Pfizer Inc. (PFE) Blames Loss Of Exclusivity In US For Offsetting Operational Growth In 4Q

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Pfizer Inc. (NYSE:PFE) said that the loss of exclusivity and the expiration of the jointly promoted drug have completely offset the operational growth achieved during the fourth quarter. Additionally, the foreign exchange dealt a blow to the extent of 3% or $449 million during the December quarter. Yet, the company’s adjusted earnings came in above the Street analysts’ expectations by a penny.

However, Pfizer Inc. (NYSE:PFE) disappointed investors by guiding both adjusted earnings, as well as, revenue for the calendar year 2015 blow the Street analysts’ predictions. As a result, investors’ started to sell the stocks even in the pre-market trading activities.

Generic Version

The drug maker’s Celebrex began facing generic competition towards the end of fourth quarter. The company’s realized revenue of $550 million during the fourth quarter, which was 31% lower than the year-ago quarter’s $798 million. The revenue will likely to witness further downtick in the coming quarters as the effect of generic version is yet to be witnessed for a full quarter.

Aside from this, Pfizer Inc. (NYSE:PFE) had to face the expiry of jointly promoted drug like Enbrel in America, as well as, Canada. This apart, the termination of collaboration deal for Spiriva in some countries affected its results. The loss of exclusivity in some markets has also impacted the results during the fourth quarter.

The company was able to achieve operational growth in developed markets fueled by certain key products in the United States. In the emerging markets, the company could witness 7% growth operationally due to Lipitor, especially in China, Prevenar, and Enbrel.

4Q Results

Pfizer reported net income of $1.23 billion, down 52% from $2.57 billion. Similarly, earnings per share plummeted 51% to 19 cents from 39 cents in the prior year quarter. On an adjusted basis too, net income fell 7% to $3.44 billion from $3.69 billion and earnings 4% to 54 cents a share from 56 cents a share in the year-ago quarter.

The company’s top line fell 3% to $13.12 billion from $13.56 billion in the previous year quarter. Analysts’ predicted the company to earn 53 cents a share and generate revenue of $12.9 billion for the December quarter.

Outlook

Moving ahead, Pfizer Inc. (NYSE:PFE) expects to earn adjusted earnings of $2 – $2.10 a share on revenues of $44.5 – $46.5 billion for the current calendar year 2015. Wall Street analysts predict the company to earn $2.18 a share and revenue of $47.56 billion.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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