Pfizer 1st Quarter Earnings Disappoint on Slow Drug Sales

Pfizer Inc reported disappointing 1st-quarter revenue as demand for breast cancer drug Ibrance and arthritis drug Xeljanz have missed estimates.

The quarter was hurt by a 5% revenue decline from Pfizer’s division of older drugs. This was partly due to a 12% drop in sales for sterile injectable drugs tied to its Hospira product storages.

Ibrance saw sales of $933 million in the 1st quarter, higher 37.4% from a year earlier. However, it missed analyst’s estimates of $956.6 million, according to Thomson Reuters I/B/E/S.

In addition, the drug has competition with Novartis’ Kisqali and Lilly’s recently approved Verzenio.

Drug treatment of rheumatoid arthritis and psoriatic arthritis Xeljanz reported sales of $326 million. It was well below of analysts’ estimates of $398.5 million.

However, Pfizer’s quarterly profits beat Wall Street estimates on stronger-than-expected sales of pneumonia vaccine Prevnar. The company also reaffirmed its forecast for 2018.

The innovative health segment, including the newer drugs, saw 6% sales growth from a year earlier. Blood thinner Eliquis sales were better than expected, while its Prevnar vaccine franchise was in line with estimates after a 22% jump in sales outside the US.

Prevnar’s sales reached $1.38 billion, which was slightly better than analysts’ expectations.

Net profit climbed to $3.56 billion, or 59 cents per share, in the latest quarter ended April 1 from $3.12 billion, or 51 cents per share, a year earlier.

Adjusted income for the quarter was $4.67 billion or $0.77 per share. It was higher than 44.19 billion or $0.69 per share in the previous year. On average, 15 analysts expected the company to reach earnings of $0.75 per share for the quarter, according to a poll from Thomson Reuters.

On the other hand, total revenue rose 1% to $12.91 billion, while analysts were expecting $13.13 billion.

“Our 1st quarter 2018 financial results were solid, driven by continued strength from our anchor brand, primarily Ibrance, Eliquis, and Xeljanz,” said Ian Read, Chairman and Chief Executive Officer of Pfizer.

Pfizer shares plunged 3.33% to close at 35.40 on Tuesday’s session. Its shares went higher by 0.23% to 35.48 on Wednesday before the bell.

Pfizer still expects to make a decision for its future

The New York-based company is still exploring a sale of its consumer healthcare business. Its decision has been unclear since March when 2 potential buyers pulled out of the bidding process.

The company said it has not received an acceptable offer at this time.

“If we can’t get value, we’ll retain it and invest in it,” said Read. A final decision is still expected this year.

Read previously attempted a huge acquisition of AstraZeneca and Allergan but failed. He said the company does not need a megamerger to drive future growth.

“I don’t see that we need a transformation deal or see one at an appropriate value,” Read said. He added that drugs in development and newer medicines will be able to drive future growth.

The company has 15 potential blockbuster medicines in the pipeline that can be launched by 2022.