Pfizer Waiting for Cues on Tax Reform to Pursue Deals -- Update
August 01 2017 - 1:49PM
Dow Jones News
By Jonathan D. Rockoff
Pfizer Inc. says it wants to wait to see what happens with tax
reform in Washington before deciding on any big mergers or
acquisitions.
With lawmakers poised to take up tax reform soon, "it would be
imprudent not to wait" to see what happens and how it would affect
the values of any companies Pfizer would be interested in
acquiring, Chief Executive Ian Read said in an interview as the
company reported second-quarter results.
Analysts expect the New York drug company, which in recent years
unsuccessfully pursued AstraZeneca PLC and dropped a deal to buy
Allergan PLC, to look again at a big acquisition for growth.
At the end of the first quarter, Pfizer had about $23 billion in
cash available, most of that overseas. Chief Financial Officer
Frank D'Amelio said tax reform could give Pfizer potentially far
more resources -- $150 billion or more -- to do a deal.
Pfizer's revenues fell in the second quarter as sales slowed for
some top-selling products, but the company raised the low end of
its full-year adjusted earnings guidance, citing reduced expenses
and higher-than-expected royalty income from certain products. The
company now expects earnings of $2.54 to $2.60 per share, compared
with prior guidance of $2.50 to $2.60 per share.
Pfizer's second-quarter performance underscores the company's
shifting reliance on newer drugs like breast-cancer treatment
Ibrance, as older products like the antidepressant Pristiq,
male-impotence pill Viagra and Lyrica pain remedy face or will face
generic competition.
Revenues for the quarter fell 2% to $12.9 billion, partly
because sales of some of the company's older drugs declined. Sales
of Pfizer's top-selling product, the Prevnar pneumonia vaccine,
also dropped, by 8% to $1.15 billion.
Sales of newer Pfizer products, such as Ibrance as well as
blood-thinner Eliquis and the Xeljanz arthritis treatment, rose by
50% or more. The company attributed the overall revenue miss to a
strong dollar and the sale of an infusion-pump business.
Mr. Read pointed to the company's pipeline of drugs in
development as a promising source of future growth. He said the
company could see as many as 15 approvals by 2020 with sales
potential of $1 billion a year or more.
Analysts polled by Thomson Reuters had forecast earnings of
$2.55 per share for the year.
In all, Pfizer reported earnings of $3.07 billion, or 51 cents
per share, up from $2.05 billion, or 33 cents per share, a year
earlier. Excluding certain items, earnings rose by 3 cents to 67
cents.
--Imani Moise contributed to this article
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
August 01, 2017 13:34 ET (17:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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