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Products over pipeline in Pfizer's acquisition targets, hints CEO

Sale forecasts for 2015 are down by up to $5bn compared to last year

Pfizer headquartersPfizer is still on the lookout for acquisitions but seems more focused on bolstering its product portfolio than its R&D pipeline, according to comments made during its fourth-quarter results call.

Much of the discussion on the call focused on Pfizer's business development plans as the company issued sales forecasts for the coming year of $44.5bn-$46.4bn, down from $49.6bn in 2014 and below analyst expectations, as it bears the brunt of generic competition on some big-selling products.

Chief executive Ian Read told investors that deals such as its recent immuno-oncology tie-up with Merck KGaA had strengthened the pipeline, and the company would rather spend its cash pile on deals that would accelerate earnings growth.

The company is "biased towards deals with a potential for creating value in the near term," he said, as Pfizer reported declines in both sales and earnings.

Sales were down 3% to $13.12bn in the fourth quarter, while net earnings fell 52% to $1.23bn. Moreover, turnover will be hit in 2015 year by another $3.5bn in sales lost to generic competition, according to chief financial officer Frank D'Amelio.

Most damaging to Pfizer's top-line this year was the loss of patent protection for big-selling painkiller Celebrex (celecoxib) last December in the US, with competition already being felt with sales down by a third in the fourth quarter to $550m.

No megamerger required

Read also insisted there was no urgency to carry out a big merger, despite the company's failure to usher AstraZeneca (AZ) to the altar last year and repeated rumours of discussions from other companies such as Teva.

In general terms, the prices being asked by companies discussing the sale of businesses are "buoyant" given the overall state of the market, said Read, and this means that buyers are being asked for premiums on top of "high valuations".  

Read also stressed there had been no decision taken on the possible split of the company, saying this would depend upon "how our businesses perform in their markets [and] having a high degree of confidence that the businesses will be successful as stand-alone entities."

The CEO was at pains to dispel any lingering concerns that Pfizer's pipeline is a little sparse, insisting for example that the deal with Merck for its PD-L1 inhibitor avelumab will give the companies the potential to become leaders in monotherapies for some cancers as well combination therapies.

"We expect to have five different immuno-oncology drugs in the clinic this year and up to 10 by 2016," he said.

Article by
Phil Taylor

29th January 2015

From: Sales



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