Pfizer Inc. said Thursday first-quarter earnings and sales fell due to the expiration of US exclusivity licenses for two key drugs that now face competition from generic versions.
Pfizer reported first-quarter net profit of 2.78 billion dollars, down 18 percent from a year ago, and revenue that fell five percent to 11.85 billion dollars.
The New York City-based drug giant reported adjusted earnings per share (EPS) of 61 cents, falling short of market expectations of 66 cents.
The company forecast for all 2008 adjusted EPS a range of 2.35 to 2.45 dollars, and revenue of 47-49 billion dollars, in line with analysts' forecasts.
Pfizer attributed the revenue decline to its loss of US exclusivity for anti-hypertension drug Norvasc and antihistamine Zyrtec.
"As we discussed in our fourth-quarter 2007 earnings call and materials, the first-quarter 2008 is not comparable to the year-ago quarter due to the loss of US exclusivity of Norvasc in late March 2007 and Zyrtec in late January 2008," said Jeff Kindler, the company's chairman and chief executive.
"These results, however, are in-line with our expectations," he said in a statement.
In the first three months of the year, sales of Norvasc fell by 556 million dollars from the same period in 2007, and sales of Zyrtec dropped by 344 million dollars.
The lower earnings also were due to an increase of research and development spending linked to the acquisition in 2007 of the laboratories CovX and Coley Pharmaceutical.
First-quarter revenues were inflated by the declining value of the dollar, which increased sales by approximately 570 million dollars, or five percent.
"Today we are reaffirming our full-year 2008 financial guidance," Kindler said.
"Many of our new products continued to perform well," he said, adding that many in-line medicines, such as the erectile dysfunction drug Viagra, showed "steady growth."
Sales of the anti-cholesterol drug Lipitor fell 18 percent in the US under fierce competition from generics but rose 13 percent in the international markets, the company said.
"We're continuing to make progress on our cost-reduction initiatives and are well on our way to achieving at least a 1.5 to 2.0 billion dollar reduction in adjusted total costs at the end of 2008 versus 2006, on a constant currency basis," said Frank D'Amelio, chief financial officer.
"We're on track to generate 17 to 18 billion dollars in operating cash flow in 2008, and we expect to continue to generate strong operating cash flow beyond 2008."
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