Wyeth stock drops, despite strong earnings
Wyeth slips on concerns over Pristiq; drugmaker trumped earnings expectations.
NEW YORK (CNNMoney.com) -- Wyeth stock dropped 2 percent in Thursday afternoon trading despite a strong earnings report, and analysts think that the experimental drug Pristiq is to blame.
"I think there are concerns around Pristiq, and the [FDA target date for possible approval] on July 23rd," said Barbara Ryan, analyst for Deutsche Bank North America.
Wyeth (down $1.09 to $55.52, Charts, Fortune 500) has filed Pristiq, an experimental drug to reduce hot flashes in post-menopausal women, to the Food and Drug Administration, and the agency is expected to complete its review on Monday.
Wyeth executives said, in a call with analysts, that they are experimenting with low doses of Pristiq to try and avoid the nausea side effects associated with the higher doses, said Joseph Tooley, analyst of A.G. Edwards. Tooley said the call left him thinking the company was destined for an approvable letter on Monday, meaning that the FDA would request more information from the company before granting approval.
"We approached today thinking that Pristiq would get an approval on the 23rd for vasomotor symptoms [hot flashes]," said Tooley. "But based on that discussion, we're thinking it might get an approvable letter. The drug has a significant amount of nausea associated with it."
"It was a bit of a surprise," added Tooley.
Wyeth trumped earnings expectations for the second quarter on Thursday. The Madison, N.J.-based drugmaker reported a 10 percent jump in revenue to $4.75 billion compared to the same period last year, as well as an increase in earnings per share, to 87 cents, from 78 cents.
Wyeth is the fifth-largest U.S. drugmaker in terms of sales, behind Johnson & Johnson (Charts, Fortune 500), Pfizer (Charts, Fortune 500), Merck (Charts, Fortune 500) and Abbott (Charts, Fortune 500).