Wednesday, March 19, 2014

Pfizer says U.S. court invalidates Celebrex patent; generics loom -- Reuters

Pfizer -- U.S. court invalidates Celebrex patent; generics loom | Reuters:


Knocking the block of of the buster.

Pfizer is taking a big hit with this court ruling against Celebrex patent. Surprisingly, the stock price, not so much so. Almost not even a jitter as it stays around $32 per share.

That's $3B in annual sales with $2B in the US (relevant to the US court ruling, obviously).

IF the company repeats its $51B in sales from last year (revenues have been dropping over the last 3 years) then that represents about 4% to 6% of the companies sales. But it has to represent a huge hit to the bottom line, let's say 8% to 15%. (It doesn't take much to milk the cash cows; it does however, take a lot of money to invent the cow, clone it, raise the herd to maturity, and then milk each cow for all she's got for about 20 years.)

It look like the patent would have expired in 2015 anyway, so there would be generics already sitting on the sidelines (or the storefront in other countries).

This must have been totally expected. It is hard to imaging a $204B company (based on market cap) that doesn't take a serious tumble when one of its blockbuster products takes a hit.

It is blockbuster patents in Big Pharma going off patent like this that contribute to the slowing of Healthcare spending. That's right. Healthcare spending has only been increasing at about 4% over the last couple years. A big part of that is the patent cliff for big pharma drugs.

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