Pfizer warns of slowdown in 2005
pharmafile | October 27, 2004 | News story | |Â Â Â
Pfizer has warned that growth in 2005 could be held back by generic competition and other increasing market pressures.
The company's top executives say that political, legal and regulatory demands are likely to slow growth prospects next year, but say long-term prospects remain strong and still on track to achieve its goal of 20 major regulatory filings between 2001 and 2006.
Chairman and chief executive Hank McKinnell said: "We continue to generate strong earnings growth in 2004 in spite of continuing pricing pressure; new branded competition; new generic competition from the loss of patent exclusivity; difficult political, legal, and regulatory environments; and the effects of less favourable than expected foreign exchange rates."
David Shedlarz, executive vice president and chief financial officer said it was too early to project Pfizer's 2005 financial performance but said a number of directional factors were already known or emerging.
"The company expects a substantial impact from the loss of exclusivity of certain major products. Four products – Diflucan, Neurontin, Accupril, and Zithromax – with US sales for the 12 months ending September 2004 totalling more than $5 billion, face reduced revenue in 2005 due to past or possible future loss of marketing exclusivity."
Pfizer's profits for the third quarter grew by 13% to $4.2 billion, whilst revenues saw only a 4% increase to $3.3 billion, compared to the same period in 2003. Growth was led by sales of cholesterol and arthritis treatments, with the weaker US dollar also playing a part.
The company's pharmaceutical operations revenues rose 3% to $11.3 billion for the third quarter – the first time for a number of years that growth has been lower than in its consumer healthcare or animal health businesses.
Karen Katen, executive vice president of the company and president of Pfizer Global Pharmaceuticals, said: "While our environment is tough, we're tougher. And we're attending to both the top line and bottom line with disciplined strategies to sustain future business performance."
The company's top five medicines – Lipitor, Norvasc, Zoloft, Celebrex, and Neurontin – together account for slightly more than half of human pharmaceutical revenues year-to-date. Each has delivered at least $2 billion in sales already this year, while Viagra and Zithromax have each surpassed $1 billion.
Dr John LaMattina, president of Pfizer global research and development, said: "Pfizer's new product pipeline continues to grow, and our late-stage candidates are progressing well."
Its first-in-class CCR-5 inhibitor for treatment of HIV disease, UK-427,857, has completed phase II testing and will progress into phase III during the fourth quarter. An insomnia treatment in co-development with Neurocrine Biosciences is currently under review by the FDA, while asthma drug Daxas, (co-developed with Altana Pharma) and inhalable insulin Exubera (with Sanofi-Aventis and Nektar Therapeutics) are both under review in Europe.
Cost benefits from Pfizer's acquisition of Pharmacia will also start to tail off, from $3.5 billion in 2004 to about $4 billion in 2005.
Meanwhile, if the dollar weakens further relative to major currencies, Pfizer will gain an extra $1.3 billion, or 3% revenue but if exchange rates remain static, the company's balance will be unaffected.
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