WSJ Research
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Date: |
02/27/02 |
My Wall Street Journal exercise concerns
itself with the pharmaceutical-giant,
Pfizer
. Pfizer is a recognized powerhouse
in the pharmaceutical industry based on its earnings from such successful
drugs as
Viagra
, and also
Zyrtec
.
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Excellent article relavance to company |
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Good article relevance to the company |
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- 3 stars |
Moderate article relevance to the company |
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1. Hensley, Scott. "Pfizer's Net Jumps 38% on Strong Sales of Blockbuster Drug Lipitor", Wall Street Journal, January 24, 2002: B1; B10.
The earnings juggernaut
at Pfizer
Inc., the world's largest pharmaceutical company, kept powering forward
in the fourth quarter due to the growth of the cholesterol-fighting
Lipitor
. The New York based company
said net income grew 38% in the quarter to $1.96 billion, compared to the
$1.23 billion a year earlier.
Unlike many of its rivals, Pfizer's portfolio of medicines has remained largely untouched by patent expirations, keeping their drugs free from any competitor's grasp. Pfizer has told analysts that the company's drug-discount card for the poor Medicare beneficiaries had attracted more than 165,000 inquiries since the conception of the program.
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2 . Hensley, Scott. "Pfizer is Warned by FDA to Fix Plant's Manufacturing Problems", Wall Street Journal, February 12, 2002: pages .
There is a first time for everything,
and for the first time Pfizer is being warned by the
FDA
to correct alleged manufacturing problems at a factory making prescription
drugs. The FDA addressed
a
letter
to Pfizer on Jan. 30, 2001, concerning quality-control issues for a
plant on Terre Haute, IN. The company has 15 working days to respond
in writing.
In its letter, the FDA wrote that the company failed to assure that procedures at the Terre Haute plant were adequate to prevent bacterial contamination of medicines. The FDA letter specified 31 separate problems found during inspection. The FDA asked that Pfizer globalize its assessments to ensure that the problem is not found at any other plants. Pfizer holds that 10 of the problems are already taken care of and the remainder of the list will be taken care of within the next six months.
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3.
Lucek, Sarah. "Thompson Backs OTC Status For Popular Antihistamines",
Wall Street Journal , February 7, 2002:
pages
.
The Health and Human
Services
Secretary Tommy Thompson said he favors making some popular prescription
antihistamines available over-the-counter, a change the drugs' manufacturers
have fought vehemently. Speaking to reporters after a congressional
hearing on the HHS budget, Mr. Thompson said he supports an over-the-counter
switch for "some" of the medications being considered by the
FDA
--among these is Pfizer's
Allegra
.
He concluded by saying that the government will be making
a decision soon on whether the drugs will be available over the counter.
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4. Sch ultz, Ellen E. and Francis, Theo. "Companies Cash in on Tax Breaks From Employee Retirement Plans", Wall Street Journal, January 31, 2002: B1; B10.
In today's companies when employees are saving for retirement by contributing
to their
401k
, they are also helping out the company by saving it money. This
is because the employer will match the employees savings with the company's
stock. Due to little-known tax rules, any of a company's own stock
in its retirement plans can trigger special tax breaks. These tax breaks
are the reason company's use their own stock, and lock employees into them
until the age of 50 or later.
Congress will hold hearings next week to consider whether there should
be limits on the amount of employer stock in the 401k plans. If an
employee holds too much stock it can be very dangerous to the employee
if the company goes under.
Pfizer is now converting
its 401k plan to a
KSOP
, which is a hybrid between the 401k program and the
ESOP
(Employee Stock Ownership Program). Pfizer paid some $60 million
in dividends to its retirement plans in 2000, which could bring Pfizer a
tax deduction of $23.4 million. Some people believe that a change to
KSOP or ESOP may be worse (see article in
Washington Post
).
5. Lucek, Sarah. "Bush Scrambles to Get Drug Cards Into Consideration On Capitol Hill", Wall Street Journal, January 28, 2002: A1; A6.
President Bush has proposed a Medicare prescription-discount card, which
he hopes will ease the price of rising drug prices. But a federal
jugde has temporarily blocked issuance of the cards. The drug cards
pose a threat to the pharmacists and drug store owners who appealed to the
federal judge. The retailers lobbyists argue that the program will
place many small businesses at risky forcing them to absorb the discounts.Under the program, private entities called pharmacy-benefits managers would apply for permission to market discount cards to recipients of Medicare, the federal health-insurance program for the elderly and disabled. Beneficiaries would pay a nominal fee to participate, and would be locked in to using one provider's card for a specified time. During the standoff, Pfizer has issued a card for low-income seniors that offers its medicines at a price similar to what they pay as a co-payment under health insurance plans. The card's critics are now saying that such market developments, as Pfizer has displayed, make the administration's proposal unnecessary.
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6. Ceron, Gaston F. "Balance Keeps Federated Fund Steady in an Economic Storm", Wall Street Journal, February 11, 2002: pages .
Mr. David Gilmore
is a manager for the
Federated Capital Appreciation Fund
, part of the Pittsburgh-based Federated Investors fund group. With
about $1.4 billion in assets, the Federated Capital Appreciation Fund offers
a mix of two investment styles, value and growth. "We will never
have more than 60% of our portfolio in either style," says Mr. Gilmore.
