Pfizer Inc, the world’s biggest drug maker, reported second-quarter profit that topped analyst estimates, boosted by a weakening dollar and sales of its pain medications.
Profit excluding certain items was 60 cents a share, beating the 59-cent average estimate of 16 analysts surveyed by Bloomberg. Net income rose to $2.61 billion, or 33 cents a share, from $2.48 billion, or 31 cents, a year earlier, the New York- based company said today in a statement. Sales declined 0.9 per cent to $16.98 billion.
Pfizer is selling its animal health and infant formula units and trimming its workforce to prepare for the loss in November of exclusive rights to Lipitor, the world’s best- selling drug with $10.7 billion in annual sales. Pfizer has three late-stage experimental medicines that analysts estimate may bring in more than $3.5 billion annually by 2015.
“Investors are shifting their focus back to the pipeline, shifting back to the cost cutting and the share repurchases,” said Damien Conover, an analyst at Morningstar Inc, in a telephone interview. “We probably have one more quarter where the divestitures will be of high interest, but people are going back to the core business.”
Pfizer reiterated its 2011 profit forecast range of $2.16 to $2.26 a share. Analysts estimated $2.25 a share. The company also maintained its forecast for 2012, the first full year of generic competition to Lipitor.
Pfizer fell 24 cents, or 1.2 per cent, to $19.01 yesterday in New York Stock Exchange composite trading.
DOLLAR DECLINE
The dollar’s slide against other currencies helped boost revenue by 4 percentage points as sales outside the US were converted to a weakening dollar. Pfizer last year received 57 per cent of its revenue from outside its home country, according to data compiled by Bloomberg. The dollar fell 14 per cent from the end of 2010’s second quarter to June 30 of this year, as measured against a basket of six other currencies.
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“Foreign exchange should represent a topline tailwind for the US pharma group this quarter and for the remainder of 2011,” said Christopher Schott, a New York-based analyst for JPMorgan Chase & Co, in a note to clients on July 13.
Pfizer Chief Executive Officer Ian Read said on July 7 he is divesting the company’s animal health and nutrition units to buy back shares and focus on developing new drugs. The units may fetch $22 billion, according to Seamus Fernandez, an analyst at Leerink Swann & Co. Pfizer’s animal health division had sales last year of $3.48 billion.
PATENT PROTECTION
Nine of the world’s 15 best-selling medicines will lose patent protection during the next five years. Chief among these products is Lipitor, which lost market exclusivity in Spain and Canada last year and will have generic US competition in November.
Lipitor had sales of $2.59 billion in the second quarter beating the $2.43 billion Fernandez estimated. Sales will decline by half next year after generics makers flood the US market with cheaper copies, according to eight analysts surveyed.
Sales of Pfizer’s Enbrel arthritis treatment rose 13 per cent $914 million for the quarter. The pain pill Lyrica increased 19 per cent to $908 million. Sales of pneumonia vaccines Prevnar and Prevnar13 rose 44 percent to $821 million.
Pfizer acquired Enbrel and Prevnar in the $68 billion purchase of Wyeth in 2009.
Pfizer’s most promising experimental drugs are its apixaban blood thinner, tofacitinib for rheumatoid arthritis and crizotinib for lung cancer. Crizotinib was accepted for priority review by the US Food and Drug Administration, with a decision expected by year’s end. Pfizer has said it will seek approval of tofacitinib and apixaban this year. The company partners with New York-based Bristol-Myers Squibb Co on apixaban.
The company is also awaiting a decision from the FDA on whether it can market Prevnar to adults. Two studies presented in May found the shot was effective in adults over the age of 50, supporting the company’s application.