Patent Cliff Still Haunting Pfizer’s Earnings
Since Pfizer’s (NYSE:PFE) patent for its blockbuster cholesterol medicine Lipitor — which for nearly a decade was the world’s top-selling drug — expired in 2011, earnings and revenue have struggled to grow quarter after quarter. Like many large drug manufacturers, cheaper generic versions of its once-top-selling pharmaceuticals are eroding sales for drugs no longer protected by patents, drugs that once earned Pfizer billions annually.
In the absence of high-selling blockbuster drugs, the company cut costs, which along with sales of its top vaccine and pain medications, enabled the company to beat analysts’ bottom-line expectations in the quarter ended in September. But revenue, which also fell more than expected in the second quarter, missed estimates.
On Tuesday, before the bell, Pfizer reported a 19 percent decrease in third-quarter profit as operational expenses, taxes, and charges all rose. Net income came in at $2.59 billion, or 39 cents per share, a decrease from the $3.21 billion, or 43 cents per share, recorded in the year-ago quarter. However, excluding one-time items, net income totaled to $3.86 billion, or 58 cents per share, above the 56 cents per share analysts had expected. Showing further evidence of the company’s difficulties overcoming what is known as the patent cliff, sales dipped 2 percent to $12.64 billion, down from 12.95 billion a year ago and below analysts expectations for $12.69 billion.