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Pfizer shares rose 12.1 per cent in pre-market electronic trading in New York on Monday after the world’s largest drugmaker won a critical US patent ruling on Friday for cholesterol drug Lipitor, the backbone of its current and future profit growth.

The sharp rise indicates how much Pfizer investors were concerned by patent challenges to Lipitor, the group’s biggest selling drug.

Pfizer won a federal court decision upholding its two main US patents for Lipitor until 2011. The ruling defeated Indian drugmaker Ranbaxy Laboratories’ attempt to launch a cheaper generic version of Lipitor in the next few years and follows a similar win for Pfizer in a UK court in October.

Shares in Merck were also signalled to rise 3.3 per cent in New York while the pharmaceutical sector in Europe also rallied on Monday.

Timothy Anderson, analyst at Prudential Equity Group, said: “With this overhang out of the way, now the real test begins – which is to see how much of an appetite investors have for Pfizer above and beyond an immediate move up in share price.”

Challenges remain for Pfizer. It is trying to offset the loss of $14bn in annual sales due to patent expiries on drugs such as anti-depressant Zoloft.

Added to this is the significant emerging pricing pressure in the US healthcare market, the cornerstone of industry profitability.

Pfizer’s profits are expected to fall this year, and uncertainties such as the slowing cholesterol market prompted it to withdraw its forecasts for the next two years. Its shares recently neared eight-year lows, while Pfizer has sought to reassure investors with its $4bn cost-cutting plan and a 26 per cent rise in its dividend.

Investors will also be looking to February, when Pfizer is expected to renew earnings guidance for the next few years and give its view of the cholesterol market.

Lipitor and Zocor, Merck’s cholesterol drug, are the world’s top two biggest selling drugs with $12bn and $4bn annual sales respectively.

But Zocor loses US patent protection next year. Cheaper generic Zocor could affect the growth of Lipitor, which accounts for about 24 per cent of Pfizer’s $51bn in total sales.

Vytorin, marketed by Schering-Plough and Merck, and AstraZeneca’s Crestor are newer competitors.

Another key for Pfizer’s future is forthcoming data on torcetrapib, a treatment that raises so-called “good cholesterol” – which it plans to sell in combination with Lipitor.

But competition is emerging there too, as Merck last week unveiled an experi-mental treatment to raise good cholesterol.

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