Pfizer revenues surge as vaccines, new drugs rack up sales
- Pfizer reported strong revenue and profit growth in the first quarter as its pneumonia vaccine and several new drugs buoyed sales. Including the effect of acquiring Hospira in September of last year, revenue increased by 20% to $13 billion while net income checked in at $3.01 billion.
- The unexpectedly sturdy earnings numbers led Pfizer to upgrade its guidance for 2016 sales to between $51 and $53 billion, up from $49 to $51 billion. In the wake of the failed mega-merger with Allergan, CEO Ian Read said the company is in the market for acquiring late-stage assets, reports Bloomberg.
- Booming sales of Pfizer's pneumonia vaccines (led by Prevnar 13) further cemented the drugs' status as the top-earner.
Even excluding the impact of the Hospira acquisition, Pfizer revenue grew by 9% compared to a year prior. Overall, the success of several new drugs helped overcome flat or slowly declining sales among mainstay Pfizer drugs like Lipitor and Viagra.
The new breast cancer drug Ibrance took off in the first quarter, notching sales of $429 billion - a sequential increase from Q4 and continuing its rapid growth following a launch in Q1 last year. In February, the FDA approved an expanded indication for the use of Ibrance to treat HER2-metastic breast cancer.
Pain drug Lyrica also had higher sales, particularly outside of Europe and Central Asia.
“Pfizer’s strong organic revenue growth of 15% is exceeding our expectations, with good performance across products and business lines,” said Michael Levesque, senior vice president at the credit rating company Moody’s. (The 15% figure strips out certain factors, such as currency exchange)
Earnings received a boost from the additional five selling days in the first quarter of 2016, compared to 2015. This favorably impacted revenues by $900 million, although this will be offset in the fourth quarter.
With a Pfizer-Allergan tie-up now dead, Pfizer plans to decide whether to break up the company by the end of 2017, Bloomberg reports. The company currently separates its business into "innovative" and "established" units and a separation of the two could have tax advantages.
Lowering its corporate tax rate was one of the primary objectives for pursuing a merger with Allergan, which is headquartered in Ireland.
CEO Read also said Pfizer expects to see savings of $1 billion by 2018 from integrating Hospira, a higher amount than the company originally targeted.
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