Perceptive insights from Wall Street
Sanford C. Bernstein
It's not every day that a pharmaceutical industry analyst actually breaks big news. But when Pfizer's ($PFE) new CEO Ian Read was contemplating selling or splitting off chunks of the company, Bernstein's Tim Anderson broke the story. Forbes, Bloomberg and others jumped on it, quoting Anderson's analyst note based on his surprisingly candid meeting with Read, suggesting that Pfizer might sell or split off as much of 40% of the company in order to focus more on basic pharmaceutical research.
"We recently met with Pfizer's new CEO Ian Read, and had we not heard it firsthand, we might not have appreciated just how serious he is about potentially splitting up the company," Anderson wrote, as quoted by Forbes.
It's true that Pfizer ended up hatching plans to shed less than predicted. But Anderson, an M.D. and M.B.A., accurately framed Read's evolving thinking at the time. And that's why Anderson matters. Analysts flood the market with assessments of CEO strategies and prognostications about how corporate decisions will affect a company's long-term value. But Anderson's take on a company's strategy, strengths or weaknesses is often unusually direct and uniquely perceptive. In July, for example, when AstraZeneca ($AZN) finally gained FDA approval for its blood thinner Brilinta, he candidly wrote that "we continue to believe that the product will disappoint commercially" and forecast that it would generate underwhelming sales because of generic competition.
Anderson's assessments as a true industry insider have driven the market. In July, Anderson argued that Eli Lilly's ($LLY) Alzheimer's disease drug solanezumab may only have a 10% to 20% chance of success. But, he predicted, if late-stage trials succeeded, the drug could double Lilly's share price and generate $8 billion in annual sales. As Bloomberg reported, Anderson's note drove the company's big cap share price to a 4% gain that day.
Anderson's sharp eye has also helped investors better understand the challenges facing Merck ($MRK). The company in May tapped Roche ($RHHBY) to help sell its new hepatitis C drug Victrelis. Anderson cut to the chase, explaining that the deal between rivals was an attempt to forcefully counter Vertex Pharmaceuticals' ($VRTX) Incivek in the marketplace.