Shares in drugmaker, Wyeth, took a knocking yesterday after the firm reported a weaker-than-expected set of fourth quarter results [[21/10/04g]], after booking a $4.5 billion dollar charge relating to the Redux (dexfenfluramine) and Pondimin (fenfluramine) diet drug litigation, and warned of further disappointment for the coming year. The US company’s share price tumbled by as much as 7% during trading in New York yesterday as investors took stock of the news.
Pondimin and the follow-up drug, Redux, were withdrawn from the market in 1997, triggering a lengthy legal process for the US giant and forcing it to place almost $17 billion dollars into its legal reserves to settle claims that the obesity drugs were linked to heart valve defects and a condition known as primary pulmonary hypertension – with this latest addition, the fund now stands at over $21 billion [[19/01/05b]].
Net loss for the three-month period was almost $1.8 billion – versus income of $335 million in the corresponding quarter of 2003 [[23/01/04b]]. However, without the charge and a $640 million special charge relating to manufacturing restructuring, Wyeth says that net income came in at $861 million, which is marginally higher than the 2003 figure, on the back of a 7% hike in worldwide revenues to $4.6 billion, including an 8% rise in pharmaceutical sales during the quarter to $3.7 billion.
On an annual basis, sales rose 10% to $17.4 billion, boosted by a not insignificant contribution from the company’s top-selling antidepressant, Effexor (venlafaxine), which jumped 23% during the twelve-month period to $3.3 billion. However, the firm cautioned that growth in the antidepressant market as a whole is moderating as a result of recent label changes reflecting an increased risk of suicidal thoughts and behaviour amongst children and adolescent taking certain types of antidepressants [[15/09/04a]]. Solid growth also came from Wyeth’s anti-ulcerant, Protonix (pantoprazole), which climbed 7% to $1.6 billion. The arthritis treatment, Enbrel (etanercept), which is co-marketed with Amgen, brought in $1.9 billion in net revenue in the North American region – up 46% [[28/01/05d]]. Wyeth has exclusive rights to the product outside of North America, where net revenue for the year reached $680 million, more than double the previous year. Sales of the firm’s Prevnar pneumococcal vaccine climbed 11% to $1.1 billion, while the Zosyn (piperacillin/tazobactam) antibiotic increased 19% to $760 million for the year, and the transplant drug, Rapamune (sirolumus), surged 53% to $259 million. On the down side, Wyeth is still continuing to feel the effects of the now notorious Women’s Health Initiative trial, which showed an increased risk of breast cancer and a lack of overall benefit with combined HRT [[10/07/02b]], with net revenue from the Premarin family of products dipping 31% during the year to $880 million.
For 2005, Wyeth is forecasting earnings per share of between $2.70 and $2.80 – slightly down on the 2004 figure of $2.65 – while revenue is expected to grow by 5% to 9%.