Investors are betting cautiously on Pfizer's Lipitor, which could either continue its unprecedented surge or take a huge sales hit, depending on the outcome of ongoing patent litigation.
Deutsche Bank large-cap pharmaceuticals analyst Barbara Ryan told CNN/Money.com yesterday she thinks Pfizer has an 80 percent chance of winning its patent fights, but investors are taking a different view, being very cautious prior to the outcomes of the court battles.
"Investors don't want to make the bet because it's too hard to call," Ryan said.
Pfizer is awaiting verdicts in two court fights with Indian generic drug maker Ranbaxy Laboratories. The Lipitor patent challenges are being decided in a U.S. district court in Delaware as well as a British court. Both companies are awaiting judges' rulings, which could come by the end of the year.
Pfizer holds at least two patents for Lipitor, scheduled to expire in 2010 and 2011.
The cholesterol-lowering treatment was the first drug to break the $10 billion sales mark with 2004 global sales totaling $10.8 billion.
Deutsche Bank projects that Lipitor's global sales will grow to $14.2 billion in 2007 if Pfizer retains the patents. But if Pfizer loses, it could face an $8.6 billion drop in annual sales by 2007.
According to Deutsche Bank analysts, if Ranbaxy succeeds in proving the patents invalid, the company could have a generic version of the drug on the market as early as 2007. Analysts also said Lipitor's competitors, including Crestor and Vytorin, could suffer from declining sales if patients are given the option to switch to cheaper generics.