Expert Predicts Big Future for Pfizer’s Lyrica Drug

An industry analyst is predicting that the newly approved Pfizer drug Lyrica could generate annual sales of more than $1 billion, which would offset the expected erosion of sales of Pfizer’s Celebrex and Bextra pharmaceuticals.

Standard & Poor’s pharmaceuticals analyst Herman B. Saftlas said Lyrica is expected to be a strong seller for neuropathic-related pain and that the company’s pipeline remains strong. He forecast a $30 a share target price for Pfizer over the next 12 months.

On Tuesday, Pfizer closed at $26.45 a share, unchanged from the prior day’s trading on the New York Stock Exchange. New York-based Pfizer employs about 6,000 people at its research campuses in Groton and New London.

The federal Food and Drug Administration approved the medication late last month for pain caused by nerve damage from diabetes or shingles. The drug is still under review for treating partial seizures in adults. Pfizer officials have said that Lyrica is the first FDA-approved drug for treatment of this type of pain, which is often described as a burning, tingling, sharp "pins and needles" feeling in the feet, legs, hands and arms.

The drug already has been approved for use in Europe for both pain treatment and seizures. Pfizer said that about 3 million diabetes sufferers in the United States develop nerve damage over the course of their disease, while about 150,000 Americans can develop nerve damage from shingles.

In his research report on Pfizer, Saftlas said that falling sales for Pfizer’s blockbuster drug Celebrex, which has been linked in some studies with a heightened risk of heart-related problems, would lower the company’s overall revenues this year. He said that he expected Pfizer’s revenues this year to slip modestly from his forecast of 2004 annual revenues of $52 billion.

"We expect sales of Celebrex to decline about 40 percent, as we believe physicians are likely to become much more cautious in prescribing the drug in view of recent cardiovascular risk publicity," the analyst wrote.

"Sales of Bextra, Pfizer’s second generation COX 2 drug, are also expected to drop sharply."

Through the first nine months of 2004, those two drugs, which are used to treat acute pain and inflammation, generated global sales of some $3 billion. Pfizer hasn’t disclosed its full 2004 sales or earnings results.

COX-2 inhibitor drugs, which are favored by some physicians because they don’t cause stomach upset or gastrointestinal bleeding like some over-the-counter pain relievers, have come under closer scrutiny for their possible cardiovascular side effects since Merck & Co. pulled its blockbuster drug Vioxx from the shelves this past September. Studies showed a heightened risk of heart attack or stroke among some patients who took Vioxx.

Saftlas, who still maintains a "hold" rating on the stock, is projecting 2005 operating earnings per share of $2.18 for Pfizer, up from his estimated operating earnings of $2.10 for the full 2004 year. He also said that he expects Celebrex will account for about 6 percent of 2004 sales for Pfizer and more than 8 percent of its earnings for the previous year.

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