Pfizer results show an astounding loss in Lipitor sales

Despite generic competition, the pharmaceutical giant beat Wall Street estimates, yet trimmed 2012 forecast.

By Melly Alazraki Jan 31, 2012 3:06PM

Corbis Pfizer (PFE), the world's largest drugmaker, reported better-than-expected results Tuesday despite the significant hit it took from generic Lipitor competition. The company's cost-cutting efforts and strong sales by its non-pharmaceutical units helped offset the declining sales of its bestselling cholesterol drug. But Pfizer also lowered its 2012 outlook, blaming currency issues.


Pfizer shares were down 1.5% at midday as investors digested the magnitude of the loss of Lipitor exclusivity.

Lipitor, which at its prime had annual sales of more than $10 billion, lost patent protection on Nov. 30, causing a significant drop in Pfizer's revenue. Losses of exclusivity in general cost the company $5 billion, CEO Ian Read said.


The Lipitor losses, plus a one-time charge, caused the pharmaceutical giant's fourth-quarter profit to fall by half. Net income was $1.44 billion, or 19 cents per share, down from $2.89 billion, or 36 cents per share, the prior year.

Excluding one-time items, adjusted income was $3.86 billion, or 50 cents a share, up from $3.74 billion, or 47 cents a share, a year earlier. Analysts expected Pfizer to earn 47 cents a share. Similarly, despite the 3.5% drop in revenue to $16.7 billion, Pfizer also topped the expected $16.61 billion in revenues. 


But while the company managed to beat estimates, it also significantly trimmed its 2012 forecast, blaming the strengthening of the dollar. The new forecast is below Wall Street estimates, according to Reuters.

What's next?


The effect of the loss of exclusivity on Lipitor is staggering. With only one month left in the quarter after the patent expired, Lipitor sales still fell 42% in the U.S. and 24% worldwide.


It seems that all of its deals, such as the one with Watson Pharmaceutical (WPI), as well as incentives to insurance companies and patients, were of little help to stem the tide of generic Lipitor. That will only get worse as more generics are allowed to enter the market and prices drop even further. Already last week Bloomberg and The Wall Street Journal reported that Pfizer's efforts are not bearing the expected fruit and its market share keeps declining.

Pfizer has long talked about several moves it was going to take to handle the expected loss of sales, including cost-cutting through layoffs. The company reduced costs by 9% in the quarter, but this was far from enough.

Pfizer also talked about refocusing on its prescription drug division by selling non-pharma units, specifically animal health and nutrition (mostly baby formula). But what's interesting is that these two divisions helped the company offset declines in its prescription drugs as their revenues grew. Animal health unit sales increased by 13% and nutrition revenue was up by 22%.

In the meantime, Pfizer awaits several drug approvals, such as for anti-clot drug Eliquis. And just Friday, Pfizer's Inlyta drug for patients with advanced kidney cancer was approved. Already, several other drugs have picked up some of the Lipitor slack. Sales of pain drug Lyrica increased 22% to just under $1 billion. Sales of arthritis treatment Enbrel and the Celebrex painkiller rose 7% each, to $925 million and $667 million, respectively, while sales of impotence treatment Viagra were up 5%. Also, sales of vaccine Prevnar 13 rose 1%.

Whether these moves and improvements are enough to offset the lost Lipitor sales is yet to be seen. Pfizer can also always look to boost its offerings with certain biotechs. Let's not forget, also, that for some investors, the yield of more than 4% is very attractive.


Since Nov. 30, the day Pfizer lost patent protection on Lipitor, the stock actually climbed 10%, and it gained about 24% last year. Unless investors were completely unprepared, the Lipitor issues should be finally fully priced in by now. For investors with a long-term horizon, Pfizer can certainly offer stability and income.


Melly Alazraki is a freelance financial writer who frequently covers the pharmaceutical industry.

Tags: PFE
23Comments
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Pfizer has made deals to stop many insurance plans from covering the generic.   Instead these plans will cover only Lipitor and charge patients lower co pays, which sounds like a great deal.

 

But for people on Medicare Part D, there's a catch.  These patients will reach their maximum of drug cost for the year, $2,930 for 2012 sooner.  What that means is they'll be in the donut hole faster.  Because only the higher cost drug counts toward the limit. This will continue thru May 31st, when more drug makers will be able to market the generic version and competition will increase.

 

When more blockbuster drugs come off patent in 2012 it's likely to be copied by others.

Feb 1, 2012 1:00AM
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I have spent 10 years with painful peripheral neuropathy caused by Lipitor. No cure and only very little relief using pain med's. Very little sleep. 

 

Many people are suffering from these statins. Causes muscle cramps, TIA's, Dementia. I wish people would research because the doctors are not going to agree that your symptoms are from statins.

Jan 31, 2012 11:19PM
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I am still hurting from this drug.  I will let anyone know this. I had to take an early retirement. If I had the money to sue I would.
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 In the latest  AARP Bulletin January-February issue, page 4.
Feb 1, 2012 1:07AM
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Oh and I forgot, they knew of all the pain they were causing so they created Lyrica. Wasn't that nice of them?. Lot's of us made reports to the FDA but do you think they cared? NOPE
Feb 1, 2012 10:24AM
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The generic version just became available to us (KS) last month and we are forced to use it by our insurance carrier.

