Spotlight: Pfizer Inc.

Pfizer (NYSE:PFE), one of the largest pharmaceutical companies in the world has experienced a downward trend of its stock price over the last year, while major competitors in the industry saw its stock prices rise. Does this mean that the golden era of Pfizer is over? The problem for Pfizer is the patent cliff; patents are ending which means that competitors can easily copy products without the research and development costs. It is not just Pfizer that is hurt by this patent cliff, the whole industry is hurt by it. However, it should be noted that Pfizer is more hurt by it than its direct competitors. Pfizer runs the risk to lose a quarter(!) of its revenues as a result of patent losses in the coming years. The only way for Pfizer to counter this event is by creating a new product and consequently also issuing new patents. If we take a look at the drugs Pfizer is currently working on, we note that there is 1 drug in particular that is interesting to boost Pfizer's sales in the future: palbociclib, a drug to treat breast cancer. Testing of this drug revealed a significant slower progression of advanced breast cancer. On the other hand, the testing results also indicated an insignificant effect on the overall survival-rate of patients. So there are 2 ways to look at this drug. There will be a market for this drug even though overall survival-rate is not affected by it, but the drug will become quickly obsolete if a drug is created that will also increase the survival-rate of patients. Since Pfizer is highly dependent on the outcomes of the sales of this new drug, it makes Pfizer a risky investment. In conclusion, Pfizer could be a nice stock in the future if you are willing to take substantial risk, but it may be wiser to look for other companies in the pharmaceutical industry.