Earnings Preview: Pfizer Focused on New Drugs
Pfizer Inc. will tout a surge of new drug approvals, and an acquisition that's brought the world's biggest drugmaker another new medicine, when it reports fourth-quarter results.
CEO Ian Read will note the key approvals, led by Eliquis, a potential blockbuster that's part of a new generation of blood thinners.
Read likely will update investors on efforts to boost revenue and streamline Pfizer by shedding noncore businesses, including the pending $11.5 billion sale of its nutrition business to Nestle SA and the planned spinoff of the $4.2 billion-a-year animal health business. Last week, Pfizer disclosed plans to sell 86.1 million stock shares in the new company, Zoetis, for $22 to $25 each.
Company executives should discuss early sales trends for the newest drugs and one approved in September: Bosulif for treating the blood cancer chronic myeloid leukemia in patients with a specific genetic variation.
The New York-based company really needs the drugs. Generic rivals are wiping out sales of roughly two-thirds of its medicines. While its rivals also face generic competition, Pfizer has a particularly daunting job: trying to make up for billions lost since cholesterol fighter Lipitor got U.S. generic competition in December 2011.
Lipitor had reigned for about a decade as the world's best-selling drug, with peak sales around $13 billion. It still brought Pfizer more than $10 billion annually when the generics hit. Patent protection also has ended in many other big markets.
Lipitor sales plunged 71 percent to $749 million in the third quarter, cutting net income 14 percent. None of the new drugs can replace those billions, but together they'll help.
Pfizer and partner Bristol-Myers Squibb Co. plan to launch Eliquis, a twice-a-day pill, with lots of fanfare in early February. It was approved the last week of December in the U.S. and Japan, the two biggest prescription drug markets, after getting European Union approval in 2011.
Analysts rate Eliquis the best of three new anticlotting drugs. However, Pradaxa, from German drugmaker Boehringer Ingelheim, and Xarelto from partners Johnson & Johnson and Bayer Healthcare, have been on the U.S. market for at least 18 months. It could be tough to persuade patients and doctors satisfied with Xarelto or Pradaxa to try Eliquis.
Meanwhile, Xeljanz, or tofacitinib, was approved by the Food and Drug Administration in November to slow progression of rheumatoid arthritis. It's the first drug in a promising new class called JAK inhibitors.
Pfizer's blockbuster vaccine against meningitis and other pneumococcal infections, Prevnar 13, got EU approval on Jan. 8 for children aged 6 to 17. It was already approved for younger children and adults 50 and older, and is approved in the U.S.
In October, Pfizer won conditional EU approval for Xalkori, for lung cancer patients with a particular genetic mutation. Pfizer must submit data from a recently completed study to get full marketing approval.
And in late November, Pfizer bought NextWave Pharmaceuticals Inc., gaining its recently approved long-acting liquid medicine for attention deficit disorder, Quillivant XR. It was launched in the U.S. on Jan. 14. NextWave is also developing an extended-release chewable version.
Pfizer executives likely will note recent results from two studies of its smoking cessation pill Chantix, particularly one that found it safe for patients with depression. It's been on sale since 2006, but EU regulators requested the study because of concerns over side effects, including depression and suicidal thoughts. The results will help Pfizer fight more than 2,000 lawsuits blaming the drug for psychiatric side effects.
The company also should give a 2013 profit forecast.
Pfizer's top-selling drugmaker crown is threatened by all the generic competition to its drugs for the masses. It's been cutting costs by slashing jobs and selling factories and office buildings since its $68 billion acquisition of Wyeth in 2009. Now it needs to rebuild its revenue base, and the recent spike in medicine approvals helps.
Before those approvals, Pfizer had been frustrated by numerous failures of experimental drugs late in expensive patient testing. Read has narrowed the fields in which Pfizer is developing new drugs as it focuses more on expensive cancer and other targeted drugs.
Analysts surveyed by FactSet expect, on average, earnings of 44 cents per share and sales of $14.35 billion.
Pfizer posted net income of $1.44 billion, or 19 cents per share, on revenue of $16.75 billion.
Date: January 25, 2013
Source: Associated Press