Pfizer Revenues Hit by Lost Exclusivity in 1Q15
Pfizer in 1Q15: External Forces Pressure Financial Guidance (Part 3 of 5)
Performance of innovative products
Pfizer’s (PFE) innovative products grew by 9.3%. This was primarily on account of the growth in the GVOC (Global Vaccines, Oncology, and Consumer Healthcare) business, which grew by ~23%. GVOC growth is broken down this way:
Global Vaccines – ~44%
Consumer Healthcare – 6%
Global Oncology – 8%
In terms of vaccines, Prevnar 13 reported remarkable growth of 80% in the US and 15% in international markets. In oncology, Xalkori and Inlyta grew 26% and 8% globally, respectively. The US launch of Ibrance in February 2015 showed remarkable growth. Ibrance is a new cancer drug used for the treatment of advanced breast cancer.
As mentioned previously in this series, the Innovative Products business segment is the sum of (GIP) Global Innovative Pharmaceutical and GVOC. GIP revenues were flat in 1Q15 in comparison to revenues in 1Q14. Meanwhile, Xeljanz made significant progress, growing by ~78% in the US. Xeljanz has been approved in 40 countries for the treatment of rheumatoid arthritis.
Performance of Established Products
Pfizer’s revenues from the Established Products segment declined 16% in 1Q15. This was primarily due to increasing generic competition, led by the loss of exclusivity of the following drugs:
Celebrex lost exclusivity in December 2014 in the US
Zyvox IV lost exclusivity in January 2015 in the US
Lyrica lost exclusivity in certain developed European markets
Lipitor continues to face generic competition in developed markets
the Spiriva collaboration was terminated in most countries, including the US, in April of 2014
The declines were partially offset by strong growth related to the following drugs in emerging markets:
Viagra – 12%
Norvasc – 8%
Lipitor – 17%
Other leading companies such as Johnson & Johnson (JNJ), Merck & Co. (MRK), and Novartis (NVS) are also struggling with increasing generic competition for their key products.
As an alternative to investing directly in Pfizer, you might consider pharmaceutical funds such as the iShares U.S. Healthcare ETF (IYH) and the Health Care Select Sector SPDR Fund (XLV). Pharma companies make up 42.39% of XLV and 41.39% of IYH.
Browse this series on Market Realist:
