Pfizer sales way off mark as company pursues AstraZeneca

Mon May 5, 2014 12:53pm EDT
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By Ransdell Pierson and Bill Berkrot

NEW YORK (Reuters) - Pfizer Inc (PFE.N: Quote) reported quarterly revenue well below Wall Street expectations on falling sales of key brands and generic drugs, underscoring its interest in pursuing a $106 billion bid for rival AstraZeneca (AZN.L: Quote) to promote new business growth.

Pfizer said on Monday it raised its bid last week in response to what it had heard from AstraZeneca shareholders and believed it to be a "compelling" offer.

AstraZeneca quickly rejected the sweetened bid, saying it "substantially" undervalued the company, and on Monday it declined to comment on Pfizer's substantial revenue shortfall in the first quarter.

"We are very disappointed with their unwillingness to engage in conversations," Pfizer Chief Executive Officer Ian Read said of AstraZeneca's management.

Pfizer said total first-quarter revenue fell 9 percent to $11.35 billion, which was $730 million below Wall Street expectations. Revenue would have fallen 6 percent, if not for the stronger dollar, which lowers the value of sales outside the United States.

Pfizer shares fell 2.6 percent to $29.95 in midday trading.

To assuage concerns about potential layoffs of researchers in Britain, Pfizer vowed that 20 percent of the research and development workforce of a combined company would remain in the U.K. That created fears that U.S. researchers would bear the brunt of expected job cuts, especially those at its oncology research center in La Jolla, California.

Read, on a conference call with analysts on Monday, said the company will maintain "a massive presence" of researchers in the United States, but did not provide specifics.   Continued...

The Pfizer logo is seen at their world headquarters in New York April 28, 2014. REUTERS/Andrew Kelly