Pfizer Aims to Cut Generics Impact with New Drugs
Pfizer Inc. CEO Ian Read said Thursday that continuing expirations of drug patents through 2015 will restrain revenue growth, but the world's largest drugmaker is trying to offset that with launches of several medicines and research to create new ones.
Read told shareholders at the company's annual meeting that Pfizer launched clot- and stroke-preventing pill Eliquis this year and has recently launched rheumatoid arthritis pill Xeljanz and five cancer medicines.
Read noted top products including Enbrel for psoriasis and rheumatoid arthritis and pain relievers Celebrex and Lyrica also helped, posting strong volume growth in 2012. Meanwhile, sales of consumer health products such as Advil pain reliever and Centrum vitamins climbed 8 percent last year.
Executives of the New York-based drugmaker said it's now focusing more of its research on less-common disorders such as sickle cell anemia and cystic fibrosis, and on vaccines against deadly diseases, including an infection often acquired in hospitals, C. difficile. Other targets include a rare form of dementia and Huntington's disease, a genetic neurodegenerative disorder that causes cognitive decline, psychiatric problems and decreased muscle coordination.
"We would expect to see many of these products advancing into clinical trials in the second half of this decade," Read said at the annual meeting, at a hotel in Short Hills in northern New Jersey.
Pfizer's revenue already is suffering from the November 2011 expiration of the patent on cholesterol-lowering drug Lipitor. It had reigned as the world's top-selling drug for nearly a decade and still brought Pfizer more than $10 billion a year when generic competition arrived.
That loss is compounded by slowing growth in developed countries. Read noted that health programs in Europe and the U.S. continue trying to hold down what they pay for medicines.
Like other pharmaceutical companies, Pfizer is trying to maintain its bottom line through continued job eliminations and cuts to other expenses. Pfizer reduced expenses by nearly $4 billion in 2012 compared to 2011, according to Read.
Pfizer also continues to try to boost sales in emerging markets and saw sales jump about 30 percent last year in China's enormous market, where Pfizer has launched a joint venture to sell patented drugs both in China and other countries.
Read noted that last year the company launched a joint venture in China called Hisun-Pfizer Pharmaceuticals to sell off-patent medicines there and in other countries. In November, Pfizer bought NextWave Pharmaceuticals Inc., which makes the recently approved Quillivant XR, an extended-released liquid medicine for attention deficit disorder.
Pfizer also raised nearly $12 billion last year by selling its nutritional business to Nestle SA and another $6 billion through a partial initial public offering of about 20 percent of its animal health business, now called Zoetis. Asked by a shareholder about plans for the rest of Zoetis, Read said management is still reviewing that, trying to determine which option would best benefit stockholders.
At the meeting, shareholders overwhelmingly re-elected 13 board members to one-year terms and approved a company proposal giving shareholders an advisory vote on executive compensation. Two shareholder proposals were rejected, to require top executives to retain more of the stock they receive from the company and to allow a majority of shareholders to take action by written consent between annual meetings.
Pfizer said it will pay a second-quarter dividend of 24 cents to shareholders owning stock as of May 10. The board raised the dividend, which had been 22 cents, in December.
"Through dividends and share repurchases, we returned approximately $15 billion to our shareholders in 2012," Read said.
In afternoon trading, Pfizer shares fell 24 cents at $30.36. The stock has rallied 21 percent in the year to date, outperforming the benchmark S&P 500 index which has gained 11 percent over the same time.
Follow Linda A. Johnson at http://twitter.com/LindaJ_onPharma.