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Analysts Say Investors Confused By Reports on Medical Effects of Pfizer's Drugs

Posted on: Wednesday, 22 December 2004, 21:00 CST

Dec. 23--Pfizer Inc.'s shares continued to rebound Wednesday, gaining 4 percent during the day's trading, as industry analysts continued to sort out the most recent studies involving its Celebrex drug.

One industry analyst's report on Pfizer was headlined "Confusion Reigns," a testament to the stock's 11 percent plunge Friday and apparently conflicting studies late last week and early this week, one of which linked Celebrex with cardiovascular side effects and one of which showed no such effects.

After falling again Monday, Pfizer shares have rallied, along with the market, recovering more than 6 percent. Pfizer, one of the 30 stocks that make up the bellwether Dow Jones Industrial Average, closed Wednesday's trading at $25.95 a share, up 3.9 percent. It was the day's most active stock on the New York Stock Exchange.

Some industry analysts also are predicting that federal regulators will not call for the removal of Celebrex, among Pfizer's top five best-selling medications. Celebrex is a COX-2 inhibitor designed to treat acute pain and inflammation, especially for those suffering from arthritis-related pain. The drug is in the same class as Vioxx, the blockbuster drug that Merck & Co. pulled from the shelves Sept. 30 after it was shown to increase the risk of heart attack and stroke.

UBS' pharmaceutical analysts, who headlined their latest research update on Pfizer under the "Confusion Reigns" headline, said Celebrex's withdrawal "seems highly unlikely, in our view."

The analysts did say that the federal Food and Drug Administration has signaled that some form of action may be imminent.

The regulatory agency already announced it would conduct hearings in February on the issue of COX-2 inhibitors. Those with acute pain and inflammation often favor COX-2 inhibitors because they act to inhibit the enzyme that produces the pain and swelling without bothering the enzyme that can also cause gastrointestinal distress. Over-the-counter medications such as aspirin and naproxen, sold as Aleve, can quell pain and inflammation but can also cause stomach distress or internal bleeding in some patients.

On Monday, a study into naproxen and Celebrex's possible effect on Alzheimer's disease showed that naproxen increased the risk of cardiovascular events while Celebrex didn't. This past Friday, one of two cancer-prevention studies found that high dosages of Celebrex (400 to 800 milligrams) caused an increased risk of cardiovascular events.

Cherie Trice, a portfolio manager with the Hartford-based Trust Co. of Connecticut, which manages some $700 million in assets, said it wasn't surprising that Pfizer stock has been volatile since the adverse drug disclosures.

"All drugs have some kind of adverse side effect," she said.

The portfolio manager said that the high dosage taken by those in the tests are not typical. She said less than 1 percent of those taking the pain medication take dosages as high as 400 milligrams.

"The bottom line is that we've got some confusion," she said. "We think people are starting to calm down and look around and recognize Pfizer for the many products that it has, rather than focusing on the one drug that could potentially have some issues."

In 2003, Celebrex had annual global sales of some $1.8 billion and has generated sales of about $2.3 billion through the first nine months of this year.

Stephen Bright, senior investment officer for the Trust Co. of Connecticut, said he didn't see parallels between Vioxx and Celebrex.

"It appears that Pfizer has been upfront telling everybody what they knew," he said. Bright also said there is a need for COX-2 drugs such as Celebrex. He said the sell-off of Pfizer shares late last week and early this week appears to be an overreaction by the markets.

"It does show that even when you think you've got a great company, which Merck and Pfizer arguably are, you never know when something will come out of the blue," Bright said.

Health-care analyst Steven Findlay of Yonkers, N.Y.-based Consumers Union said the conflicting studies and seesawing Pfizer price has confused individual investors and Celebrex patients.

"Frankly, this thing is so fast moving that a lot of us are playing catch-up," he said, adding that he's spent the past two days poring over reports about Celebrex.

"And we don't believe that there is any substitute for having consumers connect with their physicians as soon as they can if they have questions," he said. "Nothing in the newspapers or television can personally tell you what to do."

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PFE, MRK,

Source: The Day

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