Drug maker Wyeth reports earnings for the first quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: The company entered the quarter facing a key threat to sales of its heartburn drug Protonix, after Teva Pharmaceutical Industries Ltd. launched a generic version late last year. Wyeth's revenue continues to be threatened by growing competition from generic drugs.
Meanwhile, Wyeth is still contending with thousands of potentially expensive lawsuits that claim its hormone replacement drugs Premarin and Prempro caused breast cancer.
In January, Wyeth said up to 10 percent of its 50,000 employees could lose their jobs by 2011 under a restructuring program. The move comes as Wyeth and its peers struggle to cut costs as key revenue drivers lose patent protection.
Wyeth's product pipeline suffered a blow in March when its intravenous drug candidate methylnaltrexone failed in a late-stage study. The drug was being studied as a treatment for constipation in patients recovering from certain surgical procedures.
During the quarter, Wyeth withdrew its application in the European Union for the menopause drug Pristiq. The U.S. denied approval a year earlier. Also, the labeling for the rheumatoid arthritis and psoriasis treatment Enbrel was given a tuberculosis warning.
Meanwhile, the company ended development contracts with Curis Inc. to develop heart condition treatments, while also ending a partnership with Solvay Pharmaceuticals over a host of early stage drugs aimed at psychiatric conditions.
BY THE NUMBERS: Analysts polled by Thomson Financial, on average, forecast earnings of 90 cents per share on revenue of $5.5 billion.
ANALYST TAKE: Analysts expect Wyeth to meet or beat profit forecasts, but remained concerned over the threat from generic Protonix.
Citi analyst George Grofik generic Protonix has cut into Wyeth's base business and expects sales of the drug to be halved to about $150 million during the quarter. Still, he expects the company to meet Wall Street's profit forecast on the strength of the blockbuster children's vaccine Prevnar, foreign sales of the arthritis drug Enbrel, an overall weaker dollar, and cost cuts.
STOCK PERFORMANCE: Wyeth shares fell 5.5 percent to close at $41.76 on March 31. The stock finished Friday's trading at $44.93.
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