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 to the fundamental problems the industry faces.

"Each company generally has had somewhat of the same narrative... limited pipeline visibility, patent expirations, 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. 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

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