Earnings Preview: Pfizer to tout new drugs, deals

AP News
Posted: Oct 29, 2010 7:12 PM
Earnings Preview: Pfizer to tout new drugs, deals

Pfizer Inc., the world's biggest drug maker by revenue, should focus on some recent deals, new research data and its integration of Wyeth, which it bought a year ago, when it reports its third-quarter results before the stock market opens Tuesday.

WHAT TO WATCH FOR: Pfizer executives likely will discuss some promising research results just released or about to come out.

That includes data on crizotinib for nonsmall-cell lung cancer, which comprises about 85 percent of lung cancers, in nonsmokers. The drug targets about 4 percent of those patients, who have a certain genetic variation. Results of a small study, reported in the New England Journal of Medicine this week, stated more than half the patients had some response. An accompanying editorial said the drug also shows promise as a possible treatment for some other cancers and appears less toxic than most chemotherapy. It's already in late-stage testing.

The first of six late-stage studies of pain drug tasocitinib are to be presented at a conference in early November. Pfizer expects to apply for U.S. approval of apixaban, a drug to prevent strokes that Pfizer is developing with Bristol-Myers Squibb Co., at the end in the first quarter of 2011.

Pfizer bought rival drugmaker Wyeth last October, and executives will give an update on their progress in reducing costs by $4 billion to $5 billion per year. The $68 billion deal, Pfizer's third megamerger in a decade, secured its position at the top of the industry.

Executives will discuss a flurry of deals this month, particularly its ongoing tender offer to buy King Pharmaceuticals Inc. for $3.6 billion. Along with abuse-resistant pain drugs made by King, the deal gives Pfizer EpiPen, a pre-filled injection for quickly treating serious allergic reactions, and three other products.

Also in October, Pfizer said it will pay about $240 million to enter a partnership with a Brazilian drugmaker, Laboratorio Teuto Brasileiro S.A., to develop and sell generic drugs in that growing market. And Pfizer agreed to pay an initial $200 million to the Indian biotechnology company Biocon Ltd. for the right to sell several of its insulin products for diabetics.

Analysts may ask about the impact of generic competition to Pfizer's blockbuster antidepressant Effexor XR, which began in July. Effexor had annual U.S. sales of around $2.75 billion.

They may also bring up the latest probe of Pfizer's marketing practices. Barely a year after agreeing to pay a record-breaking $2.3 billion in fines for illegal drug promotions that plied doctors with free golf and resort junkets, the Justice Department has joined a new whistleblower lawsuit against Pfizer. This one accuses Pfizer's Wyeth unit of promoting the off-label use of a transplant drug, Rapamune, in high-risk patients.

WHY IT MATTERS: As the top drugmaker and now one of the most diversified ones, investors will be looking to see how well Pfizer is expanding sales in emerging markets, handling pricing pressures from U.S. and European government health programs, dealing with generic competition and advancing experimental drugs needed to replace revenues as drugs go off patent. Its cholesterol fighter Lipitor, the world's top seller with about $13 billion in sales last year, loses patent protection late next year.

WHAT'S EXPECTED: Analysts surveyed by Thomson Reuters are expecting, on average, earnings per share of 51 cents and revenue of $16.68 billion.

LAST YEAR'S QUARTER: A year ago, before Pfizer acquired Wyeth's prescription, animal and consumer health products, it posted earnings per share of 43 cents and sales of $11.62 billion.

(This version CORRECTS fourth paragraph to delete reference to presentation of apixaban data)