Pfizer (NYSE:PFE) recently recalled 65,000 bottles of Advil Liqui-Gels as they had strong odor due to over-processing of an ingredient in the medicine.  Separately, Merck (NYSE:MRK) is facing widespread furor over Propecia, a hair growth drug. Propecia and its generic Finasteride have been found to cause virility side effects. Pfizer (NYSE:PFE) is the largest drug maker in the U.S. and operates in four segments – pharmaceuticals, animal health, consumer healthcare and nutrition, whereas Merck (NYSE:MRK) has operations in pharmaceutical, animal health, consumer care and alliance segments.
Pfizer Recalls Advil Liquid-Gels
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Pfizer’s Advil is a pain relief medicine with an inactive ingredient gelatin. Pfizer found that the over-processing of gelatin caused strong odor and it hence recalled 650,000 units of the medicine. Drug makers have lately become increasingly careful about product quality as substandard products can cause litigation. Many pharma companies have been shelling out loads of cash into settlement of such issues. (See Pharma Updates: Pfizer to Pay $3.3 Million for Zyvox Probe, Merck Drug Rejected and Abbott Settles Depakote Suit For $1.5 billion; Urges FDA To Block Generics)
Advil is a consumer healthcare product reported under diversified legacy drugs and alliances. The continued quality issues may hamper the brand’s reputation. If sales are impacted, the company may lose further market share in diversified legacy drugs and alliances segment, which contributes nearly 32% to our $25 price estimate for PFE.
Merck’s Propecia Ruining Libido
Many patients who started using Propecia to regain lost hair have reported myriad conditions like anxiety, panic attacks, cognitive dysfunction and chronic insomnia.  However, the most horrifying side-effect is loss of libido with many victims showing signs of impotence.
Kevin Malley, a 30-year-old victim, was so devastated by the side-effects that he started a hunger strike outside Merck’s corporate headquarters in New Jersey.
Propecia is a drug which restricts the conversion of male hormone Testosterone to DHT, which has been associated with hair loss in males. However, the drug may have caused hormonal imbalances in the recipients impacting their virility. Many patients have shown no signs to regain libido even months after they stopped using the drug. Merck might have to stop the production of Propecia amid this rage.
Revenue from Propecia is reported in the legacy pharma, animal and consumer health segment of Merck, which contributes nearly 22% to our $42 price estimate. Propecia might contribute to the Merck’s declining market share in legacy pharma, animal and consumer health.Notes:
- Pfizer Recalls 650,000 Bottles of Advil Liqui-Gels, bloomberg.com, May 19, 2012 [↩]
- Kevin Malley’s hunger-strike at Merck highlights Propecia’s devastating effects, examiner.com, May 18, 2012 [↩]