UPDATE 4-Pfizer strategy for Lipitor fails to soothe

(Adds CEO quotes, closing share price)

By Ransdell Pierson and Bill Berkrot

NEW YORK, March 5 (Reuters) - Pfizer Inc (PFE.N) said on Wednesday it plans to expand in emerging markets and speed up the launch of new drugs to offset looming generic competition for its $12 billion-a-year Lipitor cholesterol fighter.

The world's largest drugmaker, whose shares fell almost 1 percent, also said during a meeting with analysts it will establish a new unit for cancer drugs and will boost the number of drugs in late-stage trials by late next year.

But industry analysts said Wednesday's review by top company executives of their strategy and pipeline of experimental medicines failed to allay concerns about flat Pfizer revenue and the drugmaker's failure to launch many big selling products over the past five years.

"It's more of the same," said Damien Conover, an analyst with Morningstar. "We're not seeing a dramatic shift that I think Pfizer needs to take."

Morgan Stanley analyst Jami Rubin called Pfizer's pipeline "interesting," but said most of the products described in the meeting were only in early stages of testing.

"There's no data and their track record does not inspire a lot of confidence, so it's more of a wait and see kind of story," Rubin said.

Pfizer said its products are now sold in 110 cities in China, but they will eventually reach more than 650 of its cities. Moreover, the company plans to garner $1 billion in annual sales by 2012 from South Korea, and aims to also boost its sales in Latin America and Eastern Europe.

But overseas markets are far less lucrative than the United States, which has no strict government price controls and allows direct-to-consumer advertising.

Pfizer said its aspirations for wider geographic reach and for more approved drugs are critical as it braces for U.S. generic competition, possibly by 2010, for Lipitor.

The company is already grappling with U.S. generic competition for antidepressant Zoloft, blood pressure treatment Norvasc and its Zyrtec antihistamine. Dramatic sales declines for those one-time blockbusters are one reason Pfizer has cut more than 10,000 jobs over the past year.

"We know we haven't been productive enough over the last few years," said Martin Mackay, Pfizer's research chief.

But Pfizer said a reversal of fortune could come, as it aims to seek 15-20 regulatory approvals between 2010 and 2012 -- with about two-thirds of the submissions involving new products and the remainder to involve new uses of existing medicines.

The company expects to have as many as 28 drugs in late- stage, or Phase 3 trials, by late 2009. They include treatments for cancer, rheumatoid arthritis and pain.

Seamus Fernandez, an analyst with Leerink Swann, said the company's ambitions were laudable, but will be tough to realize.

"My definition of success is not did you get a product through to Phrase 3; my definition of success is did you get a product approved," Fernandez said. "They have a very, very hard road ahead."

Pfizer became the world's biggest drugmaker through acquisitions of U.S. drugmakers Warner-Lambert and Pharmacia Corp, but its resulting $7 billion annual research budget has borne little fruit.

Company Chief Executive Officer Jeff Kindler said caution should be the byword for future big deals.

"One has to be very thoughtful in evaluating whether the strategic value for shareholders of a given transaction, but particularly a mega-merger, outweighs the downside," he said.

"It can be very disruptive; it can slow things down and distract people. I really do believe that happened in research and development" at Pfizer, Kindler told journalists after the meeting.

Company shares are at a 10-year low, and down 54 percent from their peak in the $48 range in early 1999, despite an industry-topping stock dividend. Pfizer said it intends to keep the dividend at current levels for the foreseeable future.

The company projected 2008 revenue of $47 billion to $49 billion, or as much as 3.2 percent lower than in 2007.

Even so, because of aggressive cost cuts, Pfizer affirmed it expects full-year 2008 earnings to rise as much as 11 percent.

Pfizer shares closed down 20 cents to $22.04 on the New York Stock Exchange. (Additional reporting by Lewis Krauskopf; Editing by Andre Grenon)