Earnings Preview: Pfizer 3Q to Focus on New Drugs
Pfizer Inc. will tout a surge of drug approvals when it reports third-quarter results before the market opens Tuesday.
WHAT TO WATCH FOR: The world's second-largest drugmaker, hit hard by generic competition the last two years, saw its revenue drop 10 percent last year from its peak of $65.3 billion in 2011. That December, it got generic competition for cholesterol pill Lipitor, which once brought in nearly $13 billion annually.
Company executives will discuss recent approvals, efforts to boost sales of key medicines and recent research data, all things that could help it rebound.
Analysts will want to know what Pfizer will do to increase sales of two drugs viewed as likely blockbusters whose sales have been disappointing so far: rheumatoid arthritis pill Xeljanz and anticlotting drug Eliquis.
New York-based Pfizer sells Eliquis with partner Bristol-Myers Squibb Co., which reported just $41 million in third-quarter sales for the drug. Part of a new generation of medicines for preventing heart attacks and strokes, Eliquis trails rivals that went on sale much earlier, Xarelto and Pradaxa. Pfizer is sure to note recent positive research data on the safety and effectiveness of Eliquis.
Xeljanz, a pill meant to compete with injected biologic drugs, won approval in July from five new countries, on top of earlier approvals in the U.S. and Japan. But European Union regulators have twice rejected it. CEO Ian Read likely will be asked what the company will do next.
He does have good news:
—Pfizer just got U.S. approval for Duavee, a hormone pill for menopause-related hot flashes and osteoporosis.
—Pfizer's HIV drug partnership with GlaxoSmithKline PLC won U.S. approval for Tivicay, a pill for use with other AIDS drugs.
—European regulators approved Pfizer's $4 billion-a-year vaccine against meningitis and pneumonia for adults 18 to 49. Pfizer is running a big study to seek U.S. approval for that age group. Prevnar 13, called Prevenar 13 in Europe, is approved on both sides of the pond for older adults, children and infants. Sales could still grow significantly.
Meanwhile, Pfizer will discuss its research progress, including the start of two late-stage studies of breast cancer treatment palbociclib, designated a breakthrough therapy by the Food and Drug Administration. And Pfizer just announced it will run new patient tests of Remoxy, a narcotic painkiller designed to be hard to abuse, but twice rejected by the FDA.
Read likely will discuss Pfizer's plan to reorganize into three business units in January. Two will market products with patent protection beyond 2015 in different disease categories. The third will sell products that have or soon will get generic competition but still sell well.
WHY IT MATTERS: Besides being among the drugmakers worst hit by generic competition, Pfizer is dealing with industrywide problems: rising research costs, the weak global economy and demands for lower prices.
Read's been under pressure to break up the giant company into smaller pieces that could grow faster and boost investor returns, but says that can't happen soon. Pfizer recently divested its animal health and infant nutrition businesses, but analysts aren't satisfied.
Rising sales and share prices might change that.
WHAT'S EXPECTED: Analysts surveyed by FactSet expect, on average, adjusted earnings of 56 cents per share and sales of $12.69 billion.
LAST YEAR'S QUARTER: Pfizer posted net income of $3.21 billion, or 43 cents per share, on revenue of $13.98 billion.
Follow Linda A. Johnson at http://twitter.com/LindaJ_onPharma