Pfizer earnings prompt calls for deal-making

Pfizer posted basically flat first-quarter earnings, prompting suggestions the largest US drugmaker needs to do deals in order to improve its growth prospects.

Sales of breast cancer drug Ibrance, which is expected to face competition from rival Novartis’s Kisqali, rose more than 58% to $679m (€622.8m), just missing the consensus estimate of $682m.

Sales of rheumatoid arthritis drug Xeljanz and pneumonia vaccine Prevnar also fell short of analyst estimates.

“Key franchises came in well below expectations, raising concerns about Pfizer’s ability to grow in the absence of M&A,” Goldman Sachs analysts said.

Revenue fell 1.7% to $12.78bn, missing the average estimate of $13.09bn. Pfizer, which employs 4,000 in Cork, Dublin and Kildare, said fewer selling days in the quarter, compared with the year-ago quarter, reduced sales by about $300m.

Overall, sales of Pfizer’s array of patent-protected drugs jumped about 12% in the quarter to $7.42bn, while sales of its generics and biosimilars fell 10% to $5.36bn.

“Because its pipeline is on the thinner side, continued M&A will likely be part of Pfizer’s future,” said Bernstein analyst Tim Anderson. “It has said targets of all sizes are theoretically on the table.”

Pfizer shares fell 1.2% at one stage in New York trading. Pfizer, which closed its $14bn acquisition of Medivation in September, said net profit rose to $3.12bn in the first quarter, from $3.04bn a year earlier. Total expenses fell 6% to $7.49bn in the quarter.

Excluding items, the company earned 69 cents per share, beating the average analyst estimate of 67 cents.

Pfizer reaffirmed its 2017 adjusted earnings forecast of $2.50 to $2.60 per share on revenue of $52bn to $54b.

Reuters, Irish Examiner staff


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