Pfizer’s sales lag rivals as generics bite

City A.M. Reporter
DRUGS giant Pfizer yesterday reported disappointing sales, hurt by generic competition for its Lipitor cholesterol fighter and Effexor XR depression drug as well as weak revenue in emerging markets.

The last of the large US drugmakers to report third-quarter earnings, Pfizer followed the example of most rivals with higher-than-expected profits – largely from cost cuts – but disappointing sales as it faces patent expirations on some of its top-selling products.

“Generic competition is causing pain, and this is just a taste of what Pfizer will be going through in the next few years,” said Morningstar analyst Damien Conover.

The world’ largest drugmaker said global sales of Lipitor dropped 11 per cent to $2.53bn in the quarter. The arrival in recent months of Lipitor generics in Canada and Spain hurt the world’s top-selling medicine.

The bigger threat to Pfizer comes in November 2011, when Lipitor loses US marketing exclusivity. Pfizer bought Wyeth last year for $67bn, aiming to replace vanishing Lipitor revenue with the US rival’s brands.

Effexor XR, a Wyeth anti-depressant that once had annual sales of $3bn, was battered by cheaper US generic versions launched over the summer. Sales of the pill plunged to $175m in the third quarter.

“As with the rest of the industry, patent losses are hurting the bottom line, and it’s always especially tricky to gauge the real magnitude of patent erosion in overseas markets,” Conover said.

Pfizer is also counting heavily on fast-growing emerging markets to bolster results in coming years. But its sales in those markets, excluding the Wyeth brands, were essentially flat in the quarter. The company’s earnings fell to $866m, or 11 cents per share, from $2.88bn, or 43 cents, a year earlier. Excluding merger costs and other special items, Pfizer earned 54 cents per share.