Pfizer’s third-quarter profits have plummeted 77% after the firm announced that it is taking a $2.8 billion charge relating to its decision to stop selling Exubera which has failed to make any impact in the diabetes market.

Net income came in at $761 million, or $0.11 per share, but the figures would have looked a lot healthier were it not for the failure of Exubera (inhaled insulin). Specifically the charge is made up of $1.1 billion of intangible assets, $661 million of inventory, $454 million of fixed assets and $584 million of other exit costs.

Pfizer’s experience with Exubera has been almost universally miserable since the day it bought the worldwide co-marketing rights to the drug from partner Sanofi-Aventis for $1.3 billion in January 2006. It was launched in the middle of last year but has failed to make any sort of mark despite Pfizer heavily marketing the product this year.

Chief executive Jeff Kindler said that “despite our best efforts, Exubera has failed to gain the acceptance of patients and physicians [so] we have therefore concluded that further investment in this product is unwarranted.” He added that Pfizer will work with doctors to transition Exubera patients to other treatment options in the next three months and remains “committed to investing significant resources in the development of new and innovative medicines to manage diabetes”, including other delivery systems for insulin and other drugs.

Nektar fumes over marketing of Exubera
The news that Exubera is being pulled came as something of a shock to Nektar Therapeutics which co-developed the drug with the New York-based behemoth. Chief executive Howard Robin was non-plussed, saying that “we first learned this morning of Pfizer's decision to walk away from Exubera from their press release", adding that his company “has been very disappointed in Pfizer's performance in marketing Exubera”.

However, Pfizer has plenty of other problems aside from Exubera and revenues fell 2.4% to $11.99 billion, notably as a result of generic competition in the USA to some major products. Sales of the blood pressure drug Norvasc (amlodipine) slumped 47% to $640 million, while the antidepressant Zoloft (sertraline) collapsed 73% to $124 million. Its biggest earner, the cholesterol-lowerer Lipitor (atorvastatin) also declined 5% to $3.17 billion, as doctors switched patients to generic versions of Merck & Co’s similar drug Zocor (simvastatin).

It was not all bad news, however. Sales of the COX-2 inhibitor Celebrex (celecoxib) for arthritis were up 8% at $577 million, while revenues from the epilepsy and neuropathic pain medication Lyrica (pregabalin), which has also been approved to treat fibromyalgia, leapt 37% to $465 million.

As for its even newer products, Pfizer's novel pill for smoking cessation Champix/Chantix (varenicline) brought in $241 million, while cancer drug Sutent (sunitinib) had sales of $151 million. Caduet, which combines Lipitor with Norvasc (amlodipine), leapt 52% to $149 million and sales of Viagra (sildenafil) are still standing tall, rising 6% to $450 million.

Mr Kindler said that the firm is “achieving our operational goals in the face of major revenue losses” and “most of our new products, along with the favourable impact of foreign exchange, are contributing significantly toward offsetting these losses”. He added that the firm’s cost-cutting programme is making substantial progress but “we need to deliver better results, continue to make tough decisions about allocating our capital wisely, and bring more new products to the market as quickly as possible”.

Analysts were not especially surprised by the results, although some were stunned at the speed with which Pfizer has dropped Exubera, and the firm’s share price barely flickered. Mr Kindler said on a conference call later that “there isn't a single solution [which] we are going to one day open the curtain and unveil and I'm very sorry if some people find that disappointing”.

He concluded by saying that Pfizer is putting in the foundations “brick by brick” for a brighter future,'' noting that “we are moving with a sense of urgency”.