Profits have soared at Pfizer, as strong international sales and cost-cutting measures saw net income triple for the third quarter.
The latter leapt to $2.28 billion from $761 million a year earlier, when Pfizer took a $2.1 billion after-tax charge as a result of its decision to stop marketing the inhaled insulin diabetes treatment Exubera. Revenues were flat at about $11.97 billion, helped by favourable currency exchange which offset a 15% drop in US sales. International turnover, however, grew 13%.
Total pharmaceutical sales slipped 1% to $10.98 billion, reflecting a 1% fall in sales of the blockbuster cholesterol drug Lipitor (atorvastatin) to $3.14 billion. They were down 13% in the USA as it continues to fight for market share with other therapies, notably the generic version of Merck & Co’s rival statin Zocor (simvastatin).
Generic competition battered sales of the antihistamine Zyrtec (cetirizine), which Pfizer stopped selling in the USA in January, the colorectal cancer drug Camptosar (irinotecan) and the blood pressure treatment Norvasc (amlodipine). Collectively, the effect decreased revenues by $627 million.
There was also disappointment about the performance of the smoking cessation drug Chantix/Champix (varenicline), sales of which fell 24% to $182 million. US revenues of the product dropped 49% in the quarter to $96 million, amid safety concerns. Still there was much to pleased about, notably sales of Lyrica (pregabalin), for epilepsy, fibromyalgia and neuropathic pain, which jumped 45% to $675 million.
The kidney cancer treatment Sutent (sunitinib) climbed 49% to $226 million, while the erectile dysfunction drug Viagra (sildenafil) keeps rising, with sales up 13% to $509 million. The COX-2 inhibitor Celebrex (celecoxib) climbed 8% to $625 million.
Pfizer chief executive Jeff Kindler said the company “remains on-track to meet our 2008 objectives, despite the turbulent global economy," and chief financial officer Frank D’Amelio, noted that the firm is raising the lower end of its guidance range for full-year revenues to $48-$49 billion from $47-$49 billion. In addition, he stated that costs are now expected to be lower by at least $2.0 billion at the end of 2008 compared with 2006, saying Pfizer will “continue to look for new opportunities to further reduce and more effectively manage our costs”.
The results were slightly better than expected but analysts are still worried about what is being perceived as the lack of acquisitions on Pfizer’s part that will help it soften of looming generic competition to key drugs, especially Lipitor. In a research note, Sanford Bernstein analyst Tim Anderson wrote that "the most troubling aspect of the story is the massive patent 'cliff' Pfizer faces that will put its earnings growth from 2012-2015 into sharply negative territory".
He added that “it will likely be difficult for Pfizer to effectively replace these lost revenue streams, suggesting that a merger or acquisition may lay in the company's future".
Fablyn review delayed
Meantime US regulators have extended a review of Pfizer’s investigational osteoporosis drug Fablyn (lasofoxifene) by three months.
The US Food and Drug Administration extended the review through January next year in order to look at five-year data from the pivotal PEARL trial of the drug, which was developed using technology from Ligand Pharmaceuticals. One of the agency’s advisory panels gave its backing to Fablyn, a selective estrogen receptor modulator, although the drug had been rejected twice in the past.
