Pfizer, the No. 1 U.S. drugmaker, reported third quarter earnings Tuesday that exceeded analysts’ estimates for both profit and sales, though there’s little clarity on how the company plans to overcome the loss of patent protection on some top drugs. Here’s what else you need to know.
What you need to know: Pfizer’s (PFE) revenues were higher than expected, but were down 2% year-over-year primarily due to the expiration of co-promotion agreements for select drugs and exclusivity losses in certain markets. Even so, the drugmaker was able to post strong sales due to its cancer drugs and demand for medicines in emerging markets.
The New York City-based company lowered its full-year sales forecast, however, as the dollar’s rise on international currency markets will depress the value of its sales abroad. These account for over 60% of total revenue at Pfizer. The dollar rose nearly 8% against a basket of major currencies in the third quarter.
In addition, the company is also facing the loss of patent protection expiration for its arthritis treatment Celebrex, one of its top selling medicines.
“We remain strategically focused on driving increased innovation,” said CEO Ian Read. “And remain opportunistic regarding business development that can enhance or accelerate our strategy.”
Pfizer has been working on a series of new products that could replace diminishing sales of non-patent protected medicines. This includes its breast cancer drug palbociclib that has been granted “priority review” status by the U.S. Food and Drug Administration and a meningitis B vaccine that is under regulatory review.
The big number: Sales hit $12.4 billion in the third quarter, surpassing analysts estimates of $12.3 billion, according to Bloomberg data. Net income up 3% year-over-year to $2.7 billion, or 42 cents a share. Profits, adjusted for one-time items, were 57 cents a share, beating analyst expectations by 2 cents.
Full-year sales for 2014 have been lowered to $48.7 billion to $49.7 billion from a previous high of $50.7 billion.
What you might have missed: Or, in this case, what you want to make sure you didn’t miss. Pfizer stayed conspicuously mum on the point of Astrazeneca (AZN). Pfizer made a $118 billion bid for the UK-based drugmaker that was rejected in late May. According to British law, Pfizer would be able to come back to the bidding table six months after the rejection date, which would be the end of November.
The tax inversion deal structure would allow Pfizer to move its headquarters to the UK and take advantage of a much lower corporate tax rate. There’s no word on if Pfizer is planning to make a move post-Thanksgiving holiday.