Pfizer Inc., has received setback during the first quarter ended March 2007 and its net earnings declined by 16 per cent to $ 3,361 million from $ 4006 million in the corresponding period of lat year. Its revenue, however, increased by 6 per cent to $12.5 billion from $ 11.7 billion in the last period. The fall in net earnings put pressure on earning per share which nosedived to $0.48 from $ 0.56.mainly due to restructuring costs in this quarter as well as a one-time tax benefit recorded in the first quarter of 2006.
Revenue growth reflects a solid performance from both new and in-line products and was achieved in spite of US revenue reductions for products that recently lost US exclusivity, Norvasc (down $115 million), Zoloft (down $615 million), and Zithromax (down $112 million). Growth was favourably impacted by $269 million, or two percentage points, by foreign exchange. Revenues also benefited from about $145 million in lower rebates in both our government and non-government contracted businesses in the US, reflecting the continued impact of the Medicare Modernization Act, changes in product mix, and the impact of our contracting strategies.
Worldwide pharmaceutical revenues grew 5 percent in the first quarter of 2007 and reached $11.6 billion. The revenue performance in the first quarter of 2007 was driven by solid growth from several of our core products, including Lipitor (up 8 per cent), Celebrex (up 22 per cent), Lyrica (up 106 per cent), Geodon (up 18 per cent), Caduet (up 89 per cent), Detrol (up 17 per cent), Zyvox (up 39 per cent), Vfend (up 26 per cent), Viagra (up 11 per cent), Zyrtec (up 10 per cent), and Aromasin (up 33 per cent), as well as strong revenues for two key new products- Chantix/Champix and Sutent. In the U.S., pharmaceutical revenues of $6.5 billion represented 2-percent growth.
Worldwide sales of Lipitor totalled $3.4 billion for the first quarter of 2007 and represented growth of 8 percent. Lipitor sales in the first quarter benefited primarily from price increases, lower rebates, strong US statin market growth, and the favourable impact of foreign exchange-all of which more than offset a decline in US Lipitor prescriptions.
"We had a good quarter, with adjusted income1 driven by a number of factors: growth in our key in-line and new medicines, the favourable impact of foreign exchange, lower sales rebates, and relatively flat operating expenses compared to the year-ago period," said Jeffrey Kindler, chairman and chief executive officer. "We posted sales increases for Lipitor and Celebrex, and we were particularly pleased by the continuing strong performances of Chantix for smoking cessation, Sutent for advanced kidney cancer and stomach cancer, and Lyrica for the treatment of diabetic peripheral neuropathy and post-herpetic neuralgia, two of the most common types of neuropathic pain, and epilepsy. The low level of expense growth in the quarter reflected both the early benefits of our cost-cutting programs and the timing of investments in R&D and promotional programs this year.
"We are especially encouraged by the performance our Pfizer colleagues delivered, given that we also initiated significant organizational and cultural changes this quarter to enhance our performance and our return to shareholders in the future. Among other things in the quarter, we completed a significant reduction and redeployment of the US field force and began the elimination of large numbers of positions in other parts of the company. We also announced the intention to close five manufacturing and five research and development sites. We are making solid progress on the five priorities we announced in January 2007, while continuing an intense focus on near-term results."
"I am very pleased with our progress to date on our five immediate priorities," Kindler continued. "And with regard to our near-term performance, apart from the impact of losing US exclusivity for Norvasc six months earlier than expected and the uncertainty created by a recent adverse lower court decision regarding Lipitor patent protection in Canada, Pfizer's projected overall performance for 2007 and 2008 remains on track.
"In the US, an appellate court decision that was counter to three previous trial court rulings in Pfizer's favour led to the loss of exclusivity for Norvasc in the first quarter of 2007. As a result of this decision, we now expect that 2007 revenues will be reduced by $1.2 billion, an impact that we expect to be partially offset by greater favourability in foreign exchange (at current rates) than our previous forecast in January 2007. On balance, the rest of our business remains on track, with a normal range of variability in the performances of key inline and new products. At current exchange rates, we now forecast 2007 revenues of $47 billion to $48 billion, 2007 reported diluted EPS of $1.30 to $1.41, and 2007 adjusted diluted EPS1 of $2.08 to $2.15.
"For 2008, our projected overall performance also remains on track, subject to the residual effect of the US Norvasc patent decision and uncertainty regarding Lipitor's patent protection in Canada as a result of a recent unfavourable decision by a lower court. We have appealed the Canadian decision, which we believe was wrongly decided. The impact of these patent-litigation-related events, partially offset by greater favourability in foreign exchange, combined with the normal range of variability in the performance of our products result in a forecast of full-year 2008 revenues of $46.5 billion to $48.5 billion, at current exchange rates. Our financial guidance for full-year 2008 reported diluted EPS and adjusted diluted EPS1 remains unchanged.