Sector Wrap: Pharma sector down, Wyeth's Protonix sales drop

Despite the lower sales, the company's profit still beat Wall Street expectations and Wyeth said it is on track to meet full-year projections. But shares slipped 11 cents to $44.10.

In addition to Wyeth, Pfizer Inc., Merck & Co. and Eli Lilly & Co. have reported quarterly results in the past week. Shares of the latter three declined by up to 3 percent late Tuesday afternoon.

Goldman Sachs analyst James Kelly said so far, the drugmakers' earnings reports have shown lower-than-expected revenue, and softness in the U.S. market not being offset by international growth or the weaker dollar to the extent that those factors helped 2007 fourth-quarter results. Strong sales of Wyeth's arthritis drug Enbrel and invasive pneumococcal disease vaccine Prevnar were expected.

He maintains a "Buy" rating on Eli Lilly, given that its quarterly revenue growth exceeded full-year guidance and selling, general and administrative spending should moderate throughout the year. He remains "Neutral" on Merck, however, and trimmed his 12-month price target to $50 from $53. He said sales of the company's vaccines were weaker than he expected and must now ramp in the second half of the year to meet projections.

Schering-Plough and Bristol-Myers Squibb report Wednesday and Thursday, respectively.

In afternoon trading, Merck shares fell $1.17, or 3 percent, to $38.46 and Bristol-Myers dipped 48 cents, or 2.2 percent, to $21.35. Schering-Plough shares fell 22 cents to $17.05 and Lilly slid 49 cents to $49.10.

Pfizer fell 38 cents, or 2 percent, to $19.82. Only two major drugmakers bucked the downward trend, GlaxoSmithKline PLC and Johnson & Johnson, each up about 1 percent.