To those who have suffered side effects, maybe your doctor needs to be replaced.  My doctor reviewed all the side effects with me, detailing what signs to look for, to make sure I didn't have any bad reactions.  That was 17 years ago, and still no adverse effects.

Jan 31, 2012 11:55PM
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I wonder if they would make a profit if they had to pay for the people that HURT with their drugs.

 

But I am not sure who is really to blame,  the company or the doctors that turn their heads the other way.

 

It cost me time, money and PAIN,  and was at the point of being cut to see if I could fix the pain.

And the doctors were willing to cut.

Jan 31, 2012 11:16PM
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sure feel bad if drug companies loose money, oh what will they do
Feb 1, 2012 9:56AM
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This will be my 9th year of lower lumbar severe back pain because of Lipitor. It caused muscle cell deterioration and herniated a disk. Stay off of this 'statin' medication if at all possible.
Feb 1, 2012 11:21AM
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All I know is that my co-pay remains un-changed.Ichecked with my pharmacist and he said its because Pfizer has some agreement with the people that make the generic version.
Feb 1, 2012 12:47PM
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Isn't it illegal for Pfizer to have a price agreement with companies who produce the generic?
Feb 1, 2012 11:27AM
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Stay away from Pfizer have you noticed some Doctors only give Medications from Pfizer when others give Medications from other Drug Companies, That's because they get rewarded for doing so like free paid Vacations Etc.

 

 Lipitor is a Statin so stay away have you read about the Lawsuits against Statins such as Simvastin it causes a rare Muscle Disease which also affects the Kidneys.

Pfizer is Greedy Giant they have paid TransTech Pharma Inc out of High Point NC 1.1 Billion for rights to a Drug known as TTP054 Which is for Diabetes the reason for the name TTP054 is because it is in the Clinical Stages they have tried it on Mice and now using Humans as guinea pigs but they are not telling Study Participants that it has been known to cause Blindness in Mice and Rats.

 

Pfizer was the maker of an antibiotic tetracycline if given to kids it will cause permanent damage to the Teeth in which it causes the Teeth to be stained Gray for life.

Use to Pfizer did not warn the FDA or Doctors about this Side Effect they do so now. But I contacted Pfizer to ask them to compensate the people who had there Teeth Damaged by there product which is a Liability all I was asking is that they pay to fix the Teeth.

 

Of course the Greedy Pfizer said no my doctor  gave me Liptor after I found out it was a Statin and that the Maker was Pfizer I Flushed them.

Never will I take a Drug with Pfizers name on it. I would ask all people to do the same.

 

Feb 1, 2012 3:59PM
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Pfizer cost me my job, 8 years down the drain working for Wyeth in Cambridge. Pfizer bought Wyeth for 68 billion to offset the loss of profits with lipitor then axed everyone at Wyeth basically and just wanted  Wyeth's drugs. The kicker is us tax payers at Wyeth bailed out the banks that gave Pfizer the money to buy Wyeth and make us unemployed. What a country and with the next President seeming to be either Obama again or Mitt the twitt I don't see us moving in the right direction anytime soon! Yes the CEO's of Wyeth got millions in the deal, yes millions.
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Pfizer..You can bet they continue to squeeze as much profit from lipitor as possible. I was taken in by their ads to apply for a so called 4 dollar co pay card.  It's a scam...read the fine print...you can only get the four dollar co pay card...if you are currently paying LESS THAN  54 dollars for your 30 day prescription!  Who's paying that little? They"re trying to keep pharmacists and patients buying the name brand. I continue to get the generic from canada and pay a least one third what you have to pay at walmart or elsewhere in the us.
Feb 1, 2012 11:30AM
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Isn't spam suppose to be blocked?  I can't even type the name of a certain dating website without msn flagging me for spam.  How is it that they get to post? 
Feb 1, 2012 5:11PM
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Each pharmacist gives a drug sheet listing all possible side effects for every drug filled.  Learn to read and talk to your doctor.  Undoubtedly none of you have ever had a stroke.  Let me tell you its no fun.  I have taken 80 mg of Lipitor each day for over six years and have never had a problem.  Why, because I talked with my doctor.  Pfizer is no different from other drug companies.  They are out to make a profit.  No one forced you to take this medication.
Feb 1, 2012 2:05PM
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 I take Lipitor, but because my Insurance won't cover the original, I have to take the Generic as a lot of other people do.  It's ALL about the MONEY.  CEO's get more & more & we the people suffer!

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it makes ya think; they lose patent protection on their biggest selling drug which apparently has some serious adverse effects according to the people who have responded to this article and the stock price goes up nearly 25%
hmmmmm......maybe its time to re-introduce torcetrapib?
Feb 1, 2012 12:55PM
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"Isn't spam suppose to be blocked?  I can't even type the name of a certain dating website without msn flagging me for spam.  How is it that they get to post? "

 

I suspect MSN has an arrangement with that site.  I've flagged their posts so many times, that I've lost count.

Jan 31, 2012 5:52PM
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I did not realize Part D Medicare had any maximum limit. Where can this be found?
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