Cost controls help Pfizer, Merck weather weak quarter
By Bill Berkrot and Ransdell Pierson
(Reuters) - Big Pharma is still relying on belt-tightening to prop up financial results.
Pfizer Inc (PFE.N: Quote) and Merck & Co (MRK.N: Quote) said on Tuesday their quarterly results were again hit by generic competition for once top-selling products and the toll of a strong dollar on overseas revenue. Controls on marketing and administrative expenses, and other costs, helped them report earnings slightly above Wall Street estimates.
But neither company offered investors a quick return to growth based on new products, even if the worst of the "patent cliff" for best-selling drugs that have lost marketing exclusivity is behind them.
"We are managing our costs in order for us to meet our bottom line (earnings) guidance," Chief Executive Kenneth Frazier said on a conference call with analysts.
Frazier said the company continues to have faith in the value of its animal health unit and consumer healthcare business, both of which had lower sales in the quarter.
"If we were to view these assets as being more productive outside the company, we would consider other alternatives," he said.
Pfizer earlier this year completed the spinoff of its own animal health business into a new company called Zoetis (ZTS.N: Quote), only months after selling off its nutritional products business. It aims to return billions of dollars in proceeds to investors through stock repurchases and higher dividends. But, like Merck, it is holding on for now to its consumer healthcare unit.
Pfizer Chief Executive Ian Read said the industry's best hope is a crop of new drugs and vaccines now in clinical trials that could transform treatment for cancer, cardiovascular diseases and other ailments. Continued...