US drug major Wyeth saw a turnaround in performance for the fourth quarter of 2005, posting earnings of $731.7 million, or $0.54 a share, compared to the year-ago period’s hefty deficit of $1.76 billion, or $1.32 per share, on a $4.5 billion charge for liabilities relating to the recall of the firm’s diet drugs in 1997, after they were linked to heart problems.
But although the drugmaker managed to generate a profit for the period, investors seemed slightly concerned that earnings had missed Wall Street Expectations, sending shares down $0.68 to close at $46.25.
A dip in turnover of its flagship drug, the antidepressant Effexor (venlafaxine), kept a lid on earnings, as well as 36% hike in research expenses to $876 million, boosted by the preparation of marketing applications for several new drugs.
Similarly, total sales fell just shy of expectations, inching up 2% to $4.7 billion, as turnover of Effexor slipped 1% to $841 million, in line with a general market downturn following concerns over an increased risk of suicidal thoughts and behaviour in children and adolescent taking certain types of antidepressants.
Turnover of Wyeth’s rheumatoid arthritis drug, Enbrel (etanercept), however, fared better, jumping 19% to $674 million, while sales of Prevnar, a vaccine designed to protect against invasive pneumococcal disease in infants and young children, climbed 18% to $401 million.
Commenting on the results, Robert Essner, Chairman, President and Chief Executive, said: “Wyeth demonstrated strong product performance and 2005 was a year of significant strategic accomplishment. With strong growth from biotechnology products such as Enbrel and our vaccine, Prevnar, and contributions from our core pharmaceutical products such as Effexor and Protonix, Wyeth is in the strongest competitive position in its history with five product franchises exceeding one billion dollars in annual revenues.”
A spate of new drug launches over the coming 18 months should help Wyeth lift its performance even further, and revenue growth targets in the mid-to-upper single-digit range will help the company attain its adjusted earnings per share forecast of $2.97 to $3.07.
