Pfizer Inc.’s (NYSE:PFE) strategy of vigorous cost cutting and better restructuring in a more economic way has proved to be immensely useful, because their net income has gone up to 25% in the 2nd quarter. Their stock climbed to 51 cents, or 2.2%, to $24.22 in afternoon trading. The rise is surprising, since Pfizer’s rival Lipitor, a cholesterol fighting drug, was giving them tough competition. Total income has gone up to 3.25 billion or 43% a share, as compared to 2.61 billion or 33% per share. Bernstein Research analyst, Dr. Timothy Anderson has attributed the profit to better gross margins and lower selling, more revenue, and cutting costs of both general and administrative operations.
Get Free Trend Analysis on PFE
For a 4 dollar monthly co-payment, patients could buy Lipitor via the discount card provided to them and rebates were also offered when prescriptions recommended Lipitor. Due to various generic versions being introduced in the market, the insurer rebates were stopped in May. Generics were available at 15 dollars, while Lipitor’s price was around 175 dollars a month. Sales went down to 296 million from 1.4 billion a year back, and global sales plummeted by 53% to 1.22 billion.
Lyrica and Prevnar 13, which also fall into the category of newer drugs, experienced a huge rise in sales amounting to 1.04 billion and 916 million respectively. Veterinary medicines jumped up 3% to 1.09 million and health care products like ChapStick and Centrum vitamins went up 8% to 768 million.
Food and Drug Administration will take action against Pfizer soon for two experimental drugs sold by them. The FDA has requested a detailed analysis in August of testing data on tofacitinib, for rheumatoid arthritis. Initial results have revealed that tofacitinib was better than the standard treatment at reducing symptoms and limiting structural damage from the immune disorder. Data also needs to be provided on how well blood thinner Eliquis prevented strokes in patients with an irregular heartbeat
It remains to be seen if Pfizer will be able to bounce back. It maintained its forecast for 2012 for adjusted earnings per share of 2.14 to 2.24 and revenue coming to 58-60 billion. The company is hoping to register with the Securities and Exchange Commission for a public offering of a new product called Zoetis. It will sell off its nutrition business to another hotshot brand.