Pfizer earnings up 26% despite lower sales of many drugs

Pfizer has reported a healthy rise in earnings for the third quarter, helped by cost-cutting, and although revenues fell 3%, they beat analyst expectations.

Net profit came in at $2.89 billion, an increase of 26%, thanks to cost-reduction initiatives, while turnover came in at $11.62 billion, hit by foreign exchange. Pharmaceutical sales also declined 3% to $10.68 billion.

Revenues from the cholesterol blockbuster Lipitor (atorvastatin) fell 9% to $2.85 billion, hit by competition from other statins, notably the generic version of Merck & Co’s Zocor (simvastatin). Generic competition also hurt the colorectal cancer drug Camptosar (irinotecan), down 33% to $82 million and more significantly the blood pressure treatment Norvasc (amlodipine), which fell 13% to $488 million.

Sales of the smoking cessation drug Chantix/Champix (varenicline) declined 15% to $155 million, amid continuing safety concerns, while the COX-2 inhibitor Celebrex (celecoxib) fell 4% to $602 million. The erectile dysfunction drug Viagra (sildenafil) brought in $466 million, down 8%.

On the positive side, sales of Lyrica (pregabalin), for epilepsy, fibromyalgia and neuropathic pain, edged up 5% to $708 million, while the kidney cancer treatment Sutent (sunitinib) climbed 9% to $246 million. Alliance revenues, notably from Eisai’s Alzheimer’s disease treatment Aricept (donepezil) and Boehringer Ingelheim’s Spiriva (tiotropium) for chronic obstructive pulmonary disease, rose 21% to $692 million.

Chief executive Jeffrey Kindler said the company delivered a “solid operational performance in an environment that continues to be challenging”. He added that the completion of the Wyeth acquisition last week “represents a significant milestone in the transformation of Pfizer”.

Most analyst eyes are now on that deal and Barbara Ryan at Deutsche Bank issued a research note saying that Pfizer’s cost-cutting schemes “are clearly a positive”, and 6,500 jobs have reportedly been cut already this year. However she noted that “the Wyeth acquisition will enhance long-term visibility via diluting Lipitor, adding earnings synergies at the beginning of the next decade” when the drug’s patents expire.