The halt of Pfizer’s torcetrapib program has potentially far-reaching implications for the broader industry and raises questions about safety of other drugs in its class, analysts said.

The move will likely force the firm to ramp up cost-cutting measures, stock repurchases and acquisition activity—actions likely, given the company’s scale, to have a knock-on effect throughout Big Pharma. CEO Jeffrey Kindler said Pfizer’s plan for transformation will be expedited. Pfizer had been counting on torcetrapib to make up for several patent expirations, including one on cholesterol-lowering Lipitor, Pfizer’s top-selling product with $12 billion in annual sales. Lipitor could lose patent protection as early as 2010.

“We have begun a transformation that has been accelerated by this event. We’ve (already) announced the first step with a reduction in our sales force,” Kindler said on CNBC.

Even before the trial halt, Pfizer had said it would cut its sales force by 20%, or 2,200 jobs. Deutsche Bank large cap pharma analyst Barbara Ryan speculated that layoffs could top 10,000 in the near future—about 10% of its workforce.

Adding to the financial community’s ire at the announcement, Pfizer glowed over the drug’s potential just days before pulling the plug, with R&D chief John LaMattina telling analysts that the HDL-raising effect of torcetrapib, given in combination with Lipitor, “should overwhelm” the blood pressure elevation. Pfizer officials promised investors a “broad and very diversified stream of new products in development” producing four new products a year beginning in 2011. Torcetrapib was the centerpiece, hailed by Pfizer as “the most important new development in cardiovascular medicine in years.”

“The R&D day was scheduled many, many months ago,” Kindler said on CNBC. “We did talk about torcetrapib that day and we did express the enthusiasm that we and, candidly, scientists had for the promise that this treatment provided.”

The axing of torcetrapib also calls into question other drugs in the same class, known as CETP inhibitors. Pfizer has alluded to two backup compounds to torcetrapib in its pipeline that haven’t displayed the blood pressure side effect. Roche is developing a similar compound—slated for approval in 2009—as is Merck.

Niaspan, marketed by Kos Pharmaceuticals, can do what torcetrapib aimed to. It raises good cholesterol without serious risks, and a large federal study is testing it with simvastatin, the active ingredient in generic Zocor for lowering bad cholesterol.

Some newer diabetes drugs may boost HDL, too. The Cleveland Clinic’s Dr. Steven Nissen, who led one recent study of torcetrapib, will present results of other studies on the Pfizer drug that may shed light on whether it was uniquely dangerous. He said it was too early to count out the entire class.

Dr. Greg Brown, who is leading the federal study of Niaspan plus Zocor, agrees. He told the AP: “My suspicion is torcetrapib failed because of its mechanism of action.”