as a cholesterol drug that raised HDL, or good cholesterol, in the blood stream. The problem however was that the drug also raised blood pressure to dangerous levels.

Torcetrapib was supposed to be Lipitor's replacement as the company's next cholesterol drug superstar. Many of Pfizer's big name drugs are due to lose the exclusive patents within a few years, and most of its pipeline is clogged with would-be replacements that have many analysts unimpressed.

This is not good for Pfizer, especially since analysts expect the worst for big pharmas in general over the next few years after a resounding Democratic senatorial win could mean a negative political environment is just over the horizon.

Pfizer has under-performed the S&P by more than 50% over the last five years! What will the next five bring?

PFE 1-yr chart:

Comments

[NO DooDahs:]

The real story here is that the news made for an excellent day trade and also for an excellent longer-term value play!

Lessee, down 15% at the open and down 10% at the close, 90 divided by 85 is 5.9% gain in 30 minutes, anyone that had access to their computer yesterday should have margined themselves silly! Unfortunately I didn't have access yesterday ...

But I do today, and no one can convince me that torcetrapib's failure is worth a 10% discount on future earnings through perpetuity. Can you say "fallen angel?"

Also, I tend to salivate when I see huge gaps and huge volume, and my theory is to follow the day's direction and not the gap's direction for a quick hitting trade. Combine that with the above, and I would make a bull case for PFE here.

2006 Dec 05 09:27 AM