Pfizer's first-quarter earnings call on Tuesday was as much a debate about how to spend the proceeds from the company's nutrition business sell-off as it was about falling numbers. Executives parried questions about the wisdom of using the $11.9 billion from the Nestle sale for purchasing shares, talked up late-stage pipeline products that are coming before the FDA, and, as expected, ran the numbers.
Overall, quarterly results were sluggish, bringing in $15.5 billion for the company, a 7% drop compared to the same period last year. The fall-off highlighted the patent cliff, of which analysts and industry watchers are well aware. Worldwide Lipitor sales fell to $1.4 billion, a 42% drop vs. the same period last year. US sales of the cholesterol-fighting drug plummeted to $383 million, a 71% drop from the $1.3 billion in patent-protected sales for the same period the year before. Lipitor went generic in November, and Pfizer placed the blame for the 15% fall in US biopharmaceutical quarterly sales firmly on this patent loss.
Geodon was another generic sore point. The drug went generic in March, and worldwide sales were $181 million, a 22% decrease from the same period a year ago, while US Geodon sales fell 26%, to $143 million, compared to $194 million for the same period in 2011.
Specialty care drugs Enbrel, Lyrica and Celebrex saw sales increases during the quarter, but not enough to turn around the specialty category, whose sales tanked 9% compared with the same period last year.
Pipeline discussions focused on the May 9 review of Enbrel competitor tofacitinib and the August review of the heart drug Eliquis. Tofacitinib is being appraised at 5- and 10 mg doses.
President and General Manager of Specialty Care and Oncology Geno Germano said rheumatologists would benefit from having two doses available but said that if only one were approved, it would not be a "major deterrent" for using the drug.
In addition, the company said it plans to park the nearly $12 billion in proceeds from the sale of its nutrition business outside the US, for tax purposes, and to have the money—earmarked for share buy-backs—in hand by the first half of 2013.
The company referred to the buy-back as “the case to beat.” Bernstein analyst Tim Anderson said during the call that the buy-back was pure upside for shareholders, but questioned the long-term company impact. CEO Ian Read defended the strategy, saying Pfizer was open to purchasing another business if it was of real value, but added, “I think we are unlocking value for shareholders and hence unlocking value for Pfizer."
The company added that a separate plan to purchase $5 billion in shares this year is still on track, and that it's still mulling how to divest its animal health unit.