Pfizer's Q4 sales boosted by Eliquis, Ibrance, Xeljanz; full-year forecast misses estimates

Headline results for the fourth quarter:

Innovative health unit

$8.9 billion

+8%

Essential health unit

$5.1 billion

-7%

Revenue

$14 billion (forecasts of $13.9 billion)

+2%

Loss

$394 million

Profit of $12.3 billion

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

CEO Albert Bourla commented "2018 was highlighted by solid financial performance, shareholder-friendly capital allocation, the strengthening of our pipeline and the formation of our new commercial structure designed to transition the company to a period post-2020 where we expect a higher and more sustained revenue growth profile."

Bourla assumed the role of chief executive at the start of this year following the departure of former CEO Ian Read.

Other results:

  • Prevnar 13/Prevenar 13: $1.5 billion, down 1 percent
  • Lyrica: $1.2 billion, up 8 percent
  • Ibrance: $1.1 billion, up 58 percent
  • Eliquis alliance revenue and direct sales: $910 million, up 28 percent
  • Xeljanz: $553 million, up 35 percent
  • Enbrel (outside the US and Canada): $524 million, down 17 percent
  • Biosimilar product sales: $211 million, up 28 percent
  • Xtandi alliance revenue: $189 million, up 12 percent
  • Full-year revenue: $53.6 billion, up 2 percent, in line with the company's forecast from last October
  • Full-year profit: $11.2 billion, down 48 percent

Looking ahead:

Pfizer expects sales of between $52 billion and $54 billion this year, with earnings per share in the range of $2.82 to $2.92. Analysts predict sales of $54.3 billion in 2019 on earnings of $3.04 per share.

Chief financial officer Frank D'Amelio noted that the "guidance anticipates continued strong growth from key product franchises, including Ibrance, Eliquis, Xeljanz and Xtandi, as well as the expected loss of exclusivity of Lyrica in the US in June." D'Amelio added that the forecast assumes "an anticipated $2.6-billion revenue headwind due to products that have recently lost or are expected to soon lose marketing exclusivity."

What analysts said:

Bloomberg Intelligence analyst Sam Fazeli noted that Bourla "faces a major challenge, with very anaemic 2018-2022 sales growth, so new drugs must positively surprise to exceed this." Fazeli pointed out that "most of its line extensions, such as cancer drug Bavencio, have formidable competition from arguably better products."

However, Cantor Fitzgerald analyst Louise Chen expressed confidence in Pfizer despite its lower than expected 2019 guidance, noting the company "expects 2019 to be a year with important clinical data readouts across its pipeline."

Pipeline update:

Bourla said that in the near term, Pfizer expects to report pivotal top-line results for tanezumab in chronic lower back pain, "as well as additional data in osteoarthritis following Tuesday's announcement of a second positive Phase III trial." Later in the year, he said the company plans to unveil pivotal results for rivipansel in vaso-occlusive crisis from sickle cell disease, as well as data from the first Phase III trials for the JAK1 inhibitor abrocitinib, which is in development for moderate-to-severe atopic dermatitis.

Pfizer also disclosed that it discontinued three late-stage studies of its anti-PD-L1 antibody Bavencio, including in first-line ovarian cancer and platinum-resistant/refractory ovarian cancer. The company also ended a study in second-line non-small-cell lung cancer, with the move following a similar termination last year of the JAVELIN Ovarian 100 study of Bavencio in treatment-naïve patients with locally advanced or metastatic epithelial ovarian, fallopian tube or primary peritoneal cancer.

For related analysis, see Key takeaways from Pfizer's Q4 earnings and investor call.

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