Pfizer Inc. (PFE), the world's largest drugmaker, said Friday the loss of patent protection for top sellers such as cholesterol-lowering agent Lipitor will cause sales to remain essentially flat this year.
The New York-based company also issued earnings guidance for 2006 that fell below both last year's results and Wall Street projections when certain costs are excluded. The revised forecast comes just months after Pfizer rescinded its projection of double-digit growth for 2006, and an even stronger performance the following year, because patent expirations would dent results.
Investors had been eagerly awaiting guidance from Pfizer, including signs of how the company plans to increase sales. Shares of the company fell 75 cents,or 2.9 percent, to $25.59 in morning trading on the New York Stock Exchange. Last year, Pfizer stock hit an 8-year low when it was trading at around $20.94.
"This is a time of transformation for Pfizer and our industry," said Chairman and CEO Hank McKinnell. "We are responding directly to the realities of our operating environment as we build value today while aggressively investing in the future."
The company projects 2006 earnings of about $2 per share, excluding special items. Analysts, on average, projected a profit of $2.03 per share. Pfizer reported adjusted profit of $2.02 per share in 2005 on sales of $51.3 billion. The company said 2006 sales would be "comparable" to 2005.
McKinnell said "near-term results will be tempered by loss of exclusivity of older medicines."
Analysts have been concerned about how such a large company can grow when it is losing patent protection on drugs like blood pressure medication Norvasc, a $4.7 billion seller while Lipitor's $12 billion in sales could slump.
On Friday, the company told a meeting of analysts and investors that there should be strong growth for some of its key medicines in 2006.
Pfizer projects Lipitor sales will exceed $13 billion, indicating a growth rate for the drug of about 7 percent compared with 12 percent in 2005. Arthritis medication Celebrex will post sales of more than $2 billion, up from $1.73 billion in 2005. Sales of anti-anxiety drug Lyrica are expected to exceed $900 million, up from $291 million a year earlier.
The company also said it plans to launch six new medicines in 2006, including the recently improved cancer drug Sutent and insulin inhaler Exubera. Other new products include smoking cessation medicine Champix, and new treatments for cancer and diabetes.
Pfizer also told Wall Street it expects to make a decision during the third quarter on selling or spinning off its consumer business, which includes Listerine mouth wash, Visine eye drops and Lubriderm skin lotion. During a meeting with investors Friday morning, Pfizer Vice Chairman David Shedlarz projected the free-standing value of the unit is $10 billion, but couldn't guarantee that is how much the business would fetch.