Expiring patents, surging dollar dog BMS, Pfizer, & Novartis earnings
- Pharma giants Pfizer, Bristol-Myers Squibb, and Novartis all reported Q4 2014 earnings on Tuesday and projected dampened earnings going into 2015.
- An eagle-eyed snapshot: Novartis' net income was down 27.7%, while Pfizer's net income was down 52.2% and BMS's was down 98.2%. The drug sales that were the biggest anchors on those three companies were, respectively, Lucentis (down 6.7%); Celebrex, and Lipitor (down 31.1% and 6.4%); and Abilify (down 25%).
- Big changes in currency rates, including a surging dollar, and patent expirations led the companies to forecast depressed 2015 earnings compared to industry expectations.
The biggest pharma companies are global players, and their finances are subject to global events. With an ever-stronger dollar, product sales are beginning to flag in markets outside of the United States as foreign buyers lose purchasing power.
Novartis CEO Joe Jimenez told Bloomberg that a rising franc and dollar would eat away as much as 12% of the company's core operating income in 2015. Then there's the issue of patent expiry for big-name products such as BMS's Abilify and Pfizer's flagship Celebrex and Lipitor therapies.