Pfizer Inc, after acquisition of Wyeth, has posted lower net profit of US$ 2,026 million during the first quarter ended March 2010 as against US$ 2,729 million in the corresponding period of last year, a de-growth of 26 per cent mainly on account of accounting adjustments associated with the acquisition of Wyeth, higher net interest expenses and higher tax provision. Further, the company has to write-off of the deferred tax asset of approximately US$ 270 million related to the Medicare Part D subsidy for retiree prescription drug coverage resulting from changes in the recently enacted US healthcare legislation.
Its revenues, however, went up sharply by 54 per cent to US$ 16,750 million from US$ 10,867 million. With fall in profits, its earnings per share moved down to US$ 0.25 from US$ 0.40 in the last period. The acquisition of Wyeth was completed in October 2009 and Wyeth operations are reflected in the first quarter of 2010 results, but not in the same period of last year.
For the first quarter 2010, US revenues increased by 47 per cent to US$ 7,314 million from US$ 4,969 million in the last period. Sales of Lipitor in US declined by 10 per cent to US$ 1,310 million from US$ 1,452 million and that of Lyrica declined by 16 per cent in US to US$ 352 million from US$ 418 million. However, the worldwide sales of Lipitor improved by one per cent to US$ 2,757 million from US$ 2,721 million and that of Lyrica by 6 per cent to US$ 723 million from US$ 684 million in the corresponding period of last year. Pfizer's worldwide biopharmaceutical sales touched to US$ 14,506 million as against US$ 10,102 million, representing a growth of 44 per cent. Biopharmaceutical includes the primary care, specialty care, established products, emerging markets and oncology customer-focused units.
Jeff Kindler, chairman and CEO, said, “Our results this quarter demonstrate the ability of our colleagues to deliver solid operational performance in a challenging environment as well as to extract value for shareholders from the acquisition of Wyeth. During the quarter, many of our in-line products performed well, including key legacy Wyeth assets such as Enbrel, Effexor, the Prevnar/Prevenar franchise, and the Consumer Healthcare and Nutrition business. We are excited about our more diverse in-line product portfolio, including Prevnar/Prevenar 13 for infants and toddlers, which has been approved in more than 40 markets, and our expanded pipeline. We expect to receive phase three clinical results for numerous compounds in our pipeline during the remainder of 2010.”
Within the biopharmaceutical units, legacy Pfizer operational performance was impacted in the first-quarter 2010 compared to the year-ago quarter both by the loss of exclusivity of certain products and by the reclassification of certain revenues among the various units. The loss of exclusivity of Norvasac in Canada during July 2009 impacted revenues by 5 per cent
Its international revenues increased by 60 per cent to US$ 9,436 million from US$ 5,898 million. Its total biopharmaceutical sales improved by 46 per cent to US$ 7,899 million from US$ 5,393 million. Its US revenues represented 44 per cent of total revenues compared with 46 per cent in the year ago quarter, while international revenues represented 56 per cent of total revenues with 54 per cent in the year-ago quarter.
Pfizer's research and development expenses increased by 31 per cent to US$ 2,226 million during the first quarter ended March 2010 from US$ 1,705 million in the corresponding period of last year.
The company remains on-track to achieve the cost-reduction target of approximately US$ 4 to US$ 5 billion, by the end of 2012, at 2008 average foreign exchange rates. The workforce declined by 2,700 persons to around 1,13,800 persons from year ended 2009. Since the closing of the Wyeth acquisition on October 15, 2009, the workforce has declined by 6,900, primarily in the US primary care field force, manufacturing and research and development operations.
Frank D'Amelio, chief financial officer, stated, “After considering the performance of first-quarter 2010, the anticipated financial impact of the recently enacted US healthcare legislation of approximately US$ 300 million on revenues in 1010 as well as the strengthening of the US dollar, we are reaffirming our previous 2010 financial guidance. We are reducing our 2012 target revenue range by US$ 800 million due to the anticipated impact of that legislation.”