January 27, 2012 5:55 PM
- Text
Earnings Preview: Pfizer to report on 4th quarter
(AP) TRENTON, N.J. — Pfizer Inc., which reports fourth-quarter results before the stock market opens Tuesday, will tout two recent drug approvals, discuss a couple of other drugs awaiting approval and outline its revenue prospects now that it has generic competition to cholesterol blockbuster Lipitor.
WHAT TO WATCH FOR: Pfizer, the world's biggest drugmaker by revenue, appears to be having some success with an aggressive, unprecedented strategy to hang onto part of Lipitor's revenue in the first months since U.S. generic competition began on Nov. 30. Analysts will be eager for details on how it's going.
CEO Ian Read, now in the post for a year, will give an update on progress in cutting jobs and research and other costs since Pfizer's 2009 acquisition of fellow drugmaker Wyeth. Read, who has been trying to restructure the drugmaker's research and finances, will also report on his evaluation of strategic options for Pfizer's nutrition and animal health businesses. Last July, Pfizer said it might sell them or spin them off. It sold its medicine capsule-making business in August.
The New York-based company will also update its financial forecast for 2012. As of October, Pfizer was forecasting earnings per share of $2.25 to $2.35, excluding one-time items, and revenue of $62.2 billion to $64.7 billion. That's down considerably from its 2010 total of $67.81 billion — mainly due to the generic competition for Lipitor in the U.S. and a few other countries.
Executives likely will tout progress in building a new portfolio of oral cancer drugs. In August, the Food and Drug Administration approved Xalkori for lung cancer, along with another company's companion diagnostic test to identify the small subset of lung cancer patients for whom the drug will work.
On Friday, the FDA approved Inlyta, a twice-a-day pill for patients with kidney cancer that hasn't responded to previous drug treatments, and said it will review bosutinib, a pill for adults with chronic myeloid leukemia who have first tried other treatments.
In late December, the agency also approved use of Pfizer's blockbuster pneumococcal vaccine Prevnar 13 in adults aged 50 and over. The European Union had already expanded approval of the children's vaccine to those older adults. The multidose shot for preventing ear, bloodstream and other infections had 2010 sales of about $3.7 billion, the most ever for a vaccine.
Pfizer executives are expected to discuss progress in advancing experimental drugs toward approval, such as bosutinib and tofacitinib, a drug to delay worsening of rheumatoid arthritis that also is awaiting FDA approval.
The next key one is experimental clot-preventing drug Eliquis, a likely blockbuster shown to significantly reduce strokes, internal bleeding and deaths. Pfizer is developing it with Bristol-Myers Squibb Co., and the FDA is to rule by March 28.
Eliquis was approved in May in the EU for preventing blood clots in patients who have had hip or knee replacement surgery, but the companies are aiming for the much bigger market of patients with atrial fibrillation, an irregular heartbeat that raises risk of life-threatening blood clots. Two rival drugs have recently been approved.
WHY IT MATTERS: Lipitor, the world's top-selling drug ever, brought Pfizer $10.7 billion in 2010, roughly a fifth of company revenue. Investors will want to see how much revenue Pfizer has retained by continuing consumer ads and offering patients and insurers big discounts to stay on brand-name Lipitor, along with jointly marketing an authorized generic version with Watson Pharmaceuticals Inc.
They'll also want to see approvals of new drugs to make up for the inevitable decline in Lipitor revenue that began in December and will accelerate come June, when multiple generic versions of the drug, called atorvastatin, will flood the market.
Read has reduced Pfizer's huge research budget by about 12 percent. He recently told analysts that it's now at an appropriate, sustainable level that will produce growth. He said Pfizer now is focused on small- to midsized deals and research partnerships, and not looking for another megadeal.
WHAT'S EXPECTED: Analysts surveyed by FactSet expect, on average, earnings per share of 47 cents and revenue of $16.61 billion.
LAST YEAR'S QUARTER: Pfizer posted earnings per share of 36 cents, or 47 cents excluding a $2 billion tax settlement benefit and restructuring and other expenses from its $68 billion purchase of Wyeth. Its revenue totaled $17.56 billion.
