Pfizer Inc, has suffered heavy setback during the fourth quarter ended December 2014 on account of loss of exclusivity for Celebrex in the US, the expiration of the co-promotion term of the collaboration agreement for Enbrel in the US and Canada and the termination of the Spiriva collaboration in certain countries. The company's net earnings declined sharply by 52.2 per cent to $1,228 million from $2,568 million in the similar quarter of last year. Its revenues declined by 3.7 per cent to $13.1 billion from $13.6 billion. With lower net profit, its EPS declined to $0.20 from $0.41 in the last period.
Pfizer began managing its commercial operations throug a new global commercial structure consisting of two distinct business; an innovative products business and an established products business. The innovative products business is composed of two operating segment; the global innovative pharmaceutical segment (GIP) and the Global Vaccines, Oncology and Consumer healthcare segment (VOC). The established products business consists of the global established pharmaceutical segment. (GEP).
The sales of GEP segment declined by 10.5 per cent to $6.4 billion during the fourth quarter ended December 2014 from $7.2 billion in the corresponding period of last year. The sales of global vaccines business increased by 18 per cent to $1.3 billion from $1.1 billion and that of GIP moved up by 3 per cent to $3.7 billion from $3.6 billion. The sales of global oncology went up by 10 per cent to $609 million from $556 million. R&D expenditure increased by 14 per cent to $2.0 billion from $1.8 billion.
Its sales in US declined marginally to $5,050 million from $5,084 million in the same quarter of last year. Its international sales declined by 4.8 per cent to $8,068 million from $8,474 million. Its sales in emerging markets increased to $3,105 million from $3,030 million.
Ian Read, chairman and CEO said, “During 2014, despite significant continued revenue headwinds from product losses of exclusivity and co-promote expiries, we were able to deliver modest adjusted diluted EPS growth. This was achieved through a combination of incremental revenue generation from key inline products and recent product launches, responsible expense management as well as supportive capital allocation.”
“We continued to focus on strengthening our innovative core and have made notable progress in this area through both internal advancements and strategic business development. As we look forward to 2015, we expect continued momentum with our pipeline, notably the potential US approval of Ibrance (palbociclib) for advanced breast cancer, as well as anticipated strong growth in emerging markets and from our recent product launches in developed markets, including Eliquis, Xeljanz, Prevnar 13 and Nexium 24HR. We are not in a position to commence over 20 registrational studies durig the coming four years with candidates that are based upon strong science and target indications that have significant unmet need.”
For the full year ended December 2014, Pfizer's net profit declined 58.5 per cent to $9.1 billion from $22.0 billion in the previous year. The company sold its Animal Division in the previous year and shown gain of $10.7 billion. Its net profit before this adjustment declined by 20 per cent to $9.1 billion from $11.4 billion. Its revenues for full year declined by 3.9 per cent to $49.6 billion from $51.6 billion. Its EPS declined to $1.43 from $1.67 in the last year.
Pfizer's R&D expenditure increased by 26 per cent to $8.4 billion from $6.7 billion. However, its selling, informatinoal and administrative expenses declined marginally to $14.1 billion from $14.4 billion in the last year. Provision for taxation lower to $3.1 billion from $4.3 billion.
Its revenues from GEP segment declined by 8.9 per cent to $25.1 billion from $27.6 billion and that of GIP declined by 3.2 per cent to $13.9 billion from $14.3 billion. The sales of VOC segment went up 9.3 per cent to $10.1 billion from $9.3 billion.
Pfizer's revenues in US declined by 5.9 per cent to $19.0 billion from $20.3 billion in the previous year and that in international market declined by 2.6 per cent to $30.5 billion from $31.3 billion. Its sales in developed Europe remained almost stagnant at $11.7 billion. Emerging market notched up small growth in revenues of 2 per cent to $11.5 billion as against $11.2 billion. Its sales in developed rest of world declined by 12 per cent to $7.3 billion from $8.3 billion.
The sales of Lyrica improved by 12 per cent to $5.2 billion from $4.6 billion and that of Prevnar family went up by 12 per cent to $4.5 billion from $4 billion in the previous year. Similarly, sales of of Enbrel (outside the US and Canada) went up marginally to $3.9 billion from $3.8 billion. The sales of other blockbuster product like Celebrex, Lipitor, Viagra, Zyvox, Sutent, Norvasc and Premarin family declined between one per cent to 11 per cent during 2014.
Frank D'Amelio, CFO, said, “our 2015 financial guidance, including ranges for reported revenues of $44.5 billion to $46.5 billion and for adjusted diluted EPS of $2 to $2.1. Our guidance for reported revenues reflects the anticipated negative impact of $3.5 billion due to recent and expected product losses of exclusivity as well as $2.8 billion as a result of recent adverse changes in essentially all foreign exchange rates relative to the US dollar.”