Pfizer 2Q mixed
NEW YORK, USA – PFIZER’S second-quarter net income more than quadrupled, helped by the sale of its animal health business. The world’s second-largest drugmaker beat Wall Street’s earnings expectations, though revenue continued to decline as patents expire on drugs that had once been blockbusters for the company.
When drug patents expire, cheaper generic versions flood the market, and most patients quickly switch to them.
The biggest impact for Pfizer has been on its cholesterol fighter Lipitor, which was the world’s best-selling drug for nearly a decade until it lost exclusivity in the US in 2011 and in much of Europe last year. Revenue from Lipitor, which once brought in about US$13 billion a year, dropped 55 per cent to US$484 million in the second quarter.
Pfizer, which makes Viagra, along with the pain medicines Lyrica and Celebrex, earned US$14.1 billion, or US$1.98 per share. That compares with US$3.25 billion, or 43 cents per share, a year earlier.
Amid declining revenue, Pfizer has been working to sell off non-core businesses and focus on prescription medicines, particularly for disorders that lack exceptional treatments.
The company’s jump in second-quarter profit came largely from the spin-off of its animal drug business Zoetis. The company also benefited from a US$1.4 billion patent settlement with two companies that sold generic versions of its popular heartburn treatment Protonix while they were challenging its patent, which hadn’t yet expired. Under the settlement, the generic drugmakers will pay Pfizer and its partner in marketing Protonix, Japan’s Takeda Pharmaceutical, US$2.15 billion, with Pfizer getting 64 per cent of that.
Excluding the one-time gain from the sale of its remaining 80 per cent stake in Zoetis Inc. and the patent settlement, earnings were 56 cents per share, a penny better than Wall Street had expected.
Pfizer Inc has already divested its nutrition and capsule-making businesses and on Monday, announced the reorganisation of its commercial operations into three divisions.
One of those divisions will be devoted to products that are losing patent protection. Another will handle drugs with years of patent protection remaining. The third will sell vaccines, cancer treatments, and consumer products.
The company said overall revenue fell seven per cent to US$12.97 billion, which is just short of the US$13.21 billion that analysts polled by FactSet had predicted.
Revenue from Prevnar 13, a vaccine for ear infections, meningitis and other pneumococcal infections, fell 3 per cent to US$969 million. Prevnar is the biggest-selling vaccine in history, with nearly US$4 billion in yearly revenue.
The bright spots during the quarter included revenue from sales of Lyrica, for fibromyalgia and other pain, which grew 10 per cent to US$1.13 billion, and anti-inflammatory pain reliever Celebrex, up eight per cent at US$715 million.
Sales of Viagra were nearly flat at US$484 million, despite a precedent-setting move in May to start selling impotence drug Viagra online to counteract the massive amount of counterfeiting of the pill on the Internet.
The New York company maintained its full-year adjusted earnings outlook of US$2.10 to US$2.20 per share. Analysts forecast US$2.16 per share.