Celebrex and Bextra problems hurt Pfizer

The Vioxx recall saga was extremely hard on Merck and there is widespread speculation that the firm may not survive Vioxx litigation and may be forced to file for bankruptcy. But its number one competitor in Cox-2 business, Pfizer, is hurting equally bad. Pfizer Vice Chairman David Shedlarz told an analyst meeting yesterday that Pfizer expects lower year-over-year sales of the Cox-2 franchise. Since the controversy over Vioxx, Celebrex, and Bextra that started in the last quarter of 2004, both Merck and Pfizer have been target of hundreds of class action lawsuits. (Related article: Vioxx class action lawsuits)

Karen Katen, Pfizer vice chairman and Human Health president, said in the same meeting that, "We believe that, with continued clinical work and appropriate labeling, these medicines will remain important treatment options for patients and doctors for many years to come." She was referring to Pfizer's Cox-2 portfolio that includes Celebrex and Bextra.

In a rather bizarre development in February of this year, a panel of doctors with financial ties to Merck and Pfizer recommended to the FDA that Vioxx sales be allowed to resume while Celebrex and Bextra could stay on the market. The company announced that it "...looks forward to finalizing changes to its U.S. labeling with the U.S. Food and Drug Administration (FDA) as well as moving ahead with plans for clinical studies to further explore the benefits as well as the risks of the Cox-2 specific medicines compared to older, non-selective medicines. In the interim, Pfizer remains focused on the importance of these products for millions of patients around the world." The panel had, however, agreed that these drugs are quite dangerous and should carry the strongest warning (called the black box warning). (Related article: Pfizer may have hidden Celebrex risks)

Since the pressure on Pfizer has mounted over Celebrex and Bextra, Pfizer has launched a company-wide initiative to streamline the organization, fund key investments, and realize significant cost savings. Pfizer is targeting $4 billion in total annualized cost savings by 2008, which represents approximately 12 percent of Pfizer’s current cost base. (Related article: Pfizer being investigated by the Justice Department and attorneys general regarding safety of Celebrex and Bextra)

Pfizer vice chairman David Shedlarz said the financial impact of these efforts will be modest in 2005 but is expected to yield significant benefits in 2006 and 2007. In 2006, the company expects the operational and financial benefits of this productivity initiative to drive a return to double-digit growth in adjusted earnings. For 2007, the company expects revenue growth from both new products and major in-line products will drive accelerating double-digit adjusted earnings growth. Productivity initiatives will also contribute to growth in 2007.

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