Biotech Values

[DewDiligence]

Re: Effect of Viagra decision on PFE’s valuation

US Viagra sales in 2Q11 had an annualized rate of exactly $1B, which is 1.5% of PFE’s total annual worldwide revenue from all sources. However, Viagra in the US market has a higher profit margin than PFE’s average for all products, so the contribution of US Viagra to PFE’s overall profits is presumably in the 2-3% range.

An additional 2-3% of profit for an extra seven years is not a huge difference maker, but it will help PFE meet its EPS guidance for 2012 (#msg-65791666).