___
Linda A. Johnson can be followed at http://twitter.com/LindaJ_onPharma
WHAT TO WATCH FOR: Pfizer, the world's biggest drugmaker by revenue, appears to be having some success with an aggressive, unprecedented strategy to hang onto part of Lipitor's revenue in the first months since U.S. generic competition began on Nov. 30. Analysts will be eager for details on how it's going.
CEO Ian Read, now in the post for a year, will give an update on progress in cutting jobs and research and other costs since Pfizer's 2009 acquisition of fellow drugmaker Wyeth. Read, who has been trying to restructure the drugmaker's research and finances, will also report on his evaluation of strategic options for Pfizer's nutrition and animal health businesses. Last July, Pfizer said it might sell them or spin them off. It sold its medicine capsule-making business in August.
The New York-based company will also update its financial forecast for 2012. As of October, Pfizer was forecasting earnings per share of $2.25 to $2.35, excluding one-time items, and revenue of $62.2 billion to $64.7 billion. That's down considerably from its 2010 total of $67.81 billion — mainly due to the generic competition for Lipitor in the U.S. and a few other countries.
Executives likely will tout progress in building a new portfolio of oral cancer drugs. In August, the Food and Drug Administration approved Xalkori for lung cancer, along with another company's companion diagnostic test to identify the small subset of lung cancer patients for whom the drug will work.
On Friday, the FDA approved Inlyta, a twice-a-day pill for patients with kidney cancer that hasn't responded to previous drug treatments, and said it will review bosutinib, a pill for adults with chronic myeloid leukemia who have first tried other treatments.
In late December, the agency also approved use of Pfizer's blockbuster pneumococcal vaccine Prevnar 13 in adults aged 50 and over. The European Union had already expanded approval of the children's vaccine to those older adults. The multidose shot for preventing ear, bloodstream and other infections had 2010 sales of about $3.7 billion, the most ever for a vaccine.
Pfizer executives are expected to discuss progress in advancing experimental drugs toward approval, such as bosutinib and tofacitinib, a drug to delay worsening of rheumatoid arthritis that also is awaiting FDA approval.
The next key one is experimental clot-preventing drug Eliquis, a likely blockbuster shown to significantly reduce strokes, internal bleeding and deaths. Pfizer is developing it with Bristol-Myers Squibb Co., and the FDA is to rule by March 28.
Eliquis was approved in May in the EU for preventing blood clots in patients who have had hip or knee replacement surgery, but the companies are aiming for the much bigger market of patients with atrial fibrillation, an irregular heartbeat that raises risk of life-threatening blood clots. Two rival drugs have recently been approved.
WHY IT MATTERS: Lipitor, the world's top-selling drug ever, brought Pfizer $10.7 billion in 2010, roughly a fifth of company revenue. Investors will want to see how much revenue Pfizer has retained by continuing consumer ads and offering patients and insurers big discounts to stay on brand-name Lipitor, along with jointly marketing an authorized generic version with Watson Pharmaceuticals Inc.
They'll also want to see approvals of new drugs to make up for the inevitable decline in Lipitor revenue that began in December and will accelerate come June, when multiple generic versions of the drug, called atorvastatin, will flood the market.
Read has reduced Pfizer's huge research budget by about 12 percent. He recently told analysts that it's now at an appropriate, sustainable level that will produce growth. He said Pfizer now is focused on small- to midsized deals and research partnerships, and not looking for another megadeal.
WHAT'S EXPECTED: Analysts surveyed by FactSet expect, on average, earnings per share of 47 cents and revenue of $16.61 billion.
LAST YEAR'S QUARTER: Pfizer posted earnings per share of 36 cents, or 47 cents excluding a $2 billion tax settlement benefit and restructuring and other expenses from its $68 billion purchase of Wyeth. Its revenue totaled $17.56 billion.
___
Linda A. Johnson can be followed at http://twitter.com/LindaJ_onPharma
Scientific American
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