Pfizer shares dip as sales top $13bn

Pfizer reported better-than-expected quarterly results, driven by lower taxes and sales of generic medicines, but revenue from its branded patent-protected medicines brought disappointment.

Shares in the US pharmaceutical giant, among Ireland’s largest exporters employing 4,000 people here, fell almost 2.5% at one stage yesterday. The shares are up 13% this year, however.

The drugmaker did not offer any hints on whether it plans to split into two separate companies, a long-mulled potential decision that has kept investors in suspense.

Pfizer said second quarter revenue rose 11% to $13.15bn (€11.77bn), topping the average analyst estimate of $13.01bn.

Sales of generic medicines rose 16% to $6.04bn, helped by Pfizer’s $16bn purchase last year of generic hospital products company Hospira.

Although generics beat expectations, BMO Capital Markets analyst Alex Arfaei said sales of Hospira products, at $1.14bn, were 7% below his forecast, and suggested “limited revenue synergies” from that acquisition.

Sales of Pfizer’s patent-protected drugs rose 7% to $7.11bn, 2% below Mr Arfaei’s estimate.

Higher sales of nerve-pain drug Lyrica helped offset disappointing sales of its Prevnar vaccine for pneumococcal infections.

In April, Pfizer terminated a $160bn deal to acquire Irish-based drugmaker Allergan after the US Treasury Department issued new rules restricting tax inversion transactions aimed at slashing taxes.

With collapse of the deal, investors have shifted their focus to whether Pfizer will break up, creating one company specialising in patent-protected drugs and another geared toward branded generic drugs.

Pfizer for several years has weighed whether such a split makes sense, largely because its patent-protected medicines routinely enjoy sales growth, while its portfolio of generics usually post declines. Pfizer said yesterday it expects to decide by the end of the year.

The company’s new breast cancer treatment, Ibrance, generated sales of $514m, up from $140m in the year-ago quarter and exceeding Evercore ISI’s forecast of $496m.

Pfizer earned 64 cents per share, excluding special items, beating the average analyst estimate by 2 cents.

Net income fell to $2.02bn, or 33 cents per share, from $2.63bn, or 42 cents per share, hurt by restructuring charges and acquisition costs. Pfizer reaffirmed it expects 2016 earnings of $2.38 to $2.48 per share.

It earned $2.20 per share in 2015. Separately, the company said it had reached a $486m settlement of shareholder litigation accusing it of causing losses for shareholders by concealing safety risks of its Celebrex and Bextra drugs.