Pfizer’s First Quarter Marked by Strong Pipeline, Jump in Profit, but Lower Revenue than Expected
Overall, Pfizer posted a good first quarter, with sales slightly higher and a 14 percent increase in profits due to lower restructuring costs and a significantly lower tax rate. However, revenue was below Wall Street expectations.
Overall revenues for the quarter were up only one percent, reporting a total of $12.9 billion, up from $12.779 billion in the first quarter of 2017. The company’s Innovative Health division reported $7.820 billion, up six percent from the first quarter in 2017, and Essential Health reported $5.077 billion, down five percent from the previous year’s first quarter.
“Our first-quarter 2018 financial results were solid, driven by continued strength from our anchor brands, primarily Ibrance, Eliquis and Xeljanz,” Ian Read, Pfizer’s chairman and chief executive officer, said in a statement. “The Essential Health business delivered strong growth in emerging markets and biosimilars but was negatively impacted by continued legacy Hospira product supply shortages in the U.S. as well as product losses of exclusivity. We remain focused on executing our commercial strategies, managing expenses, advancing our pipeline and prudently allocating our capital to position Pfizer for sustainable success.”
There’s still no real news on Pfizer’s Consumer Healthcare business. Around October 2017, the company decided to sell or spin off that division. The brand has at least five major categories: dietary supplements, pain management, gastrointestinal, respiratory and personal care. Brand name products include Centrum, Caltrate, Emergen-C, Thermacare, Nexium 24 Hour, Robitussin, ChapStick and Anbesol. Ten of the company’s brands each exceeded $100 million in sales in 2016. It is valued between $15 and $20 billion.
In March, it looked like either Reckitt Benckiser Group or GlaxoSmithKline would buy the unit, but both walked away from the deal. Pfizer today indicated it expects to make a decision about the unit this year.
The consumer unit, which is part of the company’s innovative unit, gained seven percent.
The company benefited from the Trump tax deal. It used part of the extra money available to pay shareholders $2 billion in dividends and to buy back $6.1 billion of its own shares. The company’s effective tax rate on adjusted income is about 17 percent.
Pfizer also provided a comprehensive pipeline update. The company currently had 13 programs in Phase III, including Bavencio (avelumab) for non-small cell lung cancer, gastric cancer, ovarian cancer, renal cell carcinoma, squamous cell carcinoma of the head and neck, and in collaboration with Merck KGaA, urothelial cancer. It also has six biosimilars programs in registration/Phase III, including possible copycats for Humira (adalimumab), Avastin (bevacizumab), Epogen and Procrit (epoetin alfa), Neupogen (filgrastim), Rituxan/MabThera (rituximab) and Herceptin (trastuzumab).
Pfizer has 10 programs in Phase II, including an ACC inhibitor for non-alcoholic steatohepatitis (NASH), Coagulation Factor IX for hemophilia, Dekavil, an IL-10 agonist, for rheumatoid arthritis, and domagrozumab, a myostatin inhibitor for Duchenne muscular dystrophy (DMD).
In a statement, Read said, “our pipeline today, with a range of targeted compounds, biologics and vaccines, is as deep and focused as it has ever been. With several potential near-term opportunities in core therapeutic areas, I believe our pipeline presents an unprecedented opportunity to deliver a life-changing impact on a growing number of patients while creating enhanced value for all of our stakeholders.”