Pfizer earnings plunge 52% as sales fall

PFIZER, the world’s biggest drugmaker, said third-quarter earnings plunged 52% on lower sales of its Celebrex painkiller and Neurontin epilepsy drug.

Shares posted their biggest decline this year.

Net income declined to $1.59 billion (€1.33bn) after acquisition costs from $3.34bn (€2.78bn) a year earlier, the New York-based company said.

Revenue fell for the first time in four years. Pfizer said it can’t project earnings for the next two years.

Demand for Celebrex dropped 44% after US regulators added a warning of heart risks to its label. Neurontin fell 80% after cheaper generic products became available.

The declines will put pressure on Chief Executive Hank McKinnell to complete his plan to cut $4bn (€3.3bn) from annual costs by 2008 as patents expire on some of Pfizer’s most profitable drugs.

Sales of cholesterol treatment Lipitor, the world’s biggest-selling medicine, rose less than half as much as expected, by 6% to $2.89bn (€2.4bn). Pfizer said US sales rose just 1%, reflecting an “unexpectedly rapid slowdown’ in demand and increased competition.

Pfizer’s quarterly earnings before $1.96bn (€1.63bn) in acquisition and cost-cutting expenses were 51 US cents a share, the company said. It was expected to have a profit excluding certain costs of 48 cents a share.

Quarterly revenue fell 5% to $12.2bn (€10.1bn), missing analysts’ estimate of $12.5bn (€10.4bn).

Celebrex sales fell to $446 million (€372m). Celebrex was the world’s best-selling arthritis treatment in 2004.

In April, Pfizer suspended sales of Bextra after the product was tied to a potentially fatal skin disorder. Bextra generated $1.29bn (€1.07bn) in 2004 revenue.

In addition to Neurontin, Pfizer confronted generic competition this year for the Diflucan anti-infective and the Accupril high blood pressure drug. The three products had combined 2004 sales of $4bn (€3.3bn). Neurontin sales fell to $155m (€129m) from $764m (€637m).

The company said it can no longer project profit will rise at least 10% in 2006 and 2007 as it forecast in April.

Pfizer has lost $38bn (€31.7bn) in market value since June and at $176.7bn (€147.7bn) ranks behind Johnson & Johnson and Wal-Mart Stores Inc.

Viagra sales declined 4% to $386m (€322m). The company agreed to change the impotence pill’s label to warn doctors of a potential for sudden vision loss in some who took the drug.

Viagra had $1.68bn (€1.4bn) in sales last year.

Pfizer is slimming down its sales force and closing plants as part of a cost-cutting program.

It said it expects to reduce costs by more than $600m (€500m) this year, compared with the plan to cut $400m (€333m) announced in July.

The company expects savings of $2bn (€1.66bn) in 2006 and about $3.5bn (€2.92bn) in 2007.