Pfizer (PFE) Finally Gets The Message

By Douglas A. McIntyre Published Oct 5, 4:39AM EDT

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For Pfizer, it has been a long and painful fall. In early 2004, its shares were just below $39. It was the age of Big Pharma. Most of the big drugs had not gone "off patent" and so there was very little competition for the blockbuster money makers.

Now, Pfizer’s shares are unlikely to trade above $28. Over the last five years, the S&P is up about 80% and Pfizer is down almost 20%.

Pfizer found its brain yesterday. It had not been far away, perhaps no further off that a closet in its NYC headquarters.

According to The Wall Street Journal "Pfizer’s labs struggled to find enough new drugs to offset the anticipated loss of sales when $13-billion-a-year cholesterol drug Lipitor faces generic competition, which could come as soon as 2010." So, its has hired a big time biotech executive to be head of a new Pfizer biotechnology center. He will work on advances including medicines made by splicing genetic material into live cells.

The stock market has been telling Pfizer that biotech has been the place to do much of its research work. The company trades at 3.6 times sales. Genentech (DNA), the leader in bio-based medicine trades at 7.5x. Its shares are up 400% over the last five years.

It will be several years before it is absolutely clear whether Pfizer’s move into the more advanced part of pharma R&D will work. But, at least it has given itself a chance.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.