Pfizer slips after Q1 sales miss, split ‘off the table for foreseeable future’

Shares of Pfizer (PFE) are slipping after the company reported another quarter of sluggish sales, hurt by lower than expected sales of blockbuster breast cancer drug Ibrance and arthritis drug Xeljanz. Additionally, the drugmaker said it is taking a split “off the table for the foreseeable future” as it has not received an “acceptable offer” for its Consumer Healthcare business. RESULTS: This morning, Pfizer reported first quarter adjusted earnings per share of 77c and revenue of $12.19B, both above the consensus of 75c and $13.15B, respectively. The drugmaker also backed its FY18 adjusted EPS view of $2.90-$3.00 and its FY18 revenue forecast of $53.5B-$55.5B. Financial guidance for adjusted EPS now anticipates share repurchases totaling approximately $6.1B in 2018, which includes shares repurchased during first-quarter 2018. the company said. Additionally, Pfizer said Innovative Health, or IH, revenues increased 3% operationally in Q1, primarily driven by continued growth from key brands including Ibrance, Eliquis and Xeljanz. Global operational revenue growth for Ibrance, Eliquis and Xeljanz was 35%, 30% and 29%, respectively. However, Q1 IH operational revenue growth was negatively impacted primarily by the loss of exclusivity of Viagra in the U.S. in December 2017 and the resulting shift in the reporting of U.S. and Canada Viagra revenues to the Essential Health business at the beginning of 2018. IH operational revenue growth was also negatively impacted by lower revenues for Enbrel in most developed European markets due to continued biosimilar competition. In the U.S., revenue for Ibrance, Xeljanz and certain other products was negatively impacted by customer buying patterns. Essential Health revenues declined 9% operationally, negatively impacted primarily by a 15% operational decline from the Sterile Injectable Pharmaceuticals portfolio, primarily due to continued legacy Hospira product shortages in the U.S. EH operational revenue growth was also negatively impacted by a 15% operational decline from the Peri-LOE Products portfolio, primarily due to expected declines in Lyrica in developed Europe and Pristiq in the U.S., partially offset by the addition of Viagra U.S. revenues previously recorded in the IH business. These declines were partially offset primarily by 12% operational growth in emerging markets and 53% operational growth from Biosimilars, primarily from Inflectra in certain channels in the U.S. as well as in developed Europe. SPLIT ‘OFF THE TABLE’ FOR NOW: During the company’s first quarter earnings conference call, Pfizer said that it is taking a split “off the table for the foreseeable future” and that it has not received an “acceptable offer” for the sale of its Consumer Healthcare business. The drugmaker’s CFO Frank D’Amelio added that, “We never say never to anything, but right now, for the foreseeable future, we’re all about executing on our business.” Pfizer will continue to manage the Consumer Healthcare unit as it explores other alternatives, which may include “everything from a full or partial separation of the business to ultimately deciding to retain the business,” CEO Ian Read contended, adding that he continues to expect to “make a decision during 2018.” PRICE ACTION: In late morning trading, shares of Pfizer have dropped about 5% to $34.91.