PFE Pfizer Inc

By Kimberly Chin and Jonathan D. Rockoff 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 31, 2018).

Pfizer Inc. narrowed its full-year revenue and profit targets as the drugmaker works its way through the last legs of patent expiries for big-selling legacy products and copes with pricing challenges.

Pfizer CEO Ian Read criticized the Trump administration's plans to test out some efforts to reduce Medicare spending on biotech drugs administered by doctors and hospitals, especially a proposal to index how much the government health insurer pays to the prices paid by other countries.

"It effectively imports price controls into the U.S., and I hope the administration will reconsider that," Mr. Read said Tuesday on a conference call.

For the fiscal year 2018, Pfizer expects sales to be in the range of $53 billion to $53.7 billion, compared with $53 billion to $55 billion as previously guided. It now targets adjusted earnings of $2.98 to $3.02 a share, compared with its previous guidance of $2.95 to $3.05.

The company attributed the adjustments partly to lower-than-expected revenue from its "Essential Health" business selling products that have lost patent protection and sterile injectables, which are dealing with shortages.

Pfizer also cited pricing pressures on the unit's drugs, along with recent unfavorable foreign-exchange rates due to the weakening of some emerging-market currencies and the euro.

Overall, Pfizer said its third-quarter revenue increased 1% from a year ago to $13.29 billion, below the $13.53 billion analysts polled by Refinitiv had expected. Meantime, third-quarter profit rose 45% to $4.11 billion, or 69 cents a share, from a year ago. Analysts expected earnings of 58 cents a share.

Company executives touted the performance of the "Innovative Health" unit selling patent-protected drugs, including faster-growing products like breast-cancer treatment Ibrance, prostate-cancer drug Xtandi and blood thinner Eliquis.

Pfizer executives say the business can power higher sales once the company works through the last of its big patent expiries. Male-impotence pill Viagra began facing generic competition late last year, while the Lyrica pain treatment is expected to confront generics at the end of this year.

Earlier this month, Pfizer said Mr. Read would leave the CEO job after eight years to make way for Albert Bourla, who currently serves as chief operating officer. Mr. Bourla will take the top role in January.

Mr. Bourla sketched out the direction he wants to take the company in the earnings call, saying Pfizer will focus on realizing the potential of its pipeline, rather than doing big deals that bring integration headaches. "We believe we have the best pipeline in our history," Mr. Bourla said, with as many as 15 drugs that could surpass $1 billion in yearly sales.

To deliver on its pipeline, Mr. Bourla said the company expects it will have to boost spending on drug development and commercialization, offset by some cost cutting.

Pfizer said it will make a decision by year's end on the fate of its consumer-health business, which it has considered selling or spinning off. "All options are available to us," including a split or partnership, Chief Financial Officer Frank D'Amelio said in an interview. So far, he said, Pfizer hasn't received an "acceptable offer" to buy the business.

Pfizer shares, up 19% for the year, fell 1.2% in midday trading Tuesday.

Corrections & Amplifications Pfizer expects sales to be in the range of $53 billion to $53.7 billion, compared with $53 billion to $55 billion as previously guided. An earlier version of this article incorrectly said Pfizer expected sales to be in the range of $53 billion to $55 billion, compared with $53 billion to $53.7 billion as previously guided. (Oct. 30, 2018)

Write to Kimberly Chin at kimberly.chin@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

October 31, 2018 02:47 ET (06:47 GMT)

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