"We're looking for a balance." The fund
invests in stocks with large and mid-size market capitalizations, but
avoids small-cap stocks. Click here to return to TOC
7. Naik, Gautam. "With a Stable of Drugs in Decline, Glaxo Buys up Marketing Rights", Wall Street Journal, February 12, 2002: pages .
Last fall, GlaxoSmithKline
PLC competed with about
10 rivals for the right to market
Vardenafil
, a new impotence drug that ppromises to be more effective than
Viagra
. As part of its pitch to the drug's inventor,
Bayer AG
, the british company dispatched a special team to Germany to emphasize
GlaxoSmithKline's marketing prowess. The Company's V.P. personally
got involved with the negeotiations, just to display their tremendous interest.HOW THE COMPETITION IS REACTING
GlaxoSmithKline currently receives about 17% of its revenue from in-licensed products compared to about 30% to 35% that Pfizer and Merck receive. Pfizer has reacted in an article found on cnn.com saying that they are confident that Viagra will stand the test of time. Even though Vardenafil is currently in pahse III of its testing and is performing well, Pfizer is not worried at this time.
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8. Leung, Shirley. "McDonald's Chief of U.S. Operations, Alan Feldman, Resigns From Chain", Wall Street Journal, January 22, 2002: A5.
In the latest of several management departures,
McDonald's
Corp. said its executive in charge of U.S. operations resigned. The
world's largest restaurant company said Alan Feldman, 49 years old, the president
and chief operating officer of U.S., Canada, and Latin American operations,
left to pursue other options. Mr. Feldman's resignation follows the
departure of Jeff Kindler, president of McDonald's division Partner Brands
who resigned in december to join
Pfizer.Click here to return to TOC
9. Pope, Tara. "Cholesterol Drug Use Raises Questions About Side Effects", Wall Street Journal , February 1, 2002: pages .
As new government standards could triple the number of people taking cholesterol
drugs to 36 million, doctors and patients want more solid information on
the side effects of the drugs. The class of drugs known as
statins
includes blockbuster brands Lipitor, Zocor, and Pravachol. Drug makers flatly dispute the notion that satins contribute to memory problems and some are even studying the use of statins to treat Alzheimer's disease. "There is a lot of evidence that statins improve memory function, and no real evidence that it affects memory function in a negative way," says Rob Scott, vice president of the cardiovascular and metabolic group at Pfizer, maker of Lipitor.
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10. Martinez, Barbara. "Group Alleges Drug-Discount Plan For Elderly Puts Members at Risk", Wall Street Journal, February 12, 2002: pages .
Drug-discount cards are becoming increasingly common, with different versions
offered various companies and groups.
Usually for an annual fee, the cards offerpatients discounts of between
5% and 10%, and, for some drugs, more than 50%. President Bush has
advocated using drug discount cards in the Medicare program until a comprehensive
drug benefit can be hammered out for more than 39 million Medicare recipientswho
don't have federal drug coverage. The cards are usually administered by prescription-drug benefit managers, familiarily called PBMs, which are similar to health-insurance plans for pharmaceuticals. These companies negotiate discounts with drug makers and pharmacies, then pass on some of the savings to the clients. The current battle began when AARP switched its drug-discount-card business from AdvancePCS to United Health , which already operated several AARP health-plan services.
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11. Fuhrmans, Vanessa. "Bayer Faces Hurdles Ahead of U.S. Listing As Firm Raises Estimates of Baycol Death", Wall Street Journal, January 21, 2002: B11.
As Bayer
AG
prepares for its debut on the
New York Stock Exchange
, it approaches the milestone after a year marked by several important setbacks.
The latest was the German chemical and drug maker's disclosure Friday
that as many as 100 deaths have been linked to
Baycol
. Beyond the human toll, Friday's disclosure made in a document filed
with the U.S. Securities
and Exchange Commision
bolsters earlier worries that Bayer could face up to several billion
dollars in compensation claims. Bayer officials said that since August
recall of Baycol, the company has received more reports of deaths in patients
who had been taking the drug, thoough it isn't clear whether the drug played
a role.The sudden withdrawal of its most promising drug already cost Bayer $704.8 million last year. With little else in its arsenal to replace Baycol, Bayer is banking on Vardenafil, an anti-impotence treatment is says is more effective than Pfizer's Viagra. But it still faces competition from another company, Eli Lili & Co . It could be years before Bayer produces new medicines.
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12. Mantz, Beth M. "Orbitex Health-Care Fund Manager Keeps an Eye on Government Policy, Wall Street Journal, February 7, 2002: pages .
Portfolio manager Alidad Mireskandri believes there is no more to investing
in health care than looking at the company's scientific research, financial
resources and management experience. "One has to keep an eye on governemnt
policy, which in my opinion, is the biggest influence in the sector," said
Mr. Mireskandri, manager of the
Orbitex
Health and Biotechnology Fund. Governemnt policy encompasses patent law, food and drug law, federal funding for the National Institutes of Health, Medicare and Medicaid reimbursement policies, and Food and Drug Administration activity.
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