By Ransdell Pierson
Oct 29 (Reuters) - Pfizer Inc reportedbetter-than-expected third-quarter earnings on Tuesday, helpedby cuts in costs and growing sales of cancer medicines approvedover the past two years.
The largest U.S. drugmaker, whose shares rose 1.7 percent,earned $2.59 billion, or 39 cents per share. That compared with$3.21 billion, or 43 cents per share, in last year's quarter.
Excluding special charges of $572 million related torestructurings, asset writedowns and other costs, Pfizer earned58 cents per share. Analysts, on average, expected 56 cents pershare, according to Thomson Reuters I/B/E/S.
"I like the quarter; it was better than we expected, mainlyfrom cost cutting and a lower tax rate," said Herman Saftlas, ananalyst with S&P Capital Inc. The effective tax rate fell 0.4percent to 27.6 percent in the quarter.
Saftlas raised his 12-month share-price target on Pfizer to$35, from $33, saying the company will report data in comingmonths from trials of a number of promising experimental drugsand from studies testing new uses of its already marketed drugs.
"My feeling is they are making traction on their pipelineand if they get some good readouts from these trials, we couldsee Pfizer shares go higher," Saftlas said.
The bright spot in Pfizer's earnings report was sales of itsoncology drugs, which jumped 24 percent to $407 million.
Oncology has become one of Pfizer's biggest priorities, withthe introductions of Xalkori for lung cancer in 2011, Inlyta forkidney cancer in 2012 and Bosulif this year for chronicmyelogenous leukemia.
Pfizer is counting on them to become lucrative products, andis developing other cancer medicines with possibly far biggersales potential. They include an experimental treatment foradvanced breast cancer, called palbociclib, which industryanalysts consider a potential blockbuster.
Xalkori sales almost doubled to $73 million in the quarter,while Inlyta sales nearly tripled to $83 million.
The company is also focusing on new drugs for a variety ofchronic diseases. It said on Tuesday it had begun late-stagetrials of bococizumab, a drug to reduce "bad" LDL cholesterol byblocking a protein called PCSK9. Amgen Inc and apartnership of Regeneron Inc and Sanofi areconducting late-stage trials of similar injectable drugs, whichanalysts believe could become big sellers.
In mid-stage trials, the Regeneron and Amgen drugs slashedLDL cholesterol more than 60 percent in patients already takingstatin drugs, such as Pfizer's Lipitor.
"It's a very competitive segment and we're in it to becompetitive," Pfizer Chief Executive Officer Ian Read said in aninterview.
Pfizer said it is working with Eli Lilly and Co tocomplete development of a new type of drug for osteoarthritisand back pain, called tanezumab, whose trials have been haltedseveral times by regulators over safety concerns. It works byblocking a protein called Nerve Growth Factor.
Read said tanezumab could be an attractive alternative toopioids and to standard pain drugs that can cause bleeding andulcers. He said a new category of pain drag was "desperatelyneeded."
Global company sales fell 2 percent to $12.64 billion, hurtby generic competition for cholesterol fighter Lipitor and othermedicines. Wall Street had expected $12.7 billion. Sales wouldhave been flat if not for the stronger dollar, which lowers thevalue of sales outside the United States.
Sales of Pfizer's biggest product, Lyrica for nerve pain,rose 10 percent to $1.14 billion. Prevnar, a vaccine againstpneumococcal bacteria that can cause pneumonia and otherinfections, grew 1 percent to $959 million, a moderateturnaround from a 3 percent decline in the prior quarter.
But sales of Lipitor, which lost U.S. patent protection inlate 2011, fell 29 percent to $533 million, as the drug facedgenerics in more overseas markets. But its sales topped WallStreet expectations by almost $55 million, Jefferies analystJeffrey Holford said in a research note.
Pfizer forecast full-year 2013 earnings of $2.15 to $2.20per share, excluding special items, from its earlier view of$2.10 to $2.20 per share.
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