Ibrance, Xeljanz, And Eliquis Will Likely Drive Pfizer’s Q2 Earnings Growth

by Trefis Team
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Pfizer (NYSE:PFE) is set to report its Q2 2018 earnings on July 31, and we expect the company to post steady growth, primarily led by a ramp up in Oncology drug sales. We also expect the company to benefit from Eliquis, which has been doing very well of late, led by market share gains. It will also be interesting to see the trends in Prevnar sales, which saw a slight decline in the previous quarter. It should be noted that Prevnar is the top selling drug for Pfizer, with 2017 sales of over $5.6 billion. We continue to believe that Oncology drug sales will remain a key growth driver for Pfizer in the coming years, along with its biosimilars in the pipeline. We have created an interactive dashboard ~ What Is The Outlook For Pfizer ~ on the company’s expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s overall revenues, profits, earnings, and price estimate.

Expect Oncology And Legacy Pharma, Consumer, Biosimilars & Others To Lead The Near Term Growth

We expect the company’s Oncology segment to continue to drive growth for Pfizer in 2018, and beyond. Ibrance, which is used for the treatment of breast cancer, has seen solid growth of late, and we expect this to continue in the near term with an estimated 25% jump in sales to $3.9 billion for the full year. Among other segments, Musculoskeletal will likely see a modest decline, as an expected double digit growth in Xeljanz will likely be offset by a decline in Enbrel and other drugs. Xeljanz has been doing well of late, and saw sales jump 30% in the previous quarter. The drug received the U.S. FDA approval for Psoriatic Arthritis in December last year, and it was also approved for Ulcerative Colitis earlier in May this year. This will bode well for the drug’s sales growth in the coming quarters. Another important drug to watch out for will be Eliquis. The drug was jointly developed by Bristol-Myers Squibb and Pfizer, and it has seen strong growth in the recent quarters, led by market share gains. The drug is set to overtake Warfarin in the OAC (oral anticoagulant) market. Eliquis falls under Legacy Pharma, Consumer, Biosimilars & Others segment in our model. We expect Eliquis to aid the segment revenue growth and forecast a mid-single digit gains for 2018. The segment will also benefit from growth of biosimilar Inflectra in Europe. It will also be interesting to see the trends in Pfizer’s top selling drug – Prevnar, which saw a modest decline in the previous quarter. 

Overall, we expect the company to post adjusted earnings of $2.90 in 2018. We forecast a price to earnings multiple (TTM) of 14x, to arrive at our price estimate of $41 for Pfizer, which is a premium of around 7% to the current market price.


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