Pfizer (NYSE:PFE) Faces a Serious Decline in Stock Prices


The world’s largest pharmaceutical company, Pfizer (NYSE:PFE), saw a decline of almost 1.6% in pre-market trade yesterday. This could be due to the recent lowering in earnings per share estimates. The company lowered the full year earnings per share rates from 1.5 – 1.59 dollars to 1.4 – 1.49 dollars. In fact this pharmaceutical giant is also making plans to couple up with the German pharmaceutical company, Merck KGaA (ETR:MRK) for the establishment of a joint program towards the production of cancer treatment drugs.


Pfizer (NYSE:PFE) is the world’s biggest pharmaceutical company and owns some of the best selling drugs in world. Lipitor at present is the best cholesterol lowering medicine available and is extensively used to cardiac patients because of its composition. Moreover, Pfizer (NYSE:PFE) manufactures 14 of the most successful and powerful drugs in all the fields. These drugs provide the company with staggering sales of more than $1 billion annually but like all other pharmaceutical companies, Pfizer has to face to a lot challenges regarding patent expiry and issues regarding the FDA regulations.


Owing to its market grip and dominance, the company has a lot of affinity towards partnerships. The company is known to have made collaborations with several companies for the production of better and profitable drugs. Pfizer (NYSE:PFE) has lately worked with several other companies like Johnson & Johnson (NYSE:JNJ), Merck KGaA (ETR:MRK), Amgen (NASDAQ:AMGN), etc. In fact, the current partnership with the German company (Merck KGaA) may help the company (NYSE:PFE) afterwards as well.

The partnership with Merck (ETR:MRK) is expected to become successful and it will form a sound ground for further joint ventures and collaborations on many different R&D adventures. If we take a closer look at the Pfizer (NYSE:PFE) – Merck (ETR:MRK) collaboration, we will see that Pfizer lowered its earnings per share estimates because the company had to pay a down payment of $850 million and this seems logical as the company had to make up for this payment from somewhere.


Analysts have estimated that this deduction can enable Pfizer (NYSE:PFE) to pay up to $2 billion in milestone payments. However, this must be kept in mind that the company has clearly stated that, the current cut off in the stock price estimations was not made while keeping in view the profits that could be generated through Xalkori. Where Xalkori is the latest cancer treatment drug and the founding cause of Pfizer’s and Merck’s (ETR:MRK) present partnership.


Moreover, the CEO believes that once the drug is released it will give huge revenues and both the companies are awaiting its launch in the US region. In fact the company also said that this impact could help in bringing down financial costs by 250 to 450 million dollars each. However, the CEO Lan Reid said in one of his speeches that Pfizer (NYSE:PFE) has set pharmaceuticals as their main target and all their planning and strategy will be focused on this very objective.