Pfizer Earnings Preview: Revenue Decline To Continue As Pfizer Searches For New Growth Avenues

+2.59%
Upside
27.89
Market
28.61
Trefis
PFE: Pfizer logo
PFE
Pfizer

Pfizer (NYSE:PFE) expects that much of the decline in revenue for 2015 will be due to the effect of recent and expected product losses of exclusivity. This effect is expected to reduce the company’s revenue by $3.5 billion this year. [1] Its revenues will also be adversely impacted by the strengthening U.S. dollar. We believe these expectations will come into play when the company reports its Q1 2015 earnings on April 28th. We expect vaccine and oncology revenues to grow, along with visible ramp up in Eliquis’ sales. However, adverse currency movement and decline in legacy drugs will continue to be a dampener. Pfizer’s current year guidance indicates that the company expects operating conditions to remain challenging in the short to medium term.

See our complete analysis for Pfizer

Relevant Articles
  1. Should You Pick Pfizer Stock At $30 After A 30% Fall In A Year?
  2. Should You Pick Pfizer Stock At $30?
  3. Down 25% In A Year Will Pfizer Stock Rebound To Its Pre-Inflation Shock Level?
  4. Will Pfizer Stock See Higher Levels Post Q1 Earnings?
  5. Is Pfizer Stock Undervalued At $40?
  6. This Logistics Company Appears To Be A Better Pick Over Pfizer Stock

The Outlook For Vaccine Franchise Is Looking Good

Pfizer’s vaccine business primarily revolves around Prevnar franchise. Prevnar 13 saw a strong growth of 19% for the full year 2014, primarily driven by the timing of purchases from the U.S. government and positive recommendations from the U.S. Centers for Disease Control. Pfizer’s international sales growth remained in double digits (excluding the impact of currency movements) for 2014 due to higher number of shipments for GAVI (Global Alliance for Vaccines and Immunization) and Prevenar’s inclusion in additional national immunization programs in certain emerging markets. Prevnar 13 has a dominant position in the U.S. and is expanding in Europe as well. We expect the business to remain strong in Q1 2015 as well, although the timing of government spending could have sequential impact to some degree. The usage of Prevenar 13 can expand further considering European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) is recommending that the vaccine can be further indicated for pneumonia caused by the 13 pneumococcal serotypes in adults. ((Prevenar 13®* Receives CHMP Positive Opinion For Prevention Of Vaccine-Type Pneumococcal Pneumonia in Adults, Pfizer Press Release, Jan 22 2015)). The final decision needs to be taken by the European Commission. Pfizer’s vaccine has no significant competitiors in the market  and if situation remains the same, the vaccines sales can increase significantly in coming years.

Oncology Will Get Support From Accelerated Approval For Ibrance

Pfizer’s revenues related to oncology drugs jumped 10% globally in Q4 2014 and the segment’s revenue growth stood at roughly 13% for the whole year. This growth is likely to continue in the first quarter as well. The company recently got accelerated FDA approval for Ibrance, one of its breast cancer drugs, which has been found to improve progression-free survival time in patients when used in combination with letrozole. [2] In addition, some of the other products such as Eliquis and Xeljanz are likely to do well. Eliquis is essentially a blood thinner and has seen continued adoption among healthcare specialists. Given the decline in Lipitor’s sales, Eliquis is expected to play a critical role in reviving Pfizer’s cardiovascular drug business. This segment contributes roughly 10%-15% to Pfizer’s total value, by our estimates.

View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research

Notes:
  1. Pfizer’s SEC Filings []
  2. Pfizer Receives U.S. FDA Accelerated Approval of IBRANCE® (palbociclib), Pfizer Press Release, Feb 3 2015 []