WASHINGTON, Oct. 6 (UPI) -- Analysts see a positive future for Wyeth after the company raised its 2006 earnings forecast this week and boasted about several drugs in its pipeline.
Bank of America analyst Chris Schott rated Wyeth a "buy" and was apparently impressed by the company's pipeline and business model.
Schott increased his earnings per share estimates for 2006 by $0.04 to $3.16.
"This continues an upward revision trend for Wyeth's EPS forecast and reflects a combination of top-line execution and solid cost control," he stated in a research report.
Wyeth raised its EPS forecast for 2006 from $3.07 to $3.12-$3.18. The revised forecast is based on the assumption that Congress would pass the R&D Tax Credit legislation and it would be made retroactive to Jan. 1, 2006.
Wyeth Chairman and CEO Robert Essner said the guidance revision was due, in part, to a solid performance in the first half of the year and the success of key pharmaceuticals.
Wyeth highlighted seven new drugs in the pipeline, including Pristiq for depression and menopausal symptoms, Viviant for osteoporosis, Aprela for post-menopausal symptoms and a new version of its Prevnar pneumococcal vaccine.
"With seven new products on the horizon and 11 major late-stage clinical programs rapidly moving forward, Wyeth is leading the way in bringing new solutions for patients and physicians," said Essner.
"We believe these new treatments will help continue the strong growth generated by our broad portfolio led by Enbrel and Prevnar and could potentially be among Wyeth's top products by 2010," he added.
Robert Ruffolo, Wyeth's senior vice president, said the company plans to continue at a pace of submitting two new drug applications per year.
Schott thought Wyeth's Pristiq and Aprela looked promising as treatments for menopausal symptoms.
"Phase 3 data for (Aprela) showed a very clean side effect profile increasing our confidence that Aprela could offer advantages over Premarin and will likely be priced at a premium," he stated. "Coupled with Pristiq, Wyeth appears to have two intriguing women's health product opportunities."
However, Wyeth may have problems establishing Pristiq as a depression treatment. The data the company presented for that indication "demonstrated roughly comparable efficacy, but nausea rates were higher than expected as compared to Effexor XR," Schott noted. "In addition, based on the vasomotor symptoms filing, the lower 50 mg dose appears likely to be a titration dose. However, Wyeth seems to be differentiating the product through a broad label encompassing depression, vasomotor symptoms and eventually fibromyalgia."
Wyeth said it expects FDA action on Pristiq for depression in January and for the menopause indication in April. The company plans to file an NDA for Aprela next year.
Also coming down the company's pipeline is Torisel, a potential treatment for certain cancers.
Wyeth said Friday it filed a new drug application with the Food and Drug Administration for Torisel for the treatment of advanced renal cell carcinoma. The company also filed for regulatory approval with the European Medicines Agency, or EMEA.
If approved, Torisel would be the first in a new class known as mTOR kinase inhibitors.
Schott estimated Torisel could generate sales of $50 million in 2007, increasing to $400 million by 2010.
Wyeth is also battling a lawsuit threat on Prempro. A jury in Philadelphia concluded this week that Prempro caused a 66-year-old woman's breast cancer and awarded her and her husband $1.5 million.
However, the next stage of the trial, which begins next week, will be more important to Wyeth's bottom line, Prudential analyst Dr. Tim Anderson stated in a research report.
"The next stage is going to be the more important phase of the trial, as the jury could potentially render a mega-million dollar punitive damage verdict or could relieve (Wyeth) of liability if it finds that the company adequately warned patients of the breast cancer risks," Anderson wrote.
The company should win but, as Anderson noted, the outcomes of jury trials can be difficult to predict accurately.
"We have felt that the merits of the early cases probably favored (Wyeth), but, as we've seen in past product liability cases, predicting the outcome of a jury trial is often a tricky business," he stated.
Whatever the outcome, Wyeth is still facing approximately 5,000 more cases over Prempro, two of which are scheduled to begin before the end of the year. In addition, several more are slated to begin early next year.
