It's now become painfully clear to investors why global pharmaceutical giant Pfizer (NYSE:PFE) is so aggressively pursuing a purchase of rival AstraZeneca following disappointing first-quarter results reported today by Pfizer.
For the quarter, revenue tumbled more than $1 billion from the previous year, or 8.5%, to $11.35 billion. Revenue at both the company's established pharmaceutical segment and innovative pharmaceutical segment dipped 13% and 7%, respectively, while oncology drugs partially offset the decline with a revenue increase of 7%. As Pfizer's report shows, $364 million of its drop was tied directly to unfavorable currency translation.
However, the primary culprit for Pfizer's reduced sales figures was ongoing patent losses in a number of key drugs. Cholesterol-lowering medication Lipitor, and the all-time best-selling drug, saw sales dip by 27% to $457 million, while sales of erectile dysfunction therapy Viagra fell 19% to $374 million. Sales of osteoarthritis and rheumatoid arthritis medication Celebrex also fell 4% to $624 million ahead of its upcoming patent loss later this year.
Partially offsetting these losses was an 8% sales improvement in current best-selling drug Lyrica to $1.15 billion, and strong growth from cancer drugs Inlyta and Xalkori, up 40% and 66%, respectively to $88 million each.
In spite of a notable decline of 5% in research and development costs and a 6% drop in selling, general and administrative expenses, profit for the quarter dipped 15.3% to $2.33 billion, or $0.36 per share from $2.75 billion, $0.38 or per share, in the prior-year period. Pfizer repurchased close to 800 million shares over the trailing 12-month period, thus the smaller drop in its EPS.
Looking ahead, Pfizer stuck by its full-year forecast which calls for revenue of $49.2 billion-$51.2 billion and adjusted EPS of $2.20-$2.30.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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