Pfizer 4Q net falls by half after generic Lipitor (AP)

Pfizer Inc.'s fourth-quarter results handily beat analysts' expectations on Tuesday, even though the drugmaker's profit fell by half because of one-time charges and a big drop in U.S. revenue lost to new generic competition for blockbuster cholesterol drug Lipitor.

Cuts in the sales force and other costs and strong sales outside its pharmaceutical business helped the New York-based company. But it significantly trimmed its full-year forecasts for both earnings per share and revenue.

Pfizer blamed recent changes in foreign exchange rates, as the strengthening of the dollar against other currencies reduces the value of foreign sales, a factor other drugmakers have been citing this month.

The maker of Viagra said net income was $1.44 billion, or 19 cents per share, down from $2.89 billion, or 36 cents per share, a year earlier.

Excluding restructuring, depreciation, litigation and other charges, income was $3.86 billion, or 50 cents a share, down from $3.74 billion, or 47 cents a share, a year earlier.

Generic competition to multiple drugs reduced revenue to $16.7 billion, down 4 percent from $17.4 billion in 2010's fourth quarter. Favorable currency exchange rates boosted sales by 1 percent.

Earnings and revenue topped analysts' expectations of 47 cents per share on revenue of $16.61 billion. They typically exclude one-time items.

The company forecast 2012 earnings per share of $2.20 to $2.30, excluding one-time items, down a nickel from its last forecast and below analysts' consensus of $2.31. It also forecast revenue of $60.5 billion to $62.5 billion, down $1.7 billion from the prior forecast.

"Overall it was a decent Q4," BernsteinResearch analyst Dr. Tim Anderson wrote in a note to investors, adding that "markets may shrug off" the reduced 2012 profit forecast.

But Erik Gordon, an analyst and professor at the University of Michigan's Ross School of Business, said sales from Pfizer's latest drug approvals "will be a fraction of the sales lost from Lipitor's patent expiration, despite Pfizer launching the most aggressive post-generic defense ever seen."

"It's like throwing two shovels of gravel into the Grand Canyon," Gordon wrote.

In premarket trading, Pfizer shares rose 8 cents to $21.66.

CEO Ian Read said in a statement that prospects are improving with a "wave" of new drug compounds in early and mid-stage testing and approvals in the last month for kidney cancer pill Inlyta and for use of children's pneumococcal vaccine Prevnar 13 in adults ages 50 and up.

Read noted patent losses cost the company $5 billion throughout 2011; that included a $1.3 billion hit in the fourth quarter, with U.S. pharmaceutical sales down 15 percent to $5.46 billion.

While Pfizer now has generic competition to several former blockbusters, the key hit was to Lipitor, whose U.S. patent expiration on Nov. 30 was the most closely watched event in the industry last year. With just a month left in the quarter after that, Lipitor sales still fell 42 percent in the U.S. and 24 percent overall, to a total of $2 billion worldwide in the fourth quarter.

The world's top-selling drug ever, Lipitor brought Pfizer $10.7 billion in 2010, just over half of that from the U.S. The world's biggest drugmaker fought to retain much of that money for the time being with an unprecedented strategy, continuing consumer ads for the popular pill and offering patients and insurers big discounts to stay on brand-name Lipitor. It also jointly marketed an authorized generic version with Watson Pharmaceuticals Inc.

Given that U.S. insurers had been set to immediately switch their patients on Lipitor to cheaper generics ? the authorized one or a second version sold by India's Ranbaxy Laboratories ? the sales plunge would have been worse without those efforts.

Revenue for all five of Pfizer's prescription-drug segments fell by at least 4 percent, with primary care medicines, the segment that includes Lipitor, down by 8 percent to $5.41 billion. Total pharmaceutical revenue fell 6 percent to $14.14 billion.

Sales continued to slide for about a dozen drugs that have gone off patent in the last couple years, but rose several percent for erectile dysfunction pill Viagra, pain reliever Celebrex and immune disorder treatment Enbrel. Fibromyalgia treatment Lyrica jumped 22 percent to $998 million.

The biggest segment increases came in smaller businesses that Pfizer is considering selling or spinning off. Animal health was up 13 percent at $1.11 billion nutrition was up 22 percent at $598 million. Consumer health, which includes brands such as Centrum vitamins and Chapstick, was up 8 percent at $817 million.

Pfizer said it plans to buy back $5 billion worth of stock this year.

For the full year, net income rose 21 percent to $10.01 billion, or $1.27 per share, from $8.26 billion, or $1.02 per share, in 2010. Revenue edged up 1 percent, to $67.43 billion from $67.06 billion.

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Linda A. Johnson can be followed at http://twitter.com/LindaJ_onPharma

Source: http://us.rd.yahoo.com/dailynews/rss/earnings/*http%3A//news.yahoo.com/s/ap/20120131/ap_on_bi_ge/us_earns_pfizer

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