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Pfizer's Potent Pill For Impotence

Inside Wall Street


When he's scouting winners, Lew Rabinowitz usually sticks to media stocks. But in 1998, Rabinowitz, president of R. Lewis Securities, is focusing on a pharmaceutical biggie: Pfizer (PFE).

The stock, like that of many other drugmakers, has been on the rise: Trading above 77 on Jan. 13, Pfizer is close to its 52-week high of 80. How much higher will it go? "It should hit 100 in a year," insists Rabinowitz. One event he's banking on: Food & Drug Administration approval this spring of Viagra, Pfizer's remedy for impotence.

"Viagra could be the biggest drug in Pfizer's history," argues Rabinowitz. He says investors have yet to zero in on Viagra's impact on Pfizer's earnings. The FDA has slated the drug for "expedited review," meaning the process will take six months. Viagra filed in September. Says analyst Jami Rubin of Schroder & Co.: "That enhances our 1998 earnings estimate of $2.04 a share, with room for upward revisions."

Rubin had assumed Viagra revenues of $75 million this year. "We now believe sales could approach $200 million to $300 million if approval comes by April or May," she says. Rubin says that Viagra, an oral therapy, in a few years could produce annual sales in the $2 billion-plus range. Considering its "easy oral administration and lack of side effects, Viagra will address a major unmet medical need," says Rubin. She notes that the clinical data suggest an 80% improvement, on average, in erectile function when a man takes Viagra. A smaller company, Zonagen, has also come out with an impotence pill called Vasomex (BW--Sept. 29).

Pfizer's price-earnings ratio is among the industry's highest: 38 times 1998 earnings. No matter, says Rabinowitz. "Viagra will be a blockbuster."BY GENE G. MARCIAL

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