Primary care sales fell 25%, while established products rose 17%. The cause was the same; Lipitor went generic, so it was transferred to the old-timers section. Pfizer said it retained about 2.5 times the market share that a typical drug going off exclusivity captures, but it did that by substantially discounting the drug; U.S. sales still fell 71% year over year.
Specialty care declined 9%. Like primary care, most of the decline can be linked to a shift of generics, mainly Vfend and Xalatan, to the established products division. The unit was also affected by Prevnar's sales decline as kids eligible for a make-up booster have already had their shot. Sales of the vaccine were also affected by a decrease in the birth rate. Health care might be recession-resistant because patients still need drugs even in lackluster economies, but I guess that doesn't hold if the economy is bad enough to reduce the number of patients born.
Last month, Pfizer said it was selling its nutrition business to Nestle, so the company removed sales of the division from its guidance. Adjusted EPS are now expected to come in between $2.14 and $2.24 next year. Until the close of the sale, earnings from the nutrition division will be included in the discontinued operation section.
Emerging from the basement post-storm, the new Pfizer doesn't look too shabby. Despite the loss of Lipitor exclusivity, overall revenue only decreased 7% and cost-cutting measures and share repurchases helped bring that to just a 3% decline on the adjusted EPS level.
Pfizer's breakup, which is expected to include divesting its animal-health division, will create a leaner, more-focused company. But the smaller size means that new drug launches will be increasingly important. Pfizer has two major catalysts coming up: Tofacitinib, an oral rheumatoid arthritis drug that will compete with older injected drugs from Abbott Labs
Here's hoping they blow the roof off their launches.
Looking for more dividend ideas? Check out the Fool's new free report "Secure Your Future With 9 Rock-Solid Dividend Stocks." Get your free copy.