Investors and analysts are none too impressed with Pfizer's new strategies as outlined by CEO Jeffrey Kindler and other execs during an annual Wall Street update yesterday. The stock fell to within 50 cents of its 52-week low, and analysts expressed disappointment, boredom, and frustration. Here's a sampling:
- "The message I hear is, 'Don't expect anything radical,' but the challenges require radical change," Morgan Stanley's Jami Rubin told the Wall Street Journal.
- "In my own judgment, I don't think they're going to be able to replace Lipitor in 2011," les Funtleyder at Miller Tabak told CNN Money. "There's nothing I've seen today [at the analyst meeting] that would change that."
It was a tough audience. Analysts have been hoping--expecting--big changes from Kindler, and not unfairly, because he promised them. The moves he outlined yesterday do include some sweeping alterations to the way Pfizer manages its business; for instance, Kindler says he's giving company units more autonomy so they can move more quickly. But cultural change takes time to bear fruit, especially at a behemoth like Pfizer, and it's not the kind of big-deal dramatic move that energizes investors. Promising to vault a bunch of drug candidates into Phase III this year is another long-term, slow-to-pay-off strategy. The one thing that might have set observers abuzz--a big acquisition--Kindler ruled out completely.
Now, Kindler may be laughing all the way to the bank in 2010 when his patient strategies start to pay off. He might be able to thumb his nose at all the investors and analysts who yawned at the meeting yesterday. But Wall Street is all about psyche. The audience went in wanting, if not expecting, revelation. Instead they got step-by-step-by-painful-step improvement plans. Which may end up being the best thing for Pfizer. But they won't do a thing for investors' returns next quarter.
- read the story at CNN Money
- check out the WSJ's article
- find this comprehensive summary at The Day
- read Kindler's word on acquisitions
- see Forbes' focus on Kindler's plans
- view Kindler's interview with CNBC's Maria Bartiromo
ALSO: Pfizer has staked out plans to make 15 to 20 regulatory filings for new drug approvals and expanded use of existing drugs between 2010 and 2012, insisting that the pharma giant can gin new revenue to replace the $12 billion a year it will see evaporate when Lipitor loses its patent protection. Report