Pfizer reports drop in net income and profits

PFIZER, THE world’s largest drug company by revenues, reported a steep drop in first-quarter profits as the impact of losing exclusive rights to sell its top-selling drug, Lipitor, hit its bottom line.

Net income at Pfizer fell 19 per cent year on year to $1.79 billion, or 24 cents a share. That compared with $2.2 billion, or 28 cents per share, a year earlier, when results suffered because of a litigation charge and costs of revamping research operations.

Excluding special charges to boost productivity and address legal matters, Pfizer earned 58 cents per share, from 60 cents a year ago.

The results exceeded estimates by Wall Street analysts, as improved profit margins and strong sales of its Lyrica nerve-pain drug partly offset plunging demand for its loss of patent protection on Lipitor, its blockbuster cholesterol drug.

Overall revenues fell 7 per cent from a year ago to $15.4 billion.

Pfizer’s patent for Lipitor expired in November, exposing the brand to cheaper generic competition. Sales of the drug slipped 71 per cent to $383 million during the quarter.

Ian Read, Pfizer’s chief executive, said he was pleased with the results and that the company’s strength in China and growth in other key brands helped offset the loss of Lipitor.

“The story here is that Pfizer is dealing with its Lipitor patent loss surprisingly well,” said Morningstar analyst Damien Conover.

“When you lose the biggest medicine in the world and your earnings per share only fall 3 per cent, that’s a lot better than people expected a few years ago. Pfizer is mitigating the patent loss by cutting costs and bringing in good new drugs.”

Pfizer, whose research laboratories have produced few big-selling drugs in the past decade, is now eagerly awaiting US approvals of two potential blockbuster treatments: blood clot preventer Eliquis and tofacitinib to treat rheumatoid arthritis.

Pfizer agreed last week to sell its baby formula business to Nestlé for $11.85 billion to focus on its core pharmaceuticals business.

It said it still intended to decide this year whether to divest its animal health unit. – (Copyright The Financial Times Limited 2012/ Reuters)