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We knew what was coming -- the day is finally here Pfizer's patent on the cholesterol drug Lipitor expires two day is a popular drug to generate over ten billion dollars and revenue for that company.
Actually you've been following the story this puts 20% of their revenue at risk it now if they not only -- out of.
Well that's a good question I mean has been around since 1997 they knew the patent is gonna expire at two day but my -- -- -- the mother hole Blockbuster drugs.
But five -- very aggressive in trying to handle what's gonna happen once it goes -- of the generic market for instance they've already struck deals with us some big.
Drug benefits agencies such as UnitedHealth then -- Express Scripts offer discounts on love -- the -- also.
Lowering the co pay down of four dollars average generic cost full co -- is around ten dollars.
He struck these deals at least for the next six months of some of these deals go out to the end of December of next -- so -- going to be taking a loss on this but ultimately.
They're trying to Foster.
Loyalty to the brand once there's more competition out there that's the big issue here that yes it's a huge structural.
The guy who is gonna go after Pfizer well they've been a big -- -- -- and it had plenty of time to come up with something look on the -- the first 180 days is actually strictly -- when it comes to a patent and expiring on a popular drugs and generics are available.
Essentially two companies will be able to offer.
A generic alternatives the first one is -- -- -- laboratories is an Indian subsidiary of the Japanese that company.
This company has have problems they have been on the federal investigation.
Questions whether there is FDA approval -- work in favor of Pfizer.
There is another company Watson's pharmaceuticals.
Struck a deal with Pfizer -- -- -- -- -- makes the drug but Watson's will actually.
Promoted as a generic that 70% of those profits go back to finds -- so for the first 180 days six months sounds confusing.
Not as much competition as you'd think.
Offer -- 180 days game -- there will be many manufacturers coming to the market offering generic versions.
But -- until being very aggressive I think this could be a template for other dot drug companies whose big drugs.
Eventually gonna run out on the patent -- I think Pfizer is really trying desperately to hang on to its market share as much as.
Possible Tyler what do you make of all of this from a stock perspective we were showing Watson -- you got the other big names in the space that could eventually have such as -- to go after.
Buys or whether it's Eli -- -- jar and today what we'll -- right now big pharma is cheap so I I think in general it's a great place to be abusing these as opportunities to buy and I and I think investors will be pleasantly surprised with -- -- I think you know it's it's all the bad news has been out there.
This -- been built into the stock as far as what's you know going on today the -- down.
Well I I wouldn't mind buying the stock here even other's faces up we were -- -- entire sector all got substantially but obviously a -- piece you have is because of that.
The broader her yeah and they're still you know cheap on on a piece standpoint in general so you know we still like the sector as a whole but that stock you know we we we like as well.
Which is actually about brand recognition -- the faithful -- of the consumer because now.
We didn't -- ten years ago to see ads for drugs would all be fun disclaimers on that you can take is that -- go ahead -- they're gonna happen to your body if you take.
And then -- -- -- has a smaller base by exactly the industry has changed how they mark.
Very much and and you know for Lipitor there is of great brand recognition and that trust and that's what they'll be playing on.
If they can keep these levels down at least on the co pays for a little while.
That will help analysts believe that they can keep a 40% share of the market through the end of next year and so.
But you're right there's going to be a lot of our generics out there we're gonna have all sorts of appetizing going on but Lipitor for lying on its name.
And you know the analyst community that covers Spicer Tyler the other looking for earnings per share growth of 24%.
For next year's actually raised their outlook you particularly the opt out that they -- cut their outlook and they raised their outlook Anheuser.
That -- we we think again there's great opportunity and and this is just.
You know you get a a example of investors punishing the stock they see what's going on the stock is down and that creates opportunities and great story actually thinking -- that.
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