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Pfizer’s flat sales focus investor attention on M&A

But CEO Ian Reed insists that there is no need for a large-scale acquisition

Pfizer

Another quarter of lacklustre sales at Pfizer has renewed calls for the company to think about a large-scale acquisition to regenerate its pipeline, but its chief executive isn’t convinced.

Faced with numerous questions on M&A on the company’s results call, CEO Ian Read insisted he did not see any need for a transformative deal, in part because there are no appropriately-valued opportunities out there, but also because he believes the company’s current pipeline and new products are enough to drive growth.

Shares were on the slide yesterday as the figures were reported, revealing a 1% increase in overall revenues to $12.9bn, which didn’t meet analyst expectations and were dragged back by a 9% slump in the essential health division, which comprises Pfizer’s older brands. Once again, cancer drug Ibrance (palbociclib), anticoagulant Eliquis (apixaban) and Xeljanz (tofacitinib) for arthritis and other immunological indications led the charge, backed up by a solid advance for paediatric vaccine Prevnar 13.

“We remain focused on executing our commercial strategies, managing expenses, advancing our pipeline and prudently allocating our capital to position Pfizer for sustainable success,” he said, pointing to a pipeline of 25-30 candidates which is “as strong as it has ever been” and could generate 15 products with blockbuster potential.

Among the highlights cited by Read on the call were oncology drugs talazoparib - a PARP inhibitor due for filing shortly for breast cancer - along with ALK/ROS1 inhibitor lorlatinib and EGFR inhibitor dacomitinib for lung cancer, which are due for FDA verdicts in August and September respectively.

Vaccines for Clostridium difficile and staphylococcal infections and a new-generation Prevnar are making progress, along with rare disease therapies tafamidis for neuropathies and rivipansel for vaso-occlusive crises and tanezumab for osteoarthritis.

The rumour mill has been grinding out a series of possible acquisitions for Pfizer in recent months, including Bristol-Myers Squibb, Shire and even Allergan, which the company tried and failed to merge with in 2016.

There has been something of a return to the megamerger wave that swept the pharma industry earlier in the decade, although other than Takeda’s $65bn bid for Shire, a lot of the activity has been a pass-the-parcel affair with companies selling off non-core businesses and snapping up those more in line with their growth strategy.

In the last few weeks Sanofi has sold its European generics business to Advent, GlaxoSmithKline divested its rare disease unit to start-up Orchard Therapeutics after buying Novartis out of a consumer health joint venture last month, and Shire has sold its oncology business to Servier.

Pfizer has been hoping to find a buyer for its consumer health division, but so far has had no luck, with GSK and Reckitt Benckiser both excluding themselves from making a formal offer. It said it still expects to make a decision on the future of the unit before the end of the year.

Article by
Phil Taylor

2nd May 2018

From: Sales

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