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Soaring sales of Pfizer's Prevnar lead to calls for price cut

Revenue from the family of pneumonia vaccines rose 43% in the fourth quarter

PfizerPfizer has reported a hefty increase in sales of its Prevnar family of pneumonia vaccines, prompting medical charities to call for a price cut.

Prevnar sales rose 43% in the fourth-quarter to $1.86bn, taking the revenues for the product in 2015 as a whole to $6.25bn as group's annual revenues dipped 25 to $48.85bn thanks largely to the strong dollar.

Medecins sans Frontieres (MSF) responded to the results announcement with an immediate call for Pfizer to reduce the price of Prevnar, saying the pneumonia vaccine "accounts for 45% of the total cost to vaccinate a child today in the poorest countries".

"Yet again, Pfizer is reporting sky-high global sales, bolstered in large part by the blockbuster pneumonia vaccine, which the company continues to price out of reach for millions of children in developing countries," said MSF Access Campaign executive director Manica Balasegaram.

The company's global vaccine revenue rose 45% to $1.92bn in the fourth quarter, with a heft chunk of the Prevnar increase coming from a doubling of sales in the US. Group revenues met expectations with a 7% rise to $14.05bn, although net income fell back 50% to $613m thanks to restructuring and administration costs linked in part to the company's recent $17bn takeover of Hospira.

Aside from Prevnar, rheumatoid arthritis treatment Xeljanz (tofacitinib) also performed well - rising 66% to $172m. Meanwhile new breast cancer drug Ibrance (palbociclib), which debuted in the US in February 2015, added $315m to the pot, up from $230m in the third quarter.

Pfizer is in something of a transition mode at the moment as it absorbs Hospira and prepares for the proposed $160bn takeover of Allergan later this year, a deal designed to reduce its tax burden and expand its product portfolio.

Chief executive Ian Read told investors yesterday that he was confident the deal would go through, despite a pledge by the US government to clamp down on overseas M&A transactions aimed at reducing corporation taxes.

Alzheimer's drug shelved
Buried in Pfizer's results statement was news that Pfizer had decided to halt development of an Alzheimer's disease candidate. The drug - called PF-05212377 - is a serotonin 5-HT6 receptor designed to boost levels of neurotransmitters in the brain thought to improve cognition and memory.

While a disappointment for Pfizer, the news that the drug had failed to meet its objectives in a phase II trial had a dramatic impact on other companies developing drugs in this class for AD - including Axovant which is developing a candidate formerly abandoned by GlaxoSmithKline (GSK).

Shares in Axovant fell 25% yesterday on the news as investors got the jitters about RVT-105, its lead candidate that was recently entered into a phase III trial.

Article by
Phil Taylor

3rd February 2016

From: Sales

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