Pfizer 1Q sales and profit down, but it maintains 2020 views

·3 min read
This Monday, Dec. 4, 2017, photo shows the Pfizer company logo at the company's headquarters in New York. Pfizer said, Tuesday, April 28, 2020, the COVID-19 pandemic is disrupting its patient testing of experimental drugs and will reduce revenue significantly in the second quarter, but its manufacturing plants are running normally. (AP Photo/Richard Drew, File)

Drugmaker Pfizer said the COVID-19 pandemic will reduce its second-quarter sales, as quarantines around the world are reducing visits to doctors — by patients with chronic conditions, parents bringing in kids needing shots and the company's sales representatives.

The world’s biggest prescription drugmaker already experienced lower drug revenue in the first quarter as sales of recently off-patent drugs like painkiller Lyrica dropped, but the company on Tuesday said that it is maintaining its 2020 profit forecast.

Pfizer Chief Financial Officer Frank D'Amelio said the company's strong balance sheet, plus wiggle room from the $2 billion range in expected revenue for 2020, enabled the Viagra maker to keep its January financial forecast despite the pandemic and factors such as unfavorable currency exchange rates hurting revenue.

D'Amelio expects the U.S. health system to gradually recover from July through December.

The pandemic has been disrupting patient testing of many of Pfizer's experimental drugs, but its manufacturing plants are running relatively normally, company executives said on a conference call with analysts to discuss first-quarter results.

The New-York based company's researchers and collaborators are working on ways to fight the virus, from reviewing its existing antiviral medicines and other compounds to see if any might fight the virus, to initial testing of four potential vaccine candidates.

“In our efforts, the biggest hope is a vaccine,” Chief Executive Albert Bourla said in an interview.

Bourla expects data on those vaccines by late June, then will narrow testing to the best two options. If testing goes well and U.S. regulators authorize emergency use of one of those shots, he predicts Pfizer will have millions of doses available by year's end. That could be too optimistic, given vaccines normally take many ears to develop.

Pfizer makes the world's top-selling vaccine, Prevnar 13 for preventing pneumonia and related infections. It brought in $1.45 billion in the first quarter, 12% of the company's $12.03 in total revenue. That was down 8% from $13.12 billion in 2019’s first quarter.

The maker of Xeljanz for rheumatoid arthritis reported net income of $3.4 billion, or 61 cents a share. That was down 12% from $3.88 billion, or 68 cents per share, a year earlier.

Earnings, adjusted for non-recurring costs, came to 80 cents per share, easily topping the 71 cent-per-share average expected by analysts.

Edward Jones analyst Ashtyn Evans wrote to investors that Pfizer’s first-quarter results were strong, partly because some patients filled longer-term prescriptions than usual due to the pandemic. She added that despite delaying starts of new patient drug studies, “Pfizer is making solid progress in its innovative new drug portfolio.”

Pfizer Inc. said it still expects full-year 2020 earnings of $2.82 to $2.92 per share, on revenue of $48.5 billion to $50.5 billion.

Meanwhile, Pfizer has delayed from mid-year until the second half the timing of a major divestiture. Pfizer is spinning off Upjohn, its division selling older, mostly off-patent drugs. Upjohn will merge with generic drugmaker Mylan — which sells EpiPens manufactured by Upjohn — in a new company to be called Viatris.

Pfizer started its slimdown last summer, when it stripped off its consumer health business to combine it with GlaxoSmithKline’s in a joint venture that will be spun off in the future.

In afternoon trading, Pfizer shares fell 23 cents to $38.10.


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