Pharmaceutical giant Pfizer (NYSE:PFE) reported fourth-quarter results Tuesday that beat expectations for revenue, but missed on the bottom line. That miss, combined with weak profit guidance, helped propel shares lower. The stock was trading down by more than 5% as of 3 p.m.
Revenue, which was diminished by the spinoff of its consumer healthcare business in the third quarter, fell 9% to $12.69 billion, but that was better than the analysts' consensus estimate of $12.61 billion. Excluding the impact of the divestiture, revenue grew 2% operationally. Adjusted earnings per share fell 13% to $0.55, compared with analysts' consensus forecast of $0.57.
Pfizer is in the process of spinning off its Upjohn unit, which will be combined with Mylan (NASDAQ:MYL) to form a new company to be named Viatris. Mylan's shares were actually up 3% in late afternoon trading.
A large share of the quarter's declines came from the recent arrival on the market of generic competition for Lyrica, a drug that will be part of the spinoff. After multiple generic companies launched their versions, Lyrica sales plummeted 67% in the quarter. But operational revenues increased by 9% for Pfizer's biopharma business, which will be the part of the company that remains after the Upjohn spinoff.
Pfizer's guidance for 2020 was complicated by all the moving pieces, but its earnings forecast for the full company as it exists today was not entirely to the market's liking. Management expects earnings per share to land in the $2.82 to $2.92 range, the midpoint of which was below analyst's consensus expectation of $2.90.
Investors may also have been disappointed by the revenues from two of the company's blockbuster biopharma drugs: Ibrance, sales of which were flat from Q3 despite 25% growth year-over-year; and Xeljanz, which had a sequential sales gain of only about 1%. Management expressed confidence that sales of those two drugs would return to growth, and was optimistic about the pipeline developments it expects this year.