US drug giant Pfizer saw its net income plummet for the fourth quarter after the year-earlier period was bolstered by the sale of its consumer healthcare division, but sales came in above analysts’ expectations.
The group posted a 70% drop in earnings to $2.9 billion following an after-tax gain of $7.9-billion from the divested unit in the fourth quarter of 2006. Adjusted for special items, the company said organic growth of net income was actually 17% to £3.6 billion.
Sales grew 4% during the period to $13.1 billion, beating analysts’ expectations of around $12 billion. Turnover of pharmaceutical products inched up 2%, on solid performances by: Lyrica (pregabalin), for epilepsy and neuropathic pain, rocketing 60% to $564 million; the COX-2 inhibitor Celebrex (celecoxib), up 18% at $637 million; the smoking cessation drug Chantix (varenicline), soaring 312% to $280 million; and the erectile dysfunction drug Viagra (sildenafil), which climbed 10% to $498 million.
After a somewhat challenging year for the firm, which saw the group pull its inhalable insulin Exubera off the market after a disappointing take-up, revenues for 2007 inched up just 1% to $48.6 billion, as strong turnover of some of its products and favourable currency effects managed to overcome weaker sales of others hit by generic and branded competition.
Pfizer’s cholesterol drug Lipitor (atorvastatin) turned in a 2% drop in sales to $12.7 billion over 2006, as it continues to grapple for market share with other therapies such as Merck & Co rival statin Zocor, while the loss of patent protection for the blood pressure drug Norvasc (amlodipine) and the antidepressant Zoloft (sertraline) meant revenues took a hit of $3.4 billion in the year.
On the plus side, sales of Celebrex jumped 12% to $2.3 billion, Lyrica leapt 58% to $1.8 billion, cancer drug Sutent (sunitinib) jumped 166% to $581 million, and Chantix generated $883 million compared with $101 million in 2006, its launch year.
Net earnings for the tumbled 57% to $8.3 billion, and earnings per share were down 55% at $1.20, primarily because 2006 profits were fattened by the sales of its consumer healthcare division.
Positive outlook
Commenting on the results, the group’s chairman and chief executive Jeff Kindler said: “In 2007, we delivered solid performance, and made structural and operational changes to enhance the future performance of our company…With strong product performance, cost reductions, improved productivity and the benefits of foreign exchange, we achieved both revenue and adjusted diluted EPS growth despite losing U.S. market exclusivity for Norvasc and Zoloft”.
And the company is certainly upbeat in its outlook for the coming year. According to Kindler, the group’s new products – Lyrica, Chantix, and Sutent – are performing well, and he said the firm is “shifting investments into high-priority therapeutic areas, revamping our R&D operations and acquiring new compounds and technologies that we believe are especially promising”, which, he claims, will make Pfizer “a stronger company than it was a year ago”.
The group says it is on track to reap savings of at least $1.5-$2.0 billion on a constant currency basis next year, following moves to reduce expenses and increase productivity during 2007, including a reduction in headcount of around 11,000. Furthermore, it has ramped up its revenue expectations to $47.0-$49.0 billion, and forecast adjusted EPS of $2.35 to $2.45.
