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Charges, generic Lipitor cut Pfizer Q1 net 19 pct

Charges, generic Lipitor cut Pfizer Q1 net 19 pct

Pfizer Inc.'s first-quarter profit fell 19 percent, because of legal and other charges and new generic competition to blockbuster cholesterol pill Lipitor that cut the drugmaker's U.S. sales by 15 percent.
The world's biggest drugmaker beat Wall Street's profit expectations but narrowly missed its sales forecast in the first full quarter since Lipitor lost U.S. patent protection.
Pfizer lowered its adjusted profit forecast for 2012 by 6 cents, to $2.14 to $2.24 per share. Analysts had predicted $2.26 per share. Including one-time items, it expects earnings per share of $1.23 to $1.38.
New York-based Pfizer said it lowered that forecast and cut its expected 2012 revenue by $2.5 billion to between $58 billion and $60 billion because of its deal to sell its infant-nutirition business to Switzerland's Nestle SA for $11.85 billion early next year.
Previous forecasts had factored in the steep drop in revenue from Lipitor, which was the top-selling drug ever with peak sales of $13 billion. Pfizer has offered unprecedented insurer rebates and discounts to patients who stay on its brand, until more generic versions hit drugstores on May 31 and prices drop much more.
In the latest quarter, Lipitor revenue fell 42 percent to $1.4 billion, mainly due to a 71 percent plunge in the U.S. However, CEO Frank D'Amelio said in an interview that U.S. market share was "was 2 1/2 times higher than what we would have expected" without the deals.
The maker of Viagra said net income was $1.79 billion, or 24 cents per share, down from $2.22 billion, or 28 cents a share, a year earlier.
Excluding one-time items, Pfizer would have made $4.43 billion, or 58 cents per share. Analysts expected 56 cents a share.
Charges totaled $2.64 billion after taxes: $1.07 billion for adjustments to the value of acquired businesses, $115 million in acquisition-related costs, and $1.45 billion for a mix of restructuring and productivity charges, a writedown on a drug compound acquired when Pfizer bought fellow drugmaker Wyeth in 2009, and legal fees.
Those included a $450 million charge for a confidential agreement announced Tuesday to end a lawsuit with Brigham Young University and a professor there. The suit concerned companies that Pfizer bought allegedly breaching a 1991 agreement on research involved in the discovery of blockbuster painkiller Celebrex.
Revenue totaled $15.4 billion, down 7 percent from $16.5 billion a year ago. Analysts were expecting $15.46 billion. Generic competition cut total revenue by $1.3 billion.
Sales in the U.S., where Pfizer's patent expired on Nov. 30 for Lipitor, the top-selling drug in history, fell to $5.95 billion, from $7.02 billion. International sales edged up 1 percent, to $9.45 billion.
The nutrition deal is to close in the first half of 2013. Pfizer plans to use the proceeds to continue buying back shares to keep boosting its stock.
The company also is planning to spin off or otherwise divest its animal health business, sometime between this July and July 2013.
"We are building two strong cores, an innovative core and a value core," with consumer health products helping boost both, CEO Ian Read told analysts.
Pfizer shares edged up 4 cents in midday trading to $22.94. But that's up about 36 percent since Read became CEO in December 2010.
Still, analyst Steve Brozak of WBB Securities said when company executives keep highlighting share buybacks rather than acquisition plans, "this is the epitome of quiet desperation." He said the company doesn't have enough drugs in development to replace Lipitor's revenue.
Other analysts were more positive.
Linda Bannister of Edward Jones said Pfizer's earnings beat was driven by greater-than-expected cost controls, adding that she's "pleased with Pfizer's ability to execute on its strategy to divest non-core assets and concentrate" on prescription drugs.
Bannister, who has a Buy rating on Pfizer, noted it "has several late-stage pipeline products that are expected to be approved in the near term," including potential blockbusters Eliquis for stroke prevention and tofacitinib, the first new pill in a decade to delay the worsening of rheumatoid arthritis.
Eliquis could get U.S. approval on June 28; tofacitinib faces review by an expert panel on May 9.
Revenue from prescription medicines fell 8 percent to $13.07 billion. After Lipitor, the second top-selling drug was Lyrica, for fibromyalgia and pain. Its revenue jumped 16 percent to $955 million.


Updated : 2021-06-16 03:57 GMT+08:00