Pfizer Fb
Source: Pfizer.

Pfizer (NYSE:PFE), arguably the preeminent name among Big Pharma companies, reported its second-quarter results roughly two weeks ago and handily surpassed Wall Street's expectations for a change.

In case you missed its Q2 report, the company delivered $11.85 billion in revenue, a 7% decline (inclusive of negative foreign currency effects) from the year-ago period, while adjusted profit per share declined 3% to $0.56. Comparably, Wall Street had been looking for Pfizer to earn just $0.52 per share in profit, all while generating $11.42 billion in revenue. Pfizer also lifted its full-year adjusted EPS forecast to a fresh range of $2.01-$2.07 following its Q2 results from a prior forecasted range of $1.95-$2.05.

On the surface, Pfizer's Q2 looks pretty good next to the Street's expectations. In reality, however, top- and bottom-line figures tell us very little about Pfizer and where it's headed next if we don't understand the dynamics of how it achieved its market-topping sales and profit in the second quarter. In order to gain perspective on the "how" component, we need to dig deep into Pfizer's quarterly conference call and pinpoint what its management team wants Wall Street and investors to know.

With that in mind, here are the five most important things Pfizer, and more specifically CEO Ian Read, who was a fountain of important information in this latest call, wants you to know. Quotes are courtesy of S&P Capital IQ.

Pfizer Fb
Source: Pfizer. 

Psssst, ignore that revenue decline

Over the last 3 quarters, we have seen top line operational growth on a total company basis. Recent product launches and key in-line products performed well, while the impact from the remaining LOEs has diminished. -- Ian Read, CEO

Believe it or not, Pfizer is actually over the hump when it pertains to declining sales caused by the loss of patent exclusivity for certain drugs. Even with its recent loss of anti-inflammatory drug Celebrex, previously a $3 billion-per-year drug, Pfizer has managed to grow its operational sales, which excludes currency fluctuations, divestments, and acquisitions, for three consecutive quarters. While growth has been relegated to the low single-digits, it is nonetheless growth -- something Pfizer shareholders haven't witnessed 2010.

Best of all, Read's commentary alludes that the worst of the patent losses are now behind Pfizer. I would potentially beg to differ with nerve pain therapy Lyrica, a drug that generates $5 billion a year for Pfizer, set to face generic competition in December 2018, but overall the operational growth is encouraging for current shareholders.

Prevnar 13 growth has surprised, but expect it to normalize

Over the next few years, we believe this catch-up opportunity in the U.S. will be robust. However, we will likely need to expend more effort to reach these individuals, and the opportunity will moderate over time as the catch-up opportunity becomes fully realized. -- Ian Read

Pneumococcal vaccine Prevnar 13 was a big hit this past quarter, and sales of the world's best-selling vaccine have been on fire since the Centers for Disease Control and Prevention cleared its uniform use in people over the age of 65 last year. In fact, the Prevnar family of vaccines leaped over Lyrica to become Pfizer's top-selling therapy as of the second quarter.

However, Pfizer wants you to temper your future expectations for Prevnar 13. Read's commentary implies that Pfizer has essentially plucked the low-hanging fruit in the 65-and-up demographic, and it'll now have to boost its marketing budget in order to reach more seniors, both in the U.S. and in select overseas markets. Higher marketing costs coupled with a slower growth rate in the coming years are what investors should expect from the Prevnar vaccine line.

Ibrance is well on its way to blockbuster status

IBRANCE continues to be well received by oncologists treating postmenopausal women with ER-positive, HER2-negative advanced breast cancer, with approximately 3,000 healthcare practitioners already prescribing IBRANCE. This is up from 800 at the end of the first quarter. Our current first-line market share in this patient population was approximately 22% during the quarter, up from 10% during the first quarter. -- Ian Read

Relatively new cancer therapy Ibrance will be one of the cornerstones of Pfizer's success over the next decade. Of course, a lot is riding on the success of Ibrance's product launch, which, according to its Q2 results and Read's commentary, appear to be looking fantastic.

