Pfizer, Lilly profits beat Street; generics take toll
By Bill Berkrot and Ransdell Pierson
(Reuters) - Pfizer Inc (PFE.N: Quote) and Eli Lilly and Co (LLY.N: Quote) reported better-than-expected fourth-quarter profits as deals, cost cutting and strong sales of new products helped the pharmaceutical companies weather generic competition for once top-selling products.
The U.S. drugmakers also issued 2013 forecasts on Tuesday that encouraged investors, who sent shares of both companies up more than 3 percent.
Excluding special items, Pfizer earned 47 cents per share, topping analysts' average expectations by 3 cents, according to Thomson Reuters I/B/E/S. [ID:nL1N0AY1NQ]
But global sales for the largest U.S. drugmaker fell 7 percent to $15.1 billion as sales of Lipitor, formerly the world's top selling prescription medicine at nearly $13 billion a year, plunged 71 percent to $584 million. Sales of the cholesterol fighter began tumbling in November 2011, when its U.S. patent expired and cheaper generics flooded the market.
Pfizer's quarterly net profit quadrupled to $6.32 billion, or 86 cents per share, due to the November sale of its nutritional products business to Swiss food group Nestle SA NESN.VX for about $12 billion. It is also preparing to spin off its animal health business through an initial public offering expected to bring in billions more.
"I don't think the Lipitor expiration is an issue for our investors today," Chief Executive Ian Read said in an interview. "We've done what we needed to do and (investors) are focused on the future," he added, referring to the company's decision to spin off the nutritional and animal health units in order to focus on its more-profitable core pharmaceuticals business.
Pfizer recently won approvals for highly promising new products, including the blood clot preventer Eliquis, which it shares with Bristol-Myers Squibb Co (BMY.N: Quote), and Xeljanz for rheumatoid arthritis.
In mid to late-stage trials, it is testing treatments for cholesterol, psoriasis and numerous types of cancer. Read said Pfizer's biggest priority is developing the drug pipeline and getting the products to market. Continued...