Fall in sales at Pfizer as drug patents loom

City A.M. Reporter
US PHARMA giant Pfizer yesterday reported lower-than-expected quarterly revenue on a decline in sales of its prescription drugs, exposing the risks the company faces if it were to it divest its better performing animal health, consumer products and nutritional products units.

Sales of Pfizer’s core business of prescription drugs fell two per cent to $14.2bn (£8.6bn). Cholesterol fighter Lipitor, the company’s biggest product, led the downturn. Its revenue tumbled 13 per cent to $2.39bn due to generic competition in overseas markets.

The world’s largest drugmaker, whose shares fell 1.8 per cent in premarket trading, said it earned $2.22bn, or 28 cents per share, in the first-quarter. That compared with $2.03bn, or 25 cents per share, in the year-earlier period, when Pfizer took charges related to its late 2009 purchase of rival US drugmaker Wyeth.

Excluding special items, including its Capsugel business that is being sold and is now considered to be a discontinued operation, Pfizer earned 60 cents per share. Analysts on average expected 59 cents per share.

Global company revenue of $16.5bn was a bit lower than the year-earlier quarter and slightly trailed Wall Street expectations of $16.63bn.

Revenue would have fallen two percentage points if not for the weaker dollar, which boosts the value of overseas sales, and for new products obtained in Pfizer’s recent purchase of specialty drugmaker King Pharmaceuticals.

Investors fear Pfizer, which has bought three of the largest US drugmakers over the past decade, will be too big to post strong profit growth once Lipitor faces cheaper US generics in November, and more than half a dozen other drugs lose US patent protection in the next few years.

Pfizer said it aims in the second half of the year to complete an assessment of what businesses it may sell.

Sales of animal-health products jumped 16 per cent to $982m in the quarter, while sales of consumer healthcare products rose 12 per cent to $745m. Nutritional product sales rose three per cent to $470m.