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.
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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.
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