Q. Will Pfizer Inc. revive? I am a longtime shareholder, and it has really done nothing for me in a long while. — B.P., via the internet

A. The elephant in the room when you talk about the world's largest drug company is its widely used cholesterol drug Lipitor.

Because Lipitor's annual revenue of $12.4 billion will decline dramatically when its patent expires in 2011, the 160-year-old firm is preoccupied with finding sales to replace it.

That is why it agreed to pay a significant premium to buy drug firm Wyeth for $68 billion in cash and stock. With consumer products such as Robitussin and Advil, prescription drugs and animal-health products, Wyeth would help Pfizer to diversify and increase revenue.

The combined firm would eliminate nearly 20,000 jobs, or 15 percent of its workforce, by the end of 2012, with the goal of $4 billion in overall cost savings.

Shareholder impatience is understandable, because Pfizer (PFE) stock is down 18 percent this year following declines of 22 percent last year and 12 percent in 2007. The firm is cutting dividend in half, starting in the second quarter.

Fourth-quarter net income fell 90 percent, to $266 million, due in large part to $2.3 billion in legal charges for a settlement resolving a federal investigation into the marketing of its now-withdrawn painkiller Bextra for uses other than those approved.

At its discounted price, however, the consensus recommendation on Pfizer is "buy," according to Thomson Reuters. That consists of four "strong buys," six "buys" and seven "holds."

Jeffrey Kindler, a former McDonald's Corp. executive named Pfizer's chief executive in 2006, began a programme of smaller, entrepreneurial research focused on specific therapies. The firm has solid cash flow and top-selling drugs such as Celebrex for arthritis, Viagra for erectile dysfunction, and Lyrica for epilepsy and other conditions.

Pfizer's size gives it an advantage in terms of number of products in its pipeline and the strength of its sales force. It will sell several generic drugs through recent deals with India-based Aurobindo Pharma Ltd.

Earnings are expected to decline 15 percent this year and increase 13 percent in 2010. The five-year annualised growth rate is projected to be about one percent, versus seven percent forecast for the major drug manufacturers.