Lipitor losses hit Pfizer
pharmafile | May 2, 2012 | News story | Sales and Marketing | Alzheimer's, Lipitor, Pfizer, patent expiry
Lipitor’s US patent expiry has inflicted heavy damage on Pfizer’s revenues, with global sales down 7% in the first three months of 2012.
A full 6% of this decline was down to falling sales, and a further one percent because of unfavourable impact of foreign exchange.
Pfizer’s chairman and chief executive Ian Read, said the firm’s strategy to become a smaller but more profitable company was on track, but it would be several years before the pruning would produce new shoots of growth.
Not surprisingly, US revenues were particularly badly hit by Lipitor’s demise, falling 15% compared with a year ago. International revenues were $9.5 billion, consistent with the prior-year quarter, which reflects 1% operational growth and a 1% unfavourable impact of foreign exchange.
US revenues represented 39% of total revenues in first-quarter 2012 compared with 43% as year ago, while international revenues represented 61% of total revenues in first-quarter 2012 compared with 57% a year ago.
Sales in the Established Products division rose 17%, primarily driven by the launches of generic versions of Pfizer branded primary care and specialty care products, as well as $383 million of US branded Lipitor revenues.
The company’s Emerging Markets unit revenues grew 9%, primarily due to continued volume growth across the portfolio, primarily in China, Russia and Mexico. The company said this was thanks to a more focused approach to promotional efforts for key products. This growth was partially offset by increased pricing pressures and changes in the timing of government purchases in Turkey.
Ian Read, chairman and chief executive, said: “I am pleased with our first-quarter 2012 financial performance, which was driven primarily by growth in certain brands including Celebrex, Enbrel and Lyrica, growth in key geographies such as China, as well as our continued ability to realise cost savings and efficiently allocate our shareholders’ capital.”
He said these positive factors had helped offset the impact of around $1.3 billion in revenue losses, the company managing to generate adjusted diluted EPS ‘nearly comparable’ to the same period last year.
“Regarding our key imperative to improve the performance of our innovative core, notable progress continues as we launched the Prevnar 13/Prevenar 13 vaccine for adults in the US and EU and Inlyta for advanced renal cell carcinoma in the US, while regulatory submissions for Eliquis, tofacitinib and bosutinib are under review in key markets, with regulatory action for each anticipated in 2012.”
Read said Phase III data phase for Pfizer’s Alzheimer’s disease candidate bapineuzumab would also be revealed in mid-2012.
He added: “I also remain encouraged by the emerging profiles of our next wave of innovative pipeline candidates which are in Phase II or early Phase III studies in areas such as oncology, vaccines, hyperlipidaemia and pain.”
Commenting on the company’s decision to sell its nutrition business to Nestlé for $11.85 billion, Read said it was “a significant milestone that I believe will unlock the trapped value of this successful business and create greater return for our shareholders”.
Pfizer plans to spend the proceeds on further share repurchases, and will regularly assess additional uses of the funds, with share repurchases remaining ‘the case to beat’.
Pfizer is now also weighing up the merits of selling its Animal Health business. Frank D’Amelio, chief financial officer commented: “We remain on-track to finalise a strategic decision for our Animal Health business this year and continue to expect that any separation of that business will occur between July 2012 and July 2013.
“Further, this quarter we continued to prudently allocate our capital by returning over $3.3 billion to our shareholders in first-quarter 2012, through $1.6 billion in dividends and $1.7 billion from the repurchase of 77 million shares.”
Andrew McConaghie
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