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Pfizer's profit misses as vaccine sales lag, costs rise

A logo sits on the lab coat of a technician as he works at Neusentis Ltd.'s research laboratory, a unit of Pfizer Inc.
Chris Ratcliffe | Bloomberg | Getty Images
A logo sits on the lab coat of a technician as he works at Neusentis Ltd.'s research laboratory, a unit of Pfizer Inc.

Pfizer, which closed its $14 billion acquisition of Medivation in September, reported a lower-than-expected profit, hit by lower demand for its flagship vaccine Prevnar and higher expenses.

Shares of the largest U.S. drugmaker were down 1 percent at $31 in premarket trading on Tuesday.

Global Prevnar sales fell 23 percent to $1.42 billion, underwhelming consensus estimates, several analysts said.

The company attributed the persistent fall in Prevnar sales growth to a successful capture of the eligible adult population following the product's 2014 launch, and an unfavorable impact from the timing of government purchases for Prevnar's pediatric indication.

Pfizer earned an adjusted profit of 47 cents per share, missing the average analysts' estimate of 50 cents, according to Thomson Reuters I/B/E/S.

Prevnar was quite light this quarter, as were sales of Sutent and Inlyta, while SG&A was well above expectations and a key contributor to the EPS miss, Credit Suisse analysts said.

The company's revenue slipped 3 percent to $13.63 billion, due to a strong dollar and fewer selling days compared to the year-ago quarter, but was roughly in line with estimates.

Those lost days resulted in a negative impact on quarterly revenue by about $750 million compared to the prior-year quarter, Pfizer said.

Sales of its cancer drug Ibrance, rheumatoid arthritis treatment Xeljanz and sterile injectable products all beat expectations, Evercore ISI analysts said.

The company, which decided against splitting itself to separate its eroding legacy business from its array of patent-protected medicines in September, has taken a number of steps to streamline operations.

Pfizer agreed to sell its global infusion therapy business, which it acquired through its $15 billion purchase of Hospira in 2015, to ICU Medical for $1 billion the following month.

Reuters in November reported the company was evaluating a potential sale or spin-off of its consumer health division that could value the unit at as much as $14 billion.

Pfizer's recently approved and keenly anticipated eczema treatment Eucrisa, which it acquired through its $5.2 billion purchase of Anacor Pharmaceuticals, should be available by early February, the company said on Tuesday.

The company has estimated potential annual peak sales of about $2 billion for the drug.

Pfizer also forecast adjusted profit of $2.50-$2.60 per share on revenue of $52 billion to $54 billion for 2017. Analysts on average were expecting earnings of $2.56 per share and revenue of $54.03 billion.