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Pfizer figures fall in Q1

US firm posts revenue losses of 8 per cent in a challenging economic environment as patent expiries bite and sales decline

US firm posts revenue losses of 8 per cent in a challenging economic environment as patent expiries bite and sales decline.

Pfizer has reported revenues of $10.9bn for the first-quarter of 2009, a fall of 8 per cent on revenues of $11.8bn in the same reporting period in 2008, as the company grappled with the challenging economic climate and foreign exchange, which accounted for a 5 per cent ($640m) fall in revenue figures.

The US firm said that as well as the negative impact of foreign exchange, loss of exclusivity for Zrytec (January 2008) and Camptosar (February 2008), in addition to declining revenues for Lipitor and label changes to Chantix, affected first-quarter figures.

US revenues fell 10 per cent to $5bn (46 per cent of overall revenues) and international revenue dropped 7 per cent to $5.9bn (54 per cent of overall revenues), this reflected an operational growth of 3 per cent, which was more than offset by the unfavourable impact of foreign exchange of 10 per cent. 

The negative impact of foreign exchange was felt across the company's five customer-focused units: primary care, specialty care, oncology, established products and emerging markets. First-quarter revenues dropped 8 per cent to $5.3bn in primary care compared to the same period last year, driven by continued generic competition on Lipitor, loss of exclusivity on Zrytec and label changes to Chantix. In specialty care revenues were up 7 per cent to $1.5bn from $1.4bn in the first quarter of 2008, despite the negative impact of foreign exchange. This was driven by the solid operational performance both in the US and international markets from products including Xalatan, Zyvox, Vfend and Revatio.

Pfizer's oncology division suffered the greatest loss of the five customer-focused units with a 17 per cent loss in revenues to $350m compared with $421m in 2008. The decline was attributed to US loss of exclusivity for Camptosar, although this was partially offset by strong international performance driven by Sutent.

Revenues for established products dropped 12 per cent to $1.6bn from $1.8bn a year ago. The unit, which generally comprises products that have lost patent protection or marketing exclusivity, was created in 2008 with purpose of recapturing value for such products in developed market geographies by progressively slowing the erosion of, and ultimately stabilising, revenue and profit from established products.

Emerging markets revenues fell by 9 per cent to $1.4bn from $1.5bn.

Net income for the period fell 2 per cent to $2.7bn from $2.8bn thanks to the negative impact of foreign exchange and the increase in the effective tax rate, as well as costs associated with the pending acquisition of Wyeth.

Commenting on the firm's first-quarter performance, CEO Jeff Kindler, said: "During the quarter, we continued our ongoing efforts to reshape our operating model, made substantial progress in planning for the Wyeth integration, and faced a challenging and dynamic economic and competitive environment. Yet we remained focused on meeting our commitments – generating revenues consistent with our expectations and continuing to streamline our cost structure. We remain on track to deliver on our full-year 2009 guidance for revenues and adjusted results."

"Even as we achieve our short-term objectives, we continue to lay the groundwork to increase long-term shareholder value through pending combination with Wyeth," he added.

28th April 2009

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