Pfizer Q2: All But 3 Drugs in Decline; R&D Spend Lowest Since 2007

Last Updated Jul 22, 2009 11:27 AM EDT

Sales of every single drug sold by Pfizer declined in Q2 2009 except for three: depression pill Lyrica, cancer treatment Sutent and the tiny Revatio franchise. Pfizer blamed foreign currency headwinds as it reported sales of $10.9 billion, down 9 percent; and net income of $2.3 billion, a decline of 19 percent.

Without that, Pfizer claimed, the company would have had revenue growth:

On a constant currency basis, all of our Pharmaceutical units and Animal Health generated revenue growth during the quarter...
Pfizer did not quantify what that growth could have been but it must have been anemic. Abbott Labs posted sales growth despite weak foreign currency revenues and J&J grew its U.S. sales despite weak foreign revenues that dragged down its overall sales growth.

At Pfizer, both foreign and domestic segments declined in sales, which means that what "growth" there was came from abroad but after being translated into dollars resulted in a decline -- the foreign growth, in other words, was not large enough to offset the 5 percent decline in U.S. dollar sales.

More worrying still: Pfizer spent just $1.6 billion on R&D -- less than at any time in two years. As Pfizer has been axing domestic research in favor of foreign labs, this is not surprising -- the forex effect will make R&D spend look lower when it may be higher. But still, what can a company that expects $48 billion a year in revenues expect to get from its pipeline at just $1.6 billion a quarter?

Lastly, more headaches for Pfizer's push into generics: Kindler said that all the units saw "growth" except for Established Products:

... which manages a portfolio of products that have an expected decline in revenues at this stage of their lifecycle.
Pfizer is expecting big things from its generics unit, but as BNET has noted before, it's starting to look more and more like an uphill struggle.