By Ransdell Pierson
Oct 29 Pfizer Inc reported
better-than-expected third-quarter earnings on Tuesday, helped
by cuts in costs and growing sales of cancer medicines approved
over the past two years.
The largest U.S. drugmaker, whose shares rose 1.7 percent,
earned $2.59 billion, or 39 cents per share. That compared with
$3.21 billion, or 43 cents per share, in last year's quarter.
Excluding special charges of $572 million related to
restructurings, asset writedowns and other costs, Pfizer earned
58 cents per share. Analysts, on average, expected 56 cents per
share, according to Thomson Reuters I/B/E/S.
"I like the quarter; it was better than we expected, mainly
from cost cutting and a lower tax rate," said Herman Saftlas, an
analyst with S&P Capital Inc. The effective tax rate fell 0.4
percent to 27.6 percent in the quarter.
Saftlas raised his 12-month share-price target on Pfizer to
$35, from $33, saying the company will report data in coming
months from trials of a number of promising experimental drugs
and from studies testing new uses of its already marketed drugs.
"My feeling is they are making traction on their pipeline
and if they get some good readouts from these trials, we could
see Pfizer shares go higher," Saftlas said.
The bright spot in Pfizer's earnings report was sales of its
oncology drugs, which jumped 24 percent to $407 million.
Oncology has become one of Pfizer's biggest priorities, with
the introductions of Xalkori for lung cancer in 2011, Inlyta for
kidney cancer in 2012 and Bosulif this year for chronic
Pfizer is counting on them to become lucrative products, and
is developing other cancer medicines with possibly far bigger
sales potential. They include an experimental treatment for
advanced breast cancer, called palbociclib, which industry
analysts consider a potential blockbuster.
Xalkori sales almost doubled to $73 million in the quarter,
while Inlyta sales nearly tripled to $83 million.
The company is also focusing on new drugs for a variety of
chronic diseases. It said on Tuesday it had begun late-stage
trials of bococizumab, a drug to reduce "bad" LDL cholesterol by
blocking a protein called PCSK9. Amgen Inc and a
partnership of Regeneron Inc and Sanofi are
conducting late-stage trials of similar injectable drugs, which
analysts believe could become big sellers.
In mid-stage trials, the Regeneron and Amgen drugs slashed
LDL cholesterol more than 60 percent in patients already taking
statin drugs, such as Pfizer's Lipitor.
"It's a very competitive segment and we're in it to be
competitive," Pfizer Chief Executive Officer Ian Read said in an
Pfizer said it is working with Eli Lilly and Co to
complete development of a new type of drug for osteoarthritis
and back pain, called tanezumab, whose trials have been halted
several times by regulators over safety concerns. It works by
blocking a protein called Nerve Growth Factor.
Read said tanezumab could be an attractive alternative to
opioids and to standard pain drugs that can cause bleeding and
ulcers. He said a new category of pain drag was "desperately
Global company sales fell 2 percent to $12.64 billion, hurt
by generic competition for cholesterol fighter Lipitor and other
medicines. Wall Street had expected $12.7 billion. Sales would
have been flat if not for the stronger dollar, which lowers the
value of sales outside the United States.
Sales of Pfizer's biggest product, Lyrica for nerve pain,
rose 10 percent to $1.14 billion. Prevnar, a vaccine against
pneumococcal bacteria that can cause pneumonia and other
infections, grew 1 percent to $959 million, a moderate
turnaround from a 3 percent decline in the prior quarter.
But sales of Lipitor, which lost U.S. patent protection in
late 2011, fell 29 percent to $533 million, as the drug faced
generics in more overseas markets. But its sales topped Wall
Street expectations by almost $55 million, Jefferies analyst
Jeffrey Holford said in a research note.
Pfizer forecast full-year 2013 earnings of $2.15 to $2.20
per share, excluding special items, from its earlier view of
$2.10 to $2.20 per share.