Ibrance

Source: Pfizer.

Per Pfizer's press release, Ibrance sales increased to $140 million in Q2, its first full quarter of sales, up from $38 million in its partial first quarter. The number of physicians who have prescribed the drug nearly quadrupled in Q2, implying that physician awareness of the product is high, while a better than doubling in market share on a quarter-over-quarter basis demonstrates physicians and potentially even patients want Ibrance.

With its launch looking like a success, the tables will now turn to expanding Ibrance's label in up to a half-dozen new indications by 2020.

We're going all in on cancer immunotherapies

[W]e expect to have 5 different IO drugs in the clinic this year and up to 10 different drugs by 2016...We will be collaborating on up to 20 studies with Merck KGaA, and we plan to have up to 6 immunology Phase III trials ongoing by the end of the year across several tumor types, including non-small cell lung cancer, ovarian, renal, bladder and gastric. -- Ian Read

Nci Fb

Source: National Cancer Institute.

Aside from Ibrance, oncology in general is a high-growth focus for Pfizer (among other Big Pharma names). Specifically, Pfizer has made no qualms about its desire to develop cancer immunotherapies, known also as immuno-oncology (IO) therapies, which enhance the body's immune system to more effectively locate and destroy cancer cells. In Q2, Ian Read provided some context on what we might expect from Pfizer's IO program.

Although Read wavered a bit on just how many programs would be ongoing by year's end (five or six), the key point to note is that Pfizer isn't afraid to partner up to deliver results. While skipping melanoma, the typical first step in the IO process, Pfizer is hoping to be the first, or near first, to gain cancer vaccine approval for a handful of indications, including gastric and bladder cancer. IO is a huge market opportunity, so investors would be wise to pay attention to Pfizer's budding IO pipeline and partnerships.

Acquisitions and/or a break-up are still on our radar

While we have seen strong performance from our recent product launches, over the next few years, we are looking at business development as a way to invest in generating sustained near-term and future growth, knowing that the next wave of our potential major registrations or launches won't happen until 2017. In the interim, we have the financial capacity to actually seek out the right deals at the right price that will create value for our shareholders. We are optimistic that we can find these deals as we go through the period to 2017. -- Ian Read

Lastly, Pfizer wants you to know that acquisitions and a possible break-up are still very much on the table at this point. With the exception of Ibrance, there aren't many potential heavy hitters being launched by Pfizer between now and 2017. In response, and with its ample cash flow, Pfizer has made no qualms about its desire to buy growth. The real question is whether it is going to seek out a mega merger or if it'll continue to move the needle with bolt-on acquisitions.

Additionally, Pfizer's split into two major operating components -- global established products (GEP) and Global innovative products (which also typically includes vaccines and oncology) -- still hasn't yielded the answer of whether its GEP could survive as a separate entity, at least not yet. However, Pfizer is still leaving the idea of a break-up or sale of its GEP on the table.

Could Pfizer stock head higher?
Now for the all-important question: Is Pfizer stock worth buying?

We've certainly witnessed a number of positives in its Q2 report, including a decisive end to its revenue downtrend, a push into IO, and rapidly growing sales of Prevnar 13 and Ibrance. But Pfizer is still contending with losses of exclusivity and a very competitive oncology climate. There's only so much Pfizer can do in the cost-cutting and share buyback departments before investors grow weary of waiting for substantive organic growth.

With that in mind, my suggestion is not to feel rushed into buying Pfizer. The company is in the midst of a multi-year turnaround, and it's already more than doubled off its lows. While that's not to say Pfizer won't head higher, I am asserting my belief that much of the aforementioned optimism and catalysts have already been factored into its share price. Until we see marked IO progress and a return to recurring mid-single-digit organic sales growth, Pfizer remains a stock that investors can consider passing on for the time being.

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.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy