By Jonathan D. Rockoff
Pfizer Inc. on Tuesday lifted its full-year outlook as its
newly-launched treatments for cancer, heart disease and other
conditions drove growth in the second quarter.
Overall, Pfizer's quarterly revenue fell 7%, to $11.9 billion,
but it would have risen 1% excluding currency impacts thanks
largely to new drugs.
The results were the latest positive sign from Pfizer, which has
confronted sizable sales losses in the last several years as
patents expired on a string of blockbuster drugs. Pfizer has also
been struggling with generic competition for former blockbusters
such as cholesterol fighter Lipitor and, more recently, pain pill
Celebrex.
Yet many of the drops in sales are fading. In the second
quarter, new drugs such as blood-thinner Eliquis,
rheumatoid-arthritis pill Xeljanz and breast-cancer therapy Ibrance
helped propel sales. Another contributor was the latest version of
its Prevnar pneumonia vaccine, a franchise whose sales rose 37%, to
$1.5 billion.
Pfizer is counting on more new products, now in development, to
lift future sales. For the year, the company's research and
development costs are running 7% higher than during the same period
last year, largely because 40% of Pfizer drug candidates are in the
most advanced--and expensive--stages of development, according to
company officials.
For the quarter, Pfizer posted a profit of $2.63 billion, or 42
cents a share, down from $2.91 billion, or 45 cents a share, in the
prior-year period, hurt by the strong dollar and generic
competition. Excluding certain items, per-share earnings were 56
cents.
Pfizer's most advanced drug candidates are still a few years
away from hitting the market. Also, R&D has always been risky
and may not deliver the products Pfizer seeks. The quarter offered
another reminder, as Pfizer said it was halting its efforts
exploring the sale of Lipitor over the counter after a study found
patients weren't able to appropriately manage use of the pills
without a doctor.
Pfizer Chief Executive Ian Read said the company will remain on
the hunt for more acquisitions, such as its $16 billion purchase of
generic-injectable maker Hospira Inc., which is expected to close
later this year, to complement the company's own growth efforts.
Because adding Hospira will strengthen Pfizer's business selling
older drugs, Mr. Read signaled an interest in deals that would add
patent-protected medicines.
"I prefer a deal to strengthen our innovative business, as I
think we've done a considerable bit to strengthen our established
business," Mr. Read said.
Pfizer said it continues exploring a possible split of the
company into two firms: one focused on patent-protected medicines
and another for established medicines. Pfizer has spent $332
million over the last 1 1/2 years setting up separate accounting
systems, registering different legal entities and generally
preparing for a potential split, the company said.
By the time Pfizer makes a decision whether to split by the end
of 2016, the total cost will probably surpass $1 billion, Chief
Financial Officer Frank D'Amelio said in an interview. "It's the
cost of giving ourselves the option," he said.
By the time Pfizer makes a decision whether to split by the end
of 2016, the total cost will probably surpass $1 billion, Mr.
D'Amelio said. "It's the cost of giving ourselves the option," he
said.
Pfizer said it is now expecting $2.01 to $2.07 a share in
adjusted earnings for the full year, up from its previous forecast
for $1.95 to $2.05 a share in earnings. The company lifted the
bottom end of its revenue outlook by $1 billion, now calling for
$45 billion to $46 billion in revenue.
Chelsey Dulaney contributed to this article
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
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