US healthcare major Wyeth saw its earnings fall 39% to $870 million for the third quarter, as the effect of $266 million worth of charges was magnified by the absence of a substantial one-time tax gain booked for the year-ago period.
Even so, the group reported better-than-expected earnings per share, excluding special items, of $0.81 a share, comfortably beating its mid-to-upper $0.70 range forecast just two weeks ago [[07/10/05g]].
Earnings were driven by a moderate increase in sales for the period, up 6% at $4.7 billion, led by a 7% increase in pharmaceutical revenues to $3.9 billion. Sales growth came in under the 12% posted for the second quarter [[21/07/05a]], as turnover of its key product, the world’s number one anti-depressant Effexor (venlafaxine), dipped 4% to $861 million. Crumbling demand for the drug follows recent recommendations that therapies for depression include warnings of increased suicidal thoughts in adolescents on their labels [[15/09/04a]].
Revenues were lifted by strong performances by the group’s arthritis agent, Enbrel (etanercept), and Prevnar, a vaccine protecting infants and young children against pneumococcal infections. In territories where Wyeth holds exclusive rights to Enbrel (outside North America), the agent’s turnover soared 59% to $276 million, as problems with supply in earlier quarters were largely solved by the construction of a new manufacturing facility. Sales of Prevnar leapt 23% to $393 million, while the proton pump inhibitor Protonix (pantoprazole) also turned in a solid result, with revenues up 7% at $405 million.
Sales were also likely given a helping hand by the group’s recently-modified salesforce, which included chopping 30% of its full-time reps and replacing them with part-timers [[21/06/05a]]. The company said that restructuring of its US salesforce is just the beginning, and that changes along the same lines are being considered globally, according to the Financial Times.
Meanwhile, Wyeth reported a small victory in the continuing war over its withdrawn diet drug Pondimin (fenfluramine). Use of the drug was linked to heart valve damage in 1997, spurring an eruption of lawsuits for which the group has reportedly shelled out $21 billion in related charges and liabilities. A jury in the Philadelphia Court of Common Pleas found ruled in the company’s favour in one case, but awarded damages of $88,000 in another suit, which the firm intends to appeal.
In other recent news, reports suggest that Wyeth – alongside partner Solvay - has partnered with Solvay Pharmaceuticals for the atypical antipsychotic bifeprunox, which should see the filing of a New Drug Application with the US Food and Drug Administration next year. This could help the group claw back lost sales of Effexor.
Peak year sales on the markets where the partners co-develop and co-commercialise bifeprunox – the United States and Canada – are in excess of $1 billion
Investors seemed a little uncertain over the news on October 21, as shares in the group on the New York Stock Exchange slipped 2.7% to close at $45.00.