Archive for October, 2010

Earnings Preview: Pfizer to tout new drugs, deals

Friday, October 29th, 2010 | Finance News

NEW YORK – Pfizer Inc., the world's biggest drug maker by revenue, should focus on some recent deals, new research data and its integration of Wyeth, which it bought a year ago, when it reports its third-quarter results before the stock market opens Tuesday.

WHAT TO WATCH FOR: Pfizer executives likely will discuss some promising research results just released or about to come out.

That includes data on crizotinib for nonsmall-cell lung cancer, which comprises about 85 percent of lung cancers, in nonsmokers. The drug targets about 4 percent of those patients, who have a certain genetic variation. Results of a small study, reported in the New England Journal of Medicine this week, stated more than half the patients had some response. An accompanying editorial said the drug also shows promise as a possible treatment for some other cancers and appears less toxic than most chemotherapy. It's already in late-stage testing.

The first of six late-stage studies of pain drug tasocitinib are to be presented at a conference in early November. Pfizer expects to apply for U.S. approval of apixaban, a drug to prevent strokes that Pfizer is developing with Bristol-Myers Squibb Co., at the end in the first quarter of 2011.

Pfizer bought rival drugmaker Wyeth last October, and executives will give an update on their progress in reducing costs by $4 billion to $5 billion per year. The $68 billion deal, Pfizer's third megamerger in a decade, secured its position at the top of the industry.

Executives will discuss a flurry of deals this month, particularly its ongoing tender offer to buy King Pharmaceuticals Inc. for $3.6 billion. Along with abuse-resistant pain drugs made by King, the deal gives Pfizer EpiPen, a pre-filled injection for quickly treating serious allergic reactions, and three other products.

Also in October, Pfizer said it will pay about $240 million to enter a partnership with a Brazilian drugmaker, Laboratorio Teuto Brasileiro S.A., to develop and sell generic drugs in that growing market. And Pfizer agreed to pay an initial $200 million to the Indian biotechnology company Biocon Ltd. for the right to sell several of its insulin products for diabetics.

Analysts may ask about the impact of generic competition to Pfizer's blockbuster antidepressant Effexor XR, which began in July. Effexor had annual U.S. sales of around $2.75 billion.

They may also bring up the latest probe of Pfizer's marketing practices. Barely a year after agreeing to pay a record-breaking $2.3 billion in fines for illegal drug promotions that plied doctors with free golf and resort junkets, the Justice Department has joined a new whistleblower lawsuit against Pfizer. This one accuses Pfizer's Wyeth unit of promoting the off-label use of a transplant drug, Rapamune, in high-risk patients.

WHY IT MATTERS: As the top drugmaker and now one of the most diversified ones, investors will be looking to see how well Pfizer is expanding sales in emerging markets, handling pricing pressures from U.S. and European government health programs, dealing with generic competition and advancing experimental drugs needed to replace revenues as drugs go off patent. Its cholesterol fighter Lipitor, the world's top seller with about $13 billion in sales last year, loses patent protection late next year.

WHAT'S EXPECTED: Analysts surveyed by Thomson Reuters are expecting, on average, earnings per share of 51 cents and revenue of $16.68 billion.

LAST YEAR'S QUARTER: A year ago, before Pfizer acquired Wyeth's prescription, animal and consumer health products, it posted earnings per share of 43 cents and sales of $11.62 billion.

(This version CORRECTS fourth paragraph to delete reference to presentation of apixaban data)


US rep.: Estate tax rise has some planning death

Friday, October 29th, 2010 | Finance News

CHEYENNE, Wyo. – U.S. Rep. Cynthia Lummis says some of her Wyoming constituents are so worried about the reinstatement of federal estate taxes that they plan to discontinue dialysis and other life-extending medical treatments so they can die before Dec. 31.

Lummis, a Republican who holds her state's lone seat in the House, declined to name any of the people who have made the comments.

But she said many ranchers and farmers in the state would rather pass along their businesses — "their life's work" — to their children and grandchildren than see the federal government take a large chunk.

"If you have spent your whole life building a ranch, and you wanted to pass your estate on to your children, and you were 88-years-old and on dialysis, and the only thing that was keeping you alive was that dialysis, you might make that same decision," Lummis told reporters.

Lummis and other Republicans are fighting to renew the Bush-era tax cuts, which expire at the end of the year. The cuts exempt large inheritances as well as certain wage income, interest, dividends and capital gains.

The estate tax, first enacted in 1916, temporarily disappeared for 2010 while political wrangling stalemated efforts to revise it. The tax's top rate in 2009 was 45 percent, but estates smaller than $3.5 million — or $7 million in the case of married couples — were exempt. That left less than 1 percent of all estates subject to the tax.

Without further action from Congress, the estate tax will return in 2011 and will affect more heirs, with a lower exemption — $1 million — and a higher top rate — 55 percent.

Lummis said the children of some people choosing death over taxes told her of their parents' decision. She wouldn't identify them and said it would be their decision to come forward.


Study: Immigrants returning to work quicker

Friday, October 29th, 2010 | Finance News

WASHINGTON – Immigrants are returning to work quicker than their U.S.-born counterparts, but are earning significantly less than before the economic downturn, a Pew Hispanic Center study reported Friday.

Immigrants in the U.S. have gained 656,000 jobs since the Great Recession ended in June 2009. By comparison, U.S.-born workers lost 1.2 million jobs. The unemployment rate for immigrants fell over the same period to 8.7 percent from 9.3 percent. For American-born workers, the jobless rate rose to 9.7 percent from 9.2 percent.

Foreign-born workers "did better in the first year of the recovery, but not so much better that they have recovered the losses they suffered beforehand," said Rakesh Kochhar, Pew Hispanic's associate director for research. Immigrants — who make up 15.7 percent of the labor force — began losing their jobs about a year before U.S.-born workers, he said.

The study said immigrant wages fell sharply in the last year, and that Latinos experienced the largest wage drop of any group.

From 2009 to 2010, the median weekly earnings of foreign-born workers fell 4.5 percent compared to a loss of less than 1 percent for U.S.-born workers. In the second quarter of 2010, the median weekly earnings for U.S. workers was $653, compared to $525 for foreign-born workers, Pew said.

Hispanic workers, U.S.-born and immigrants, fared worst of all. They are the only group whose wages fell two years in a row, Kochhar said. Median weekly wages for all Hispanic workers fell to $480 in the second quarter from $504 two years earlier.

The Pew Hispanic Center defined foreign-born workers as all immigrants who arrived legally and illegally in the U.S., naturalized U.S. citizens and people born in Puerto Rico, who are U.S. citizens at birth.

The center said the reasons immigrant unemployment is decreasing are unclear. But foreign-born workers are more mobile, they exit and enter the labor market more frequently, and are less likely to get unemployment benefits — so they may have to find jobs sooner, even if the jobs they are taking are worse.

Immigration advocates said the findings don't show that foreign-born workers are taking jobs away from Americans. Foreign-born and U.S.-born laborers differ in education levels, where they live and what type of work they do, said the Immigration Policy Center.

But the Center for Immigration Studies, which supports tougher immigration laws, interpreted the data differently. Research director Steve Camarota said the findings raise questions about whether tighter controls might be needed — even on legal immigrants — during bad economic times.