DOW JONES NEWSWIRES
Pfizer Inc. (PFE) posted a 2% drop in first-quarter net income,
reflecting a stronger dollar, increased generic competition and
lower sales of its star drug, cholesterol-fighter Lipitor.
The world's largest drug maker by sales also said its
acquisition of rival Wyeth remains on track.
Pfizer's Wyeth acquisition, announced in January, and a deal to
combine its HIV-drug businesses with GlaxoSmithKline PLC (GSK.LN),
show the lengths to which drug companies are going in search of
sales growth as many of their biggest products lose steam. The
pharmaceutical industry is trying to cope with a revenue decline
from patented products and difficulties developing new drugs.
Pfizer reported net income of $2.73 billion, or 40 cents a
share, down from $2.78 billion, or 41 cents a share, a year
earlier. Excluding items, including a tax rate increase and costs
related to the Wyeth deal in the latest quarter, and an increased
tax cost a year earlier, earnings fell to 54 cents a share from 61
cents.
Revenue fell 8.3% to $10.87 billion, with the stronger dollar
contributing 5 percentage points of the decline.
Analysts polled by Thomson Reuters were expecting earnings,
excluding items, of 49 cents a share, on revenue of $11.08
billion.
Shares were up 2% to $13.78 in recent premarket trading.
The stronger dollar is of special concern to Pfizer, which gets
54% of total revenue abroad. International revenue dropped 7%,
reflecting a 10 percentage point hit from the dollar. U.S. revenue
dropped 10%.
Gross margin rose to 87% from 83.2%.
Pfizer is under more intense competition from generic versions
of such products as chemotherapy treatment Camptosar, which
recently lost patent protection. Cholesterol-fighter Lipitor, which
goes off patent in 2011, remains Pfizer's best-selling product.
Pharmaceutical sales dropped 7%. Sales were hurt by the loss of
U.S. exclusivity for Zyrtec in January 2008 and Camptosar in
February 2008.
Lipitor sales fell 13%, hurt by continued intense competition,
while arthritis drug Celebrex saw an 8% sales drop.
It lowered its forecast for reported 2009 earnings, including
Wyeth-related transaction and financing costs, to $1.20 to $1.35 a
share, from $1.34 to $1.49 a share. It still expects earnings,
excluding items, of $1.85 to $1.95 a share. In January, it forecast
that the stronger dollar would reduce 2009 revenue by $3 billion
from a year ago.
Signs of pharmaceutical sales weakness were evident in
first-quarter financial reports issued by GlaxoSmithKline PLC
(GSK), Johnson & Johnson (JNJ), Abbott Laboratories (ABT),
Merck & Co. (MRK) and Schering-Plough Corp. (SGP).
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com