Pfizer ready for a fight as biosimilar sales continue to lag
- The country’s largest pharma company reported third quarter revenues of $13.2 billion, essentially flat year-over-year, driven by newer products in its Innovative Health unit.
- Sales of products in the company’s Essential Health unit, which is comprised of largely older, off-patent products, "remain challenged," said CEO Ian Read. Revenues for the unit dropped 12% year-over-year to $5 billion.
- Pfizer narrowed the revenue guidance for 2017, dropping the upper end of its range down to new expectations of $52 billion to $53.1 billion. It also increased its earnings per share range to $2.58 to $2.62.
The company’s biosimilar Inflectra (infliximab-dyyb) continues to struggle, with Pfizer blaming Johnson & Johnson’s contracts with payers for Remicade (infliximab). Read said during a call with analysts on Tuesday morning that the company is exploring all avenues to increase access to Inflectra for patients. During the quarter, Pfizer filed suit against J&J, suggesting the rival drugmaker has conducted unfair marketing practices, as well as struck market-limiting contracts.
"We’re seeing uptake that supports our claim that U.S. patients are being denied access," said General Counsel Doug Lankler on the call. Another exec noted on the call with analysts that Inflectra is performing well in "closed systems" that are not affected by the contracts and rebates companies strike with payers.
"You shouldn’t be using contracting mechanisms to expand exclusivity when society is demanding that enough is enough," said Read in regards to the contracts J&J established, adding, "Europe is benefiting from biosimilars. Why can’t the U.S.?"
Inflectra only brought in $112 million worldwide for the quarter, while the reference product Remicade brought in revenues of $1.65 billion for J&J this past quarter.
Let’s make a deal?
But analysts and investors weren’t quite as concerned with biosimilar performance as they were with Pfizer's thoughts on M&A.
Most of the market has been speculating that Pfizer is waiting for tax reform or a cash repatriation holiday before it conducts any major deals.
But CFO Frank D’Amelio told analysts that "priorities don’t change," due to the status of repatriation. He said the company will continue to allocate cash in the same way it always, giving money back to shareholders through dividends, share buybacks, followed by investing in the business and M&A.
On the subject of M&A, both Read and D’Amelio noted that the 2009 acquisition of Wyeth for $68 billion was "value-enhancing" for the company, creating more than $4 billion in synergies. D’Amelio admitted that the majority of the company’s current pipeline can be traced back to Wyeth.
But the big pharma was still fairly mum on whether it will conduct any deals during the remaining two months of the year, noting it is agnostic on the size of the deal.
- Pfizer Earnings Statement
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