Financial Performance

Generic Competition Hits Pfizer’s Q2 Sales

The drug maker cites headwinds from losses of market exclusivity for the 14% drop in Essential Health revenues.
Matthew HellerAugust 2, 2017

Pfizer posted better-than-expected quarterly earnings but revenue missed analysts’ estimates, reflecting in part the loss of market exclusivity for some drugs.

For the second quarter, the drugmaker posted net income of $3.07 billion, or 51 cents per share, compared to $2.05 billion, or 33 cents per share, a year earlier. Revenue fell to $12.9 billion from $13.15 billion.

Excluding items, Pfizer earned 67 cents per share, beating the average analysts’ estimate by a cent. But revenue missed projections of $13.08 billion.

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“I am pleased with our second-quarter 2017 results and our year-to-date performance is in line with our expectations,” CEO Ian Read said in a news release, citing revenues from the company’s Innovative Health segment, which rose 8% to $7.67 billion.

But Essential Health revenues fell 14% to $5.23 billion, primarily due to continued headwinds from products that recently lost marketing exclusivity. Sales of the antidepressant Pristiq, which went off patent in the U.S. in March, dropped 76% to $46 million, while sales of Vfend, a treatment for fungal infections, fell 38% to $101 million.

“These declines were partially offset by 60% operational growth from biosimilars,” Pfizer said.

Looking ahead, Read said the company has a “strong pipeline with a steady flow of scientific innovation coming from all of our key therapeutic areas. Over the next five years, we project the potential for approximately 25 to 30 approvals of which up to 15 have the potential to be blockbusters, and we believe half of these potential blockbusters could receive approval by 2020.”

But CNBC noted that looming patent expirations on Pfizer’s sexual dysfunction treatment Viagra, pain drug Lyrica and falling sales of pneumonia vaccine have “pushed analysts to prescribe deals to resuscitate the company’s growth.”

In addition, sales of the Xtandi prostate cancer drug were flat compared to the final quarter of last year.

Flagging sales “could prompt investors to ask searching questions about the $14 billion price tag that Pfizer paid to take over Medivation, the previous owner of the drug,” The Financial Times said.