Credit Suisse modestly boosts estimates for Pfizer (PFE) after the company reaches an important patent settlement with Ranbaxy over generic Lipitor:
The deal should delay generic competition for Lipitor and Caduet in the US from either Mar ’10 or Jun ’11 until Nov 30, 2011, absent an unforeseen development in the ongoing Teva/PFE litigation surrounding the ‘995 patent.
Given the concern over US cash flows and the company’s ability to pay its generous dividend moving forward, today’s news provides some increased comfort, but the company will still face challenges in accessing US-domiciled cash to fund its current dividend. This pressure will accelerate in 2011 when Lipitor is finally lost (absent any major asset acquisition that increases US cash flows).
CS maintains Neutral rating but raises its EPS estimates:
2010: $2.48 from $2.39
2011: $2.50 from $2.11
2012: $1.82 from $1.78
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