Under pharma earnings, basic problems

You've heard of see-through buildings. How about see-through pharma earnings? Though drug makers have been reporting increases to their bottom lines, investors are looking past the foreign-currency gains and one-time earnings boosts [1] to the fundamental problems the industry faces.

"Each company generally has had somewhat of the same narrative... limited pipeline visibility, patent expirations [2], and decelerating growth in their main products," one analyst told the Associated Press. Thus Wyeth lost Protonix revenues; Roche suffered from falling Tamiflu sales; Merck's Singulair, Vytorin, and Fosamax dropped off; Pfizer saw Zyrtec and Norvasc decline; and Lilly's top seller Zyprexa deflated.

Of course Big Pharma also confronts a larger problem, just as most other U.S. companies do: the economy [3]. As Steve Brozak of WBB Securities pointed out, the lackluster quarter is just one more sign of an overall market shift. "This proves to us that we're in a recession," he said.

- read the Associated Press story [4]

Related Articles:
The Top 15 R&D Budgets [5]
Big Biotech emerges as a shelter in economic storm [3]
Best [6] and Worst [7] Pharma stocks of 2007
The specter of generic competition grows [2]
Wanted: Rugged pharmas for tough trip [8]