Pfizer narrows its focus and profit soars in 3Q
Pfizer’s third-quarter profit nearly doubled after it booked an $8.1 billion gain on paper by creating a consumer health products joint venture, a key part of the drugmaker’s plan to slim down and focus on innovative medicines.
Those include blockbusters like blood thinner Eliquis, breast cancer drug Ibrance and rheumatoid arthritis pill Xeljanz, which all saw sales jump 18% or more in the latest quarter.
The scaled-down company retains a pipeline of experimental drugs and is on track to gain up to 30 approvals through 2022 for new drugs or additional uses for existing medicines. Pfizer is in late testing of a gene therapy for hemophilia A and will launch three biosimilars, or near-copies of biologic drugs produced by living cells, from December through February.
The New York company’s third-quarter profit handily beat Wall Street forecasts, and it raised its financial outlook for the year.
Pfizer shares jumped 2.9%, or $1.08, t0 $38.35 in afternoon trading.
The biggest U.S. drugmaker – for now – on Tuesday reported earnings of $7.68 billion, or $1.36 per share, up from $4.11 billion, or 69 cents per share. Excluding one-time charges, per-share earnings were 75 cents, 12 cents better than analysts expected.
Total revenue declined 5% to $12.68 billion, due to the loss of sales from consumer products now in the joint venture, plus a 3% dip in sales of longtime top seller Prevnar 13, a vaccine against pneumonia, ear infections and other pneumococcal diseases. Pfizer is testing a new version that protects against 20 disease strains.
In a note to investors, Edward Jones analyst Linda Bannister wrote that Pfizer’s strong pipeline of new drugs should “accelerate growth for the company beginning in 2020.”
Meanwhile, Pfizer Chief Executive Albert Bourla told analysts on a conference call that Pfizer wants to work with policymakers on “common-sense solutions” to high drug prices that would reduce patients’ out-of-pocket costs. Bourla said he can’t “imagine Congress would stand in the way of innovation,” a reference to proposed bills that would reduce drugmakers’ revenue.
Pfizer created its consumer health joint venture with GlaxoSmithKline on Aug. 1, resulting in a much-bigger company with more scale; Pfizer owns 32% of that business, which will eventually go public. Pfizer also is creating a huge drug company by combining its Upjohn off-patent branded drug unit with generic pharmaceutical company Mylan, a deal that should close in mid-2020.
“We’ll be the largest off-patent drug company in the world,” Bourla said in an interview, noting that Mylan offers a pipeline of off-patent pills, patches and other drug forms and Pfizer’s global marketing network will boost their sales.
Pfizer will own 57 % of that company, which will market Pfizer brands including Viagra and pain drug Lyrica.
Pfizer raised its guidance and now expects full-year earnings in the range of $2.94 to $3 per share, up from its July forecast for $2.76 to $2.86, and revenue between $51.2 billion and $52.2 billion, up from $50.5 billion to $52.5 billion.