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— Pfizer Inc., which reports first-quarter results before the stock market opens Tuesday, likely will focus on a recent acquisition, promising data on some experimental drugs and efforts to improve its business portfolio under CEO Ian Read, who took over in December.
WHAT TO WATCH FOR: Pfizer, the world's biggest drugmaker, increasingly is under the gun to find ways to maintain revenue and profit with the biggest drug patent expiration in history just months away. Lipitor, its $12 billion-a-year cholesterol fighter, loses U.S. patent protection on Nov. 30 and already has generic competition in some smaller markets.
Investors will be watching to see whether Pfizer maintains its revenue forecast for 2012, when generic competition will eat up Lipitor sales. Pfizer's already reduced that by $2.2 billion, to about $64.25 billion, and said it will cut 2012 research spending by $1.5 billion, to about $8.25 billion. That's the one category where level or increased funding is preferred.
Pfizer, the maker of impotence pill Viagra and pain treatment Lyrica, also is hurt by pressures on the whole pharmaceutical industry: the weak global economy, higher drug rebates required under the U.S. health care overhaul and pricing pressures from European governments.
Executives likely will update their progress in reducing costs by their target of $4 billion to $5 billion per year since buying Wyeth for $68 billion in October 2009.
Analysts will look for updates on progress in reviewing which Pfizer and Wyeth businesses, products and research programs to keep. Pfizer recently made one expected move, saying it will sell its capsule-making business for $2.4 billion. Pfizer plans to use that to buy back stock and possibly make some deals.
Last month, Pfizer bought King Pharmaceuticals Inc., which makes pain drugs and other products, for $3.6 billion. Last week, Pfizer said it will pursue increased business in the huge Chinese market with its biggest distributor there, Shanghai Pharmaceutical Co. Ltd., including boosting promotion of Prevnar.
This month, Food and Drug Administration advisers recommended approving two Pfizer cancer drugs, Afinitor and Sutent, for treating advanced pancreatic tumors and pancreatic tumors that can't be surgically removed, respectively. Sutent is approved to treat tumors in four different organs, but failed in testing against lung and prostate cancer.
Company executives are sure to discuss research news on three key experimental drugs.
But Pfizer's been having problems elsewhere, including running into delays from regulators on other drugs.
WHY IT MATTERS: Over the last few years, Pfizer repeatedly has had promising experimental drugs fail in late-stage testing, including what had been a highly anticipated successor drug to Lipitor, despite heavy research spending. That and the company's lackluster stock performance for the past four years led to Pfizer's board to oust Read's predecessor.
The Wyeth acquisition and furious cost-cutting ever since have boosted the bottom line temporarily. But Pfizer needs to develop or buy rights to multiple big new drugs to withstand Lipitor's patent expiration.
WHAT'S EXPECTED: Analysts surveyed by FactSet expect earnings per share of 58 cents and revenue of $16.61 billion.
LAST YEAR'S QUARTER: A year ago, Pfizer posted earnings per share of 25 cents, or 60 cents excluding restructuring and other charges, and revenue of $16.75 billion.
