Pfizer stumbles in third quarter
pharmafile | November 2, 2012 | News story | Research and Development, Sales and Marketing | Ian Read, Lipitor, Pfizer, Prevnar, Q3
Pfizer has experienced a worse than expected third quarter, due to disappointing sales of paediatric vaccine Prevnar and a surprise contraction in emerging market revenues.
The New York-based firm had postponed its Q3 conference as Hurricane Sandy hit the east coast of the US, but its operations escaped the worst of the devastation.
The same cannot be said for Lipitor, which took the full force of generic competition in the period. Its one-time flagship Lipitor saw sales plunge 71%, which contributed to an overall decline in Pfizer sales of 16 per cent.
Sales of Prevnar 13 fell 14% to $868 million, while sales of its older Prevnar 7 vaccine dropped 17% to $81 million. The Prevnar vaccines are now Pfizer’s second-biggest-selling franchise, but like many vaccines products, are vulnerable to erratic sales patterns.
Meanwhile the firm’s newest products have not put in spectacular performances – targeted lung cancer treatment Xalkori and kidney cancer treatment Inlyta earned $38 million and $30 million respectively.
But aggressive cost cutting across all departments has yielded major savings, and twinned with the sale of sell its infant formula business to Nestle for $12 billion, the company has plenty of cash to spend on share buy backs, which will help mollify investors. Further cash will be generated when it spins off around 20% of its animal health business, Zoetis, in an IPO next year.
Pfizer will spend an extra $10 billion in share repurchases following the nutritional business sale, adding to a $10 billion repurchase programme already under way.
However, Pfizer and its shareholders know that savings and sweeteners aren’t the basis of long-term success, and are looking to its pipeline for future growth.
Pfizer’s chief executive Ian Read said: “I am very pleased with the recent FDA approval of Bosulif (bosutinib) for chronic myelogenous leukaemia, as well as approval of Inlyta (axitinib) for advanced renal cell carcinoma and conditional marketing authorisation of Xalkori (critzotinib) for advanced non-small cell lung cancer, both in the EU.
“I also look forward to regulatory action for tofacitinib in moderate-to-severe rheumatoid arthritis and Eliquis (apixaban) in atrial fibrillation in the US, EU and Japan as well as Bosulif in key international markets.”
Finally, a 2% decline in emerging markets to revenues of $2.39 billion added to the company’s poor quarter. The stronger dollar cut into the value of sales. By contrast, emerging market sales had risen 8% in the preceding three months.
Unfavourable exchange rate interest rates and a number of regional factors have been blamed for the result, which Pfizer will seek to reverse as quickly as possible.
Pfizer chief financial officer Frank D’Amelio says it expects annual emerging market sales to grow in the ‘high-single-digit’ percentage range in the next few years, fuelled by growing healthcare budgets across developing regions.
Andrew McConaghie
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