- The Washington Times - Sunday, December 3, 2006

NEW YORK — Pfizer Inc. likely will slash staff to improve its financial performance after the weekend’s announcement that the company ended development of a key drug.

The world’s largest drug maker said Saturday that an independent board monitoring a study for cholesterol treatment torcetrapib recommended that the work end because of an unexpected number of deaths.

The news is devastating to Pfizer, which had been counting on the drug to revive stagnant sales that have been hurt by numerous patent expirations. It has said it was spending about $800 million to develop torcetrapib, which was supposed to fill the void when its best-selling drug, cholesterol treatment Lipitor, loses patent protection in 2010. Lipitor sales totaled $12.2 billion last year.

Analysts differed on how much they thought Pfizer stock would fall when the markets open today. Barbara Ryan, an analyst at Deutsche Bank, said she thought the dividend yield of roughly 4 percent would keep shares from a free fall, but another analyst estimated the stock could plunge to $20 a share. Pfizer shares closed Friday at $27.86 on the New York Stock Exchange.

“This is obviously unfortunate because this was the biggest opportunity in their pipeline,” said Ms. Ryan. “Clearly, there is more pressure on them to do cost cutting.”

Ms. Ryan said Pfizer might lay off as many as 10,000 people. Pfizer employs roughly 100,000 people. She said she also expects Pfizer to raise its annual dividend from 96 cents to $1.10 per share in the next few weeks in the hopes of putting a floor under the stock.

Torcetrapib was designed to raise levels of HDL, or what is commonly known as good cholesterol. Pfizer has two other products in early development to raise HDL, using the same method as torcetrapib. It is too soon say how those will be affected by torcetrapib’s demise because it not known what caused the patient deaths in the trial.

Dr. Steven Nissen, chairman of cardiovascular medicine at the Cleveland Clinic, said it is too soon to say whether the entire class of drugs known as CETP inhibitors is dangerous or whether something specific to torcetrapib caused the deaths. He said that Roche Holding AG is developing drugs of the same type, and there is speculation that Merck & Co. is, too.

CETP inhibitors work by blocking an enzyme that transforms good cholesterol into bad cholesterol, Dr. Nissen said. Lipitor lowers bad cholesterol, and initially Pfizer was planning to sell torcetrapib in combination with Lipitor.

Pfizer spokesman Paul Fitzhenry said 82 patients taking the combination of torcetrapib and Lipitor died, compared with 51 deaths when patients were taking Lipitor alone. Each arm of the trial had 7,500 patients.

The U.S. Food and Drug Administration said yesterday that it supported Pfizer’s decision to suspend the trial and that it will work with the company and other drug makers developing similar products to ensure procedures are in place to identify any safety problems quickly.

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