CIBC World Downgrades Pharmacia to 'Hold'

Analyst Mara Goldstein cut her rating after the FDA issued a non-approvable letter for the drug maker's pain relief medicine

CIBC World downgraded Pharmacia (PHA ) to hold from buy.

Analyst Mara Goldstein says the non-approval letter for parecoxib, an injectable COX-2 inhibitor for pain relief, is a major disappointment as the drug was projected to be a big growth driver in 2002 and 2003.

Goldstein notes the launch will be delayed from this year to mid-2003, at the earliest. She says prior estimates include $250M in parecoxib sales in 2002. She cut the $2.10 2002 EPS estimate to $1.94 and thinks the optimistic forecast is for shares to trade at a 10% premium to the S&P 500 on 2002, suggesting a value of $44.

Goldstein thinks investors should switch into Bristol Myers Squibb (BMY ) (strong buy, target $70), and American Home Products (AHP ) (buy, $70) and Johnson & Johnson (JNJ ) (buy, $105).

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