NEW YORK (CNNMoney.com) -
Pfizer shares surged Monday after several analysts made positive comments about the stock following the drugmaker's victory in a battle over the patent for Lipitor, the world's best selling prescription medicine.
Pfizer (up $2.36 to $24.94, Research) stock jumped about 10 percent in morning New York Stock Exchange trading and more than 84 million shares had changed hands by lunchtime. Volume was extremely heavy from the opening bell, with more than 66 million shares moving in the first 90 minutes or so, well above the stock's normal average for the full trading day.
The rally sparked other drug stocks higher as well.
Merck (Research) jumped about seven percent while Schering-Plough (up $1.00 to $20.77, Research) added about 4.5 percent and Bristol-Myers Squibb (up $0.58 to $22.60, Research) climbed more than three percent.
After the close on Friday, the New York-based drug giant said a U.S. court had rejected a patent challenge over Lipitor, a cholesterol-lowering drug with $10.8 billion in 2004 sales. That challenge came from the Indian generic drug maker Ranbaxy, which said it would appeal the ruling.
The court's decision secures Pfizer's Lipitor patent until 2011, potentially meaning tens of billions of dollars in additional sales for the drug giant.
Uncertainty over the Lipitor litigation had been a big cloud over the company.
Chris Schott, analyst for Banc of America Securities, released a note projecting five percent earnings growth for Pfizer in 2006. This is in contrast to Pfizer pulling its earnings guidance for 2006 and 2007 back in October, with the promise that it would release these figures next year.
Barbara Ryan, analyst for Deutsche Bank, raised her 12-month price target for Pfizer stock to $34 per share, up from $27. In addition, Ryan raised the rating for Merck, America's second-biggest drug maker, to "buy," after keeping the company on "hold" since 2001.
And Morgan Stanley also raised its price target for Pfizer to $27 from $25, Reuters reported.
Does the latest Lipitor patent ruling make Pfizer a buy? Read more here.
To read more about Pfizer's patent battle, click here.