Biotech Values

[drbio45]

PFE has $26B in cash, although some of this is in foreign subsidiaries. If they hypothetically used all of this cash to buy back shares at the current share price, it would decrease the number of shares outstanding by 25%. This would boost EPS to a larger degree than any other action including an acquisition or licensing of a blockbuster drug.


what is the point of increasing earnings per share in the short run when their earnings are going to fall off of a cliff in 2011.

the loss of lipitor will destroy their earnings power. what they should do is hold onto their cash unless their see an asset that will be accretive to their earnings by 2011. In 2011 unless they aquire good drugs they will be trading at cash.