Wyeth’s earnings for the second quarter have fallen, having been hit by charges and declining sales of its antiulcerant blockbuster Protonix but the figures were still slightly better than analysts had forecast.
Net income declined 6.7% to $1.20 billion, or $0.83 per share, which included $155.2 million in charges related to “productivity initiatives”. Specifically, these involve severance and other employee-related costs associated with a reduction in Wyeth’s workforce of 6%, many of whom were marketing people who supported Protonix (pantoprazole), the antiulcerant which has gone off-patent.
Group sales were up 5% to $5.94 billion and pharmaceutical revenues contributed $4.97 billion (also +5%) to the total. The most impressive performances came from the pneumococcal disease vaccine Prevnar, which grew 9% to $691 million, and the arthritis and psoriasis therapy Enbrel (etanercept), which jumped 36% to $692 million (excluding the USA and Canada, where it is sold by Amgen). Wyeth’s best-seller continues to be the antidepressant Effexor (venlafaxine), which rose 5% to $1.02 billion, maintaining its place as “the number one global antidepressant in sales”.
The firm’s Premarin (conjugated oestrogens) range of hormone replacement therapies inched up 1% to $271 million, while the antibiotic Zosyn (piperacillin/tazobactam) climbed 14% to $319 million.
As for Protonix, sales sank 59% to $228 million as a result of ‘at risk’ generic launches in the USA by Teva and Sun Pharmaceutical Industries. The New Jersey-based firm launched its own copy of Protonix in the first quarter and while it “has had some success in the marketplace” the sales “have not, and cannot, offset the substantial harm caused by the launch of infringing generics”. Wyeth said that it will “continue to vigorously pursue its litigation” against Teva, Sun and others infringing generics”.
The firm raised its 2008 full-year earnings guidance to $3.47-$3.55 “due to the positive results achieved to date”, said chief executive Bernard Poussot, He said the figures had been boosted by volume growth in
international markets, which was enhanced by foreign exchange rates, and the performance of “our growing nutritional franchise”, where sales rose 20% to $430 million.
Mr Poussot went on to say that “we also have the advantage of diverse businesses - pharmaceuticals, consumer healthcare and animal health”, adding that the firm is particularly excited about the progress being made with bapineuzumab, an Elan-partnered compound for Alzheimer's disease.
Barbara Ryan, an analyst at Deutsche Bank, was not overly impressed and described Wyeth’s new drug pipeline as “unattractive, and certainly insufficient to offset the loss of exclusivity through 2010” for Effexor and Protonix, which represent 35%-40% of the firm’s profits.
