Pfizer (PFE) is scheduled to report results of its first fiscal quarter before the market open on May 1, with a conference call scheduled for 10:00 am EDT. What to watch for 1. 2018 GUIDANCE: Along with its fourth quarter financial report, the drug giant gave its view for 2018. Pfizer anticipates FY18 adjusted EPS of $2.90-$3.00, on revenue of $53.5B-$55.5B. Analysts are currently expecting FY18 EPS of $2.95 on revenue of $54.46B. In January, Pfizer said Innovative Health, or IH, revenues increased 5% operationally in Q4, driven by continued growth from key brands including Eliquis globally, Xeljanz primarily in the U.S., Prevenar 13 primarily in emerging markets, as well as Lyrica, Ibrance and Chantix/Champix, all primarily in the U.S. Global revenues for Eliquis increased 43% operationally in Q4, while global Xeljanz revenues grew 47% operationally. Q4 IH operational revenue growth was negatively impacted by lower revenues for Viagra in the U.S. primarily due to generic competition that began in December 2017 and for Enbrel in most developed Europe markets due to continued biosimilar competition. 2.CONSUMER HEALTH BUSINESS: With its last quarterly report, Pfizer CEO Ian Read said the company is on track to explore decisions for Consumer Healthcare business. He said at the time, “I believe our capital allocation decisions in 2017 enhanced shareholder value. In addition to investing in our business, we also returned $12.7B directly to shareholders through a combination of dividends and share repurchases and we decided to explore potential strategic alternatives for our Consumer Healthcare business. We remain on track to make this decision, which could include everything from a full or partial separation to ultimately deciding to retain the business, during 2018.” According to recent reports, interest in Pfizer’s consumer health business is waning. FiercePharma said recently,”Pfizer is said to have only two interested parties, GlaxoSmithKline (GSK) and Reckitt Benckiser Group (RBGLY), after others decided to pass on the deal.” 3. PFIZER HAS NO INTEREST IN BRISTOL-MYERS: In mid April, Citi analyst Andrew Baum said Pfizer’s CEO made it clear to him that the Pfizer has no interest in acquiring Bristol-Myers (BMY) in the absence of transformational data or a de-rating in the stock. Pfizer has high conviction in its current pipeline and believes that the return on investment is considerably higher than high risk transformational deals, particularly in the dynamic immuno-oncology space, the analyst pointed out. Baum also noted that he anticipates Pfizer to meaningfully increase its current share repurchase program from the current $5B-$6B per annum to offset the earnings per share dilution from higher anticipated research and development investment to monetize its current pipeline. Regarding AstraZeneca (AZN), Pfizer’s CEO told the analyst that revisiting it as an M&A target was “impossible” given the political sensitivities likely compounded by Brexit. The analyst reiterated a Sell rating on Pfizer shares and said he continues to prefer shares of Bristol-Myers, Merck (MRK) and Eli Lilly (LLY).
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