Pandemic hurts sales, profit for Pfizer amid restructuring
Pfizer Inc reported a 32 per cent plunge in second-quarter profit, mainly due to the coronavirus pandemic limiting the marketing of new prescriptions for its medicines.
Pfizer had predicted in April that the virus would keep both patients and company sales representatives away from doctors and hospitals. Still, the biggest United States drugmaker by revenue posted a solid profit and nudged up parts of its 2020 financial forecast and reaffirmed the rest.
The maker of the world’s top-selling vaccine, Prevnar 13, for preventing ear infections, pneumonia and related bacterial diseases, noted that the pandemic restricted doctor visits, prescriptions for new medicines and vaccination rates for many of its shots. However, it boosted sales of its medicines used to treat patients hospitalised with COVID-19.
Pfizer is among the drugmakers leading the race to develop a safe, effective vaccine against the coronavirus. It’s one of several drugmakers included in Operation Warp Speed, the US government’s effort to accelerate development of multiple vaccines.
Pfizer, the world’s biggest maker of injectable sterile medicines, late Monday announced the start of a late-stage trial of an experimental COVID-19 vaccine that it’s developing with German partner BioNTech. The US Food and Drug Administration, the FDA, approved the companies’ plan for the global trial, which will include up to 30,000 adult participants at about 120 sites in the United States and other countries.
The pandemic has infected nearly 16.5 million people worldwide and killed more than 650,000. Roughly one-quarter of those cases and deaths have occurred in the US, though experts say the true number of cases is much higher.
Amid the turmoil, Pfizer continues to remake itself, aiming to create a nimbler company focused on creating new drugs. Last summer, Pfizer divested its consumer health business into a joint venture with GlaxoSmithKline. That business had brought in US$862 million in the year-ago quarter.
Pfizer is now in the process of spinning out its Upjohn business, which sells older, mostly off-patent drugs, and combining it with generic drugmaker Mylan. The deal is now expected to close in the fourth quarter.
Revenue from Pfizer’s newer prescription drugs rose four per cent to US$9.8 billion in the quarter, led by breast cancer drug Ibrance, with US$1.35 billion in sales; and clot preventer Eliquis, which brought in US$1.27 billion. Prevnar 13 added US$1.12 billion in sales.
The Upjohn business saw sales plunge 32 per cent to US$2.01 billion, partly due to increasing generic competition in the US for its former blockbuster nerve pain drug Lyrica.
Overall, the New York company reported net income of US$3.43 billion, or 61 cents per share, down from US$5.55 billion, or 89 cents, a year earlier. Revenue fell 11 per cent to US$11.8 billion, down from US$13.26 billion in 2019’s second quarter, but managed to beat analysts’ forecasts of US$11.54 billion.
Adjusted income came to US$4.4 billion, or 78 cents per share, topping the 68 cents that analysts expected, according to FactSet.
The Viagra maker raised its 2020 earnings-per-share forecast by three cents, to a range of US$2.85 to US$2.95, and tweaked its full-year sales forecast, to a range of US$48.6 billion to US$50.6 billion, from its April forecast of US$48.5 billion to US$50.5 billion.
Given its divestment plans, Pfizer also updated its financial guidance for its remaining new-drug business, from US$40.8 billion of revenue for 2020 to US$42.4 billion, and earnings per share from US$2.28 to US$2.38.