"The relevant “looming shortfall” number is the sales from territories where Zoloft is about to go off-patent. Is this happening in all significant territories?"
I don't know about all territories, but it's happening in the US next year. This is an excerpt from a December 2004 press release from Ivax Corp.
"IVAX Corporation (AMEX: IVX, LSE: IVX.L) has received tentative approval from the U.S. Food and Drug Administration (FDA) for its Abbreviated New Drug Application (ANDA) for Sertraline HCl tablets in 25 mg, 50 mg, and 100 mg dosage strengths. Sertraline HCl is the generic equivalent of Zoloft®, an anti-depressant, which is marketed by Pfizer, Inc. (NYSE: PFE). IVAX believes that it has first-to-file status on this drug and will be entitled to 180-days of marketing exclusivity. In 2002, Pfizer settled their infringement law suit with IVAX, and IVAX intends to launch this product in June, 2006. According to IMS data, U.S. sales for Zoloft were $3.06 billion for the twelve months ending in September 30, 2004."
I'm not sure what the status is ex-US, but if Ivax launches in June 2006, pricing will drop about 50% from current levels, and about 80% of the Zoloft market will convert to sertraline. So the loss to Pfizer in 2006 would be something on the magnitude of:
~$3.0 billion X 50% (generic launches in June 2006) = $1.5 Billion at risk x ~50% price as a %age of brand = $750 MM new market for 2H 2006 x 20% retained market share for the brand = $150 MM revenue to PFE in 2H 2006
So PFE's US revenue will drop from about $3 Billion in 2005 to about $1.6 to $1.7 billion in 2006 (i.e., the $1.5 Billion in 1H 2006 + the $150 Million in 2H 2006).
The Zoloft picture gets much worse for PFE in 2007, when Ivax's 180 day exclusivity ends. Depending on the number of generic competitors, the price will go progressively lower.
Market Data 
Markets 
AI
