Thursday 21 September 2017

Q2 earnings for Pfizer meet expected forecasts as pharma firm structure is reviewed

Pfizer is expanding two sites in Ireland
Pfizer is expanding two sites in Ireland

Pfizer Inc reported second-quarter earnings slightly ahead of forecasts on Tuesday as the largest US drugmaker lines up a business split that could lead to the spin-off of its generics division.

The company reaffirmed its financial outlook for the year.

One of the first pharmaceutical companies to locate in Ireland, Pfizer has over 4,000 colleagues across 8 locations based in Cork, Dublin and Kildare.

For the second quarter, Pfizer's adjusted income fell 10pc to $4bn, or 56 cents a share, from $4.45bn, or 59 cents a share, a year earlier. Revenue fell 7pc to $12.97bn.

Analysts, on average, were expecting second-quarter income of 55 cents a share, on revenue of $13.01bn, according to Thomson Reuters I/B/E/S.

Pfizer, whose CEO Ian Read has been reviewing the group's structure after divesting its nutrition and animal health businesses, said yesterday it planned to separate its commercial operations into two units for branded products and a third for generics.

Read said Pfizer's new model would help revitalize its innovation-based core drugs business, while enhancing the value of consumer and off-patent established brands, and maximizing the use of capital.

Pfizer's generics business, which represents 17pc of total sales, has far lower profit margins than its patent-protected drugs.

Many analysts have urged Pfizer to spin off its generics business so it can focus on its core branded pharmaceuticals business, although any spin-off of a company division is unlikely before 2016.

Within the core drugs division, revenues from cancer medicines increased by 28pc in the second quarter, helped by new products like Inlyta and Xalkori.

Read also said he expected business in emerging markets to accelerate in the second half of the year, led by China.

"From a total company view, we are tracking to our expectations for the full year and continue to capitalize on the investments we are making to better position Pfizer for long-term success," he added.

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