Sale of company helps Pfizer exceed expectations for Q3

DRUGMAKER Pfizer has beaten Wall Street expectations with higher profit and revenue in the third quarter, the last before generic competition starts wiping out sales of Lipitor, the cholesterol blockbuster that has buoyed the company for years.

Pfizer said that its third-quarter profit more than tripled, lifted by higher international revenue, the sale of a business and much lower charges compared with the year before. Pfizer also raised its earnings outlook.

The world’s biggest drugmaker said its net income was $3.74 billion (€2.73bn), or 48 cents (35 cent) a share. That was boosted by a $1.32bn gain from the August sale of its Capsugel capsule-making business.

A year earlier, Pfizer reported net income of $866 million, or 11 cents per share, depressed by $3.51bn in charges, including restructuring costs, severance payments and asset writedowns related to Pfizer’s 2009 purchase of drugmaker, Wyeth, and a $701 million litigation reserve.

The maker of impotence pill Viagra and smoking cessation drug Chantix said adjusted income was 62 cents per share.

That excludes net charges totalling nearly $1.1bn: $2.26bn for writedowns of assets with reduced values; $242m for acquisition-related costs and $891m for restructuring and legal costs, partly offset by the gain from the Capsugel sale. The acquisition costs include continuing charges from the Wyeth purchase, plus Pfizer’s $3.6bn purchase of pain-drug maker King Pharmaceuticals on February 28.

Revenue rose 7% to $17.2bn, including a 6% boost from favourable currency exchange rates.

The results beat expectations for adjusted earnings of 55 cents per share on revenue of $16.43 bn.

Pfizer raised its 2011 profit forecast to a range of $1.20 to $1.30 per share, from $1.09 to $1.24 per share. Excluding one-time items, it expects earnings per share of $2.24 to $2.29, also up several cents.

The company reaffirmed its forecast for 2012, the first full year after Lipitor, the world’s top-selling drug with about $11bn in annual revenue, loses its US patent on November 30. The company expects 2012 revenue of about $63.5bn and adjusted earnings per share of $2.25 to $2.35.

“Overall, I am very pleased with our financial performance despite the impact of product losses of exclusivity totalling approximately $950m this quarter and the challenges posed by current global market and economic conditions,” chief executive Ian Read said in a statement, adding, “We remain well prepared for the Lipitor US loss of exclusivity later this month and in various other countries shortly thereafter.”

US revenue fell 3% to $6.9bn, but international revenue, boosted by currency exchange rates, rose 15% to $10.3bn.

Prescription drug sales totalled $1.75bn, up 6%, as sales in emerging markets such as China and India jumped 18% to $2.45bn.

Sales were led by Lipitor, down 2% at $2.6bn, although US sales jumped up 13% to $1.47bn because of price increases and a final advertising push.