Did Pfizer’s 1Q16 Earnings Beat Analysts' Estimates?
Products and performance
Previously in this series, we discussed growth trends and growth contributors for Pfizer (PFE) in 1Q16. Now we’ll look at products that saw growth decline. The overall share of revenue for the Established Products segment decreased to 44.6% in 1Q16 from 48.8% for 1Q15, following the loss of exclusivity of two key products: Celebrex and Zyvox. The products that negatively affected revenue are discussed below.
Products with declining sales
Revenue was affected by lower sales of the following drugs:
- Enbrel, a drug for treatment of spondylitis, psoriasis, and arthritis, achieved sales of $733 million in 1Q16 for markets outside the United States and Canada. This was a decrease of ~3% as compared to $759 million in 1Q15.
- Celebrex, a nonsteroidal anti-inflammatory drug used to reduce pain and inflammation, reported a sales decline of more than 16% to $172 million in 1Q16 as compared to $205 million in 1Q15 following the loss of exclusivity in December 2014. Celebrex revenues have been constantly declining and have fallen by over 75% since the loss of exclusivity.
- Zyvox, an antibiotic, reported a sales drop of ~53% to $127 million in 1Q16 as compared to $271 million in 1Q15 following the loss of exclusivity in May 2015. Zyvox revenues have declined by over 60% in the last six quarters.
- Lipitor, a drug for reducing cholesterol and triglycerides in the blood, reported a sales decline of ~7% to $411 million in 1Q16 as compared to $441 million in 1Q15 following continuing generic competition in developed markets. However, this was partially offset by growth in emerging markets. Lipitor revenues have decreased in constant currency terms over the last year.
The revenues of a pharmaceutical company are largely affected by the loss of exclusivity of its key products. A few of the blockbuster drugs that lost their exclusivity in 2015 are Copaxone by Teva Pharmaceuticals (TEVA), Gleevac by Novartis (NVS), and Avodart by GlaxoSmithKline (GSK). The impact of these drugs will be reflected in 2016 sales figures. To diversify risk, you might consider investing in the iShares U.S. Pharmaceuticals ETF (IHE), which holds ~8.6% of its total assets in Pfizer.
In the next part of this series, we’ll look at Pfizer’s major product developments.
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