Pfizer's second-quarter sales fall 2 percent, missing estimates

Pfizer announced Tuesday that second-quarter sales declined 2 percent year-over-year to $12.9 billion, missing analyst expectations of $13.1 billion, partly due to lower revenue from Enbrel and Prevnar 13/Prevenar 13. Net income in the three-month period reached $3.1 billion, up from $2 billion in the prior-year quarter.

CEO Ian Read said "I am pleased with our second-quarter 2017 results and our year-to-date performance is in line with our expectations." For the full year, Pfizer indicated that earnings per share are now predicted to be between $2.54 and $2.60, with the lower end of the range lifted from $2.50 per share. The drugmaker added that annual sales are still forecast to between $52 billion and $54 billion.

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Quarterly sales in Pfizer's innovative health unit climbed 8 percent to $7.6 billion, with Read noting that the figure was "driven by the performance of our key growth drivers, notably Ibrance, Eliquis, Xeljanz and Xtandi." The company reported that revenue from Ibrance surged 66 percent year-over-year to $853 million, with sales of Eliquis jumping 50 percent to $605 million. Meanwhile, revenue from Xeljanz increased 55 percent to $336 million, with sales of Xtandi in the US reaching $141 million.

However, Pfizer said that three-monthly sales of Prevnar 13/Prevenar 13 declined 8 percent to $1.2 billion, with revenue from the vaccine falling 16 percent in the US to $645 million, as a result of "the unfavourable timing of government purchases for the paediatric indication and the continued decline in revenues for the adult indication." Meanwhile, sales of Enbrel, which Pfizer markets outside the US and Canada, slumped 20 percent to $617 million, hit by competition from biosimilar versions of the product.

The drugmaker reported that quarterly sales in its essential health unit slipped 14 percent to $5.2 billion. Pfizer noted that the decrease was partly a result of lower sales of Pristiq in the US, which plunged 97 percent to $5 million, after losing marketing exclusivity in March. Read remarked "while essential health revenues for the quarter declined…primarily due to continued headwinds from products that recently lost marketing exclusivity, we had solid operational growth in emerging markets and in biosimilars."

The chief executive also highlighted the company's drug pipeline, suggesting that "over the next five years, we project the potential for approximately 25 to 30 approvals, of which up to 15 have the potential to be blockbusters."

Commenting on the pipeline, Credit Suisse analyst Vamil Divan said what may concern investors is that it is a "ways off" from creating "major value." The analyst suggested that even if Pfizer is holding off on large-scale deals, small to mid-size transactions could boost its prospects. Meanwhile, Jefferies analyst Jeffrey Holford indicated that Bristol-Myers Squibb is "still the most likely target" for an acquisition by Pfizer.

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