MADELEINE BRAND, host:
Back now with DAY TO DAY.
Drug maker Pfizer is watching its stock sink today; this after the company announced it has stopped developing a new cholesterol drug that would have boosted so-called good cholesterol.
MARKETPLACE's Janet Babin is here. And Janet, this drug was supposed to be Pfizer's great big hope for the future. So this announcement must have surprised analysts.
JANET BABIN: That's right. It did, Madeleine. Just last week, at the company's R&D day on Thursday, Pfizer officials are really chatting this drug up. It's called Torcetrapib. And they talked about it with a lot of enthusiasm. And this is a drug, as you said, that could have been very important to Pfizer, because it could have replaced the company's current blockbuster drug, which is Lipitor.
And a lot of people have heard of Lipitor. It's the drug that can lower your bad cholesterol or LDL cholesterol. And according to some studies, it can cut your risk of a heart attack up to 30 percent. And that made it the world's biggest selling cholesterol drug. It made Pfizer $12 billion last year in sales.
But the problem for Pfizer is that the patent on Lipitor expires in a few years. And this new drug, Torcetrapib, was supposed to be able to replace Lipitor in sales, because it has the ability to raise your levels of so-called good cholesterol. But apparently that isn't what the drug does, because over the weekend, Pfizer halted, abruptly, the clinical trials. Apparently there had been an unexpected number of deaths in the people participating in the trial.
BRAND: And so what's the company going to do now?
BABIN: Well, Pfizer came under new management a few months ago and did talk then about installing a new business model. And I spoke to Hammond Shaw(ph) at HKS and Company, and he says Pfizer's also going to have to make a tough realization.
Mr. HAMMOND SHAW (HKS and Company): The days of marketing new drugs with only marginal benefit but supported by this huge sales force and marketing machine are over. You have to come up with newer drugs which have meaningful benefit. Those are the only ones which will command premium prices.
BABIN: But Shaw says, you know, it's not just Pfizer. It's really the whole industry that was relying too heavily on sales and marketing.
BRAND: All right. Thank you, Janet. That's Janet Babin of Public Radio's daily business show, MARKETPLACE, produced by American Public Media. Transcript provided by NPR, Copyright NPR.
