Pfizer beats 1Q profit forecasts, but sales slip

Pfizer beat Wall Street expectations for first-quarter profit thanks to reduced spending on operations and legal costs, plus strong sales of key new drugs and longtime blockbuster pain treatment Lyrica.

But revenue at the top U.S. drugmaker dipped 1 percent as competition intensified from rival brands and generic copycats. Pfizer is near the end of a years-long stretch in which generic competition cut into revenue from its one-time blockbuster drugs, including cholesterol, heart and pain drugs. Near-copies of Enbrel, an injected immune disorder drug it sells overseas, cut sales 18 percent to $588 million in the quarter, for example.

This year, drugs with sales of about $2.5 billion face generic competition, including Viagra, which gets its first U.S. generic competition late this year.

Pfizer, which has boosted sales and its pipeline of future drugs through acquisitions in the past, completed two purchases and an asset sale since January of 2016.

Its $14 billion buyout of cancer drug developer Medivation last September gave it prostate cancer drug Xtandi, which had sales of $131 million in the quarter. That helped boost Pfizer's oncology sales 36 percent, to $1.35 billion. The company told analysts more cancer drugs are in testing and it expects steady approvals over several years.

CEO Ian Read said Tuesday that the company will continue to look for deals, but is also monitoring potential changes in tax law and health care policy.

The New York company on Tuesday reported net income of $3.12 billion, or 51 cents per share, up from $3.04 billion, or 49 cents per share, a year earlier. Adjusted earnings were 69 cents per share, two cents more than expected.

Revenue totaled $12.78 billion, missing forecasts for $13.04 billion.

Sales of Pfizer's patent-protected newer drugs rose 5 percent to $7.42 billion.

Sales of Prevnar 13, the top-selling vaccine ever, fell 7 percent to $1.4 billion. The company made $1.13 billion from fibromyalgia and pain treatment Lyrica, up 7 percent, and $679 million from new breast cancer drug Ibrance, up 59 percent.

Sales of older drugs with expired patents fell 10 percent, to $5.36 billion; consumer health sales increased 3 percent, to $848 million.

Pfizer Inc. reaffirmed its January forecast for full-year earnings between $2.50 and $2.60 per share, with revenue between $52 billion and $54 billion.

Edward Jones analyst Ashtyn Evans called it a mixed quarter, with disappointing sales of some new medicines but promise from a "solid portfolio of new products."

"We believe the company will need to add to its new drug portfolio to drive growth," Evans wrote, adding that's likely if U.S. corporate tax reform happens.

In early-afternoon trading, Pfizer shares fell 28 cents to $33.50.

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