Pfizer posts big jump in 4th-qtr sales, profit thanks to $68 billion Wyeth acquisition

Pfizer posts big jump in 4Q sales, profit

TRENTON, N.J. — Drugmaker Pfizer Inc., well into integrating its new Wyeth unit, posted a 34 percent jump in revenue Wednesday, but $3.2 billion in acquisition and restructuring charges and higher costs across the board weighed down profit.

The maker of Viagra and cholesterol fighter Lipitor, which paid $68 billion to get Wyeth’s vaccines, biologic drugs and consumer health staples such as Centrum vitamins and pain relievers Advil and Anacin, already has slashed about 4,200 jobs.

New York-based Pfizer said fourth-quarter revenue totaled $16.54 billion, $500 million above what analysts were expecting amid the lingering recession. Ten Pfizer drugs had double-digit sales jumps, and Lipitor, the world’s top-selling drug, saw sales hold steady at $3.2 billion despite pressure from generic versions of similar drugs, but generic competition continue to hurt blood pressure drug Norvasc.

Wyeth products contributed $3.3 billion; excluding them, revenue was up about 7 percent from the $12.35 billion Pfizer reported in 2008’s fourth quarter. Favorable exchange rates boosted total revenue by 4 percent.

Net income amounted to $767 million, nearly triple the $266 million the world’s biggest drugmaker earned a year earlier, when results were hurt by a whopping $2.3 billion charge to settle federal charges Pfizer marketed painkiller Bextra and other drugs for unapproved uses. That profit is equal to earnings per share of 10 cents, or 49 cents after excluding one-time items. Analysts were expecting 50 cents a share excluding items, on average.

Pfizer did not provide directly comparable figures on revenue, profit and costs for the 2009 and 2008 periods.

“Our long-term strategy of stabilization and, ultimately, growth, is on track,” Chief Executive Jeff Kindler told analysts on a conference call. Along with continued cost-cutting, “We will also make focused, disciplined investments where there is the prospect of reasonable growth,” such as emerging markets.

Shares of Pfizer fell 44 cents, or 2.3 percent, to close at $18.62 Wednesday.

The company forecast 2010 revenue of $67 billion to $69 billion, and earnings per share of $2.10 to $2.20, excluding items. Analysts expected revenue of $67.5 billion, but higher earnings per share, at $2.27. Pfizer said it recently reduced its 2010 forecast by 6 cents a share because the dollar has strengthened recently.

“This report was less than the Street was hoping for, and the guidance, though somewhat light, likely resets expectations to achievable, if not ambitious, levels,” analyst Les Funtleyder of Miller Tabak & Co. wrote to investors.

Pfizer lowered the 2012 forecast it gave when it announced plans to buy Wyeth — a crucial period because that’s when Lipitor sales will get slammed by generic competition. Pfizer expects sales of $66 billion to $68.5 billion, down from its earlier forecast of about $70 billion, and adjusted earnings per share around $2.30, down from $2.42. Pfizer blamed factors including shifting its HIV drug development into a joint venture and regulators requiring it to divest some of its animal health business.

Analyst Steve Brozak of WBB Securities praised Pfizer for spending significantly more on research and development for the quarter and all of 2009, and because drug revenue jumped 30 percent in the fourth quarter.

“That’s the growth you want to see,” Brozak said. “Who cares if the (forecast) numbers are off for a quarter or even a year?”

But Erik Gordon, a professor and analyst at University of Michigan’s Ross School of Business, said the results echo what’s come from other big U.S. drugmakers.

“They did the Big Pharma tightrope walk: cut operating costs (and) try to convince Wall Street that the cuts aren’t strangling the product development pipeline,” he said of Pfizer.

In the fourth quarter, sales of prescription drugs and vaccines hit $14.61 billion. Pfizer’s “diversified” division, which sells animal, consumer health and nutrition products, saw revenue jump 83 percent to $1.81 billion, mainly from adding Wyeth’s vitamins and other over-the-counter items.

Pfizer bought Wyeth on Oct. 15 in the most expensive of several big deals last year as the pharmaceutical industry consolidates to cut costs because of intensifying generic competition and a limited number of new blockbuster drugs.

The two companies had about 130,000 workers when the deal was announced a year ago. Each was then working on its own job-cutting program, and a total of more than 13,000 jobs have been cut so far.

For all of 2009, Pfizer reported net income of $8.64 billion, up 7 percent, and total revenue of $50 billion, up 4 percent.

Swiss drugmaker Roche Holding AG also saw a merger costs — $46.8 billion to take over biotech pioneer Genentech — weigh down profits. It reported a 22 percent drop in 2009 net income, to $8.06 billion (8.51 billion Swiss francs). Excluding one-time items, profits still would have been down 9 percent, which fell just short of analysts’ expectations.

However, sales at Basel-based Roche rose 8 percent to 49.05 billion francs, boosted by soaring sales of antiviral drug Tamiflu amid the swine flu pandemic, plus sales of Genentech’s cancer drugs Avastin and Rituxan.