Pfizer swings to 4Q profit after rough year, hikes 2017 view
By Linda A. Johnson
Pfizer posted disappointing profit for the fourth quarter to cap a difficult 2016, but it predicted slightly better results for this year.
The biggest U.S. drugmaker earned less than analysts had expected, but revenue came in higher than projected.
The maker of Viagra and pain treatment Lyrica on Tuesday reported net income of $775 million, or 13 cents per share, versus a loss of $172 million a year ago, as it reduced spending on administration, sales, marketing and lawsuits.
Excluding one-time items, profit was 47 cents per share, 3 cents below analyst estimates. Quarterly revenue totaled $13.63 billion, just above the $13.55 billion Wall Street had expected.
“As we look at the year ahead, Pfizer’s well positioned,” CEO Ian Read told analysts on a conference call.
Company executives cited approval last year of new medicines for eczema and pain, approvals of three existing drugs for use in additional patient groups and possible approval this year of a new cancer drug.
Amid ongoing public frustration over drug prices, Read said in an interview with The Associated Press Tuesday that the problem is that insurers are pushing more costs onto patients. He said Pfizer won’t pledge to limit annual price increases, as a few rivals recently did. Pfizer typically raises the list price on most of its drugs about 10 percent twice each year, though wholesalers and other middlemen get part of those increases.
Meanwhile, executives of several other big drugmakers met Tuesday with President Trump, who called for lower drug prices but less regulation, saying that could speed up drug approvals and increase competition.
Pfizer shares rose 42 cents to close at $31.73.
Revenue edged up 1 percent in the U.S., where Pfizer makes about half its sales, but fell 7 percent elsewhere.
Pfizer’s Innovative Health segment, which sells newer, patent-protected medicines, reported worldwide fourth-quarter sales of $7.73 billion, up just 1 percent. Sales were driven by better-than-expected revenue for Viagra, Lyrica, new breast cancer drug Ibrance, rheumatoid arthritis pill Xeljanz and a couple of other drugs. However, its top seller, the Prevnar 13 vaccine against pneumonia, ear and other common infections, had sales plunge 24 percent to $1.42 billion, as the number of unvaccinated adult Americans has dropped.
Sales fell 8 percent to $5.9 billion at Pfizer’s essential health business, which markets older, mostly off-patent drugs, mainly due to lower overseas sales.
Sales of consumer health products such as Advil pain reliever, Chapstick and Centrum vitamins increased 2 percent to $950 million.
Pfizer Inc., based in New York, said it expects 2017 earnings in the range of $2.50 to $2.60 per share, with revenue in the range of $52 billion to $54 billion. Analysts were expecting earnings of about $2.59 per share and revenue of $54.5 billion.
For all of 2016, Pfizer reported net income of $7.2 billion, or $1.17 per share, on revenue of $52.8 billion.
Last year, the Obama administration blocked Pfizer’s attempt to acquire the Irish drugmaker Allergan in a maneuver to reduce Pfizer’s U.S. tax rate that would have moved its headquarters, just on paper, to Dublin.
Pfizer also scrapped development of a high-priced new cholesterol drug once viewed as a big seller, as sales expectations dropped amid increasing pressure for lower prices from insurers and prescription benefit managers. And Pfizer decided in September not to split into two companies to accelerate growth — a move some analysts had hoped would boost Pfizer’s lagging stock price.
Pfizer said it expects to buy back another $5 billion of its shares in 2017.