Third-Quarter 2016 Revenues of $13.0 Billion, Reflecting 10% Operational Growth
Third-Quarter 2016 Revenues for Pfizer Standalone (Excluding Legacy Hospira) of $11.9 Billion, Reflecting 3% Operational Growth
Third-Quarter 2016 Reported Diluted EPS(1) of $0.21, Adjusted Diluted EPS(2) of $0.61
Narrows Certain 2016 Financial Guidance Ranges and Incorporates Impact of Decision to Discontinue Global Development of Bococizumab
Pfizer Inc. (PFE) (NYSE: PFE) reported financial results for third-quarter 2016 and narrowed certain 2016 financial guidance ranges.
On September 3, 2015, Pfizer acquired Hospira, Inc. (HSP) (Hospira). Consequently, financial results for the third quarter and first nine months of 2016 include legacy Hospira global operations while financial results for the third quarter and first nine months of 2015 include only one month of legacy Hospira U.S. operations but no financial results from legacy Hospira international operations(3).
On June 24, 2016, Pfizer acquired Anacor Pharmaceuticals, Inc. (ANAC). Therefore, financial results for the third quarter and first nine months of 2016 reflect approximately three months of legacy Anacor operations, which were immaterial.
On September 28, 2016, Pfizer acquired Medivation, Inc. (MDVN) (Medivation). Therefore, financial results for the third quarter and first nine months of 2016 reflect three business days of legacy Medivation operations, which were immaterial.
The Company manages its commercial operations through two distinct businesses: Pfizer Innovative Health (IH)(4) (formerly the Innovative Products business) and Pfizer Essential Health (EH)(4)(5) (formerly the Established Products business). Financial results for each of these businesses are presented in the Operating Segment Information section located at the hyperlink below.
Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts. References to operational variances(6) pertain to period-over-period growth rates that exclude the impact of foreign exchange as well as the negative currency impact related to Venezuela.
Ian Read, Chairman and Chief Executive Officer, stated, “Our business continues to perform well as demonstrated by the quarter’s financial results. Our Innovative Health business executed strongly behind the latest product launches, and our two recent acquisitions — Medivation and Anacor — are providing new near-term opportunities to potentially drive incremental growth for the business as its product pipeline continues to mature. We see this business as highly focused on those therapeutic areas where it is best positioned to deliver value to patients.
“Within the Essential Health business we continued to refine the portfolio with the announced acquisition of the small molecule anti-infectives franchise from AstraZeneca and the announced sale of the Hospira infusion systems portfolio to ICU Medical. In addition, later this month we will begin shipping Inflectra, a biosimilar to Remicade®(8) that will be the first biosimilar monoclonal antibody to be available in the U.S. We remain confident that we will be well-positioned in the emerging biosimilars market with our broad pipeline. With continued strength in emerging markets, the sterile injectables business and the biosimilars portfolio, we anticipate the Essential Health business will be able to transition to a modest revenue growth business on an overall portfolio basis.
“By maintaining our overall high level of financial flexibility and discipline, we are in a strong position to support the strategic initiatives for each business and will remain opportunistic to business development activity in addition to continuing to actively manage our cost structure,” Mr. Read concluded.
Frank D’Amelio, Chief Financial Officer, stated, “Overall, I am pleased with our third-quarter 2016 financial results and with our ability to continue delivering shareholder value through prudent capital allocation. We grew revenues by 3% operationally, excluding the impact of foreign exchange and legacy Hospira operations. We also continued to deliver significant value directly to shareholders by returning $10.5 billion to shareholders through dividends and share repurchases in the first nine months of 2016, including the completion of a $5 billion accelerated share repurchase agreement in June 2016. Additionally, we announced and completed the acquisition of Medivation in the third quarter of 2016.
“We raised the midpoint of the range for our 2016 Revenue guidance primarily to reflect our strong performance to date and the inclusion of legacy Medivation operations in fourth-quarter 2016. The midpoint of our range for our 2016 Adjusted Diluted EPS(2) guidance was negatively impacted solely due to our decision to discontinue development of bococizumab. Excluding this impact, the midpoint of our range for our 2016 Adjusted Diluted EPS(2) guidance would have increased by $0.02,” Mr. D’Amelio concluded.
QUARTERLY FINANCIAL HIGHLIGHTS (Third-Quarter 2016 vs. Third-Quarter 2015)
Third-quarter 2016 revenues totaled $13.0 billion, an increase of $957 million, or 8% compared to the prior-year quarter, reflecting operational growth of $1.2 billion, or 10%, partially offset by the unfavorable impact of foreign exchange of $224 million, or 2%. Excluding the third-quarter 2015 and 2016 contributions from legacy Hospira operations and foreign exchange, Pfizer-standalone revenues increased by $381 million operationally, or 3%.
Innovative Health Highlights
IH delivered strong revenue growth again this quarter, up 10% operationally, driven by continued growth from key brands including Ibrance, primarily in the U.S., Eliquis globally as well as Xeljanz, Lyrica and Chantix/Champix, all primarily in the U.S. Compared to the year-ago quarter, Ibrance revenue more than doubled while global operational revenue growth for Eliquis and Xeljanz was 92% and 86%, respectively.
This strong third-quarter 2016 operational performance was achieved despite the loss of Rebif alliance revenue compared to the prior-year quarter due to the year-end 2015 expiry of the collaboration agreement to co-promote Rebif in the U.S. as well as lower revenues for Enbrel in most developed Europe markets, primarily due to biosimilar competition.
Global Prevnar/Prevenar 13 revenues were down 2% operationally. In the U.S., Prevnar 13 revenues decreased 3% driven by an expected decline in revenues for the Adult indication due to a high initial capture rate of the eligible population following its successful fourth-quarter 2014 launch, which resulted in a smaller remaining “catch up” opportunity compared to the prior-year quarter, partially offset by the impact of favorable timing of government purchases for the pediatric indication. Internationally, Prevenar 13 revenues grew 1% operationally driven by a modest increase in uptake for the Adult indication.
Essential Health Highlights
EH revenues increased 10% operationally, primarily due to the inclusion of legacy Hospira operations, and to a lesser extent, the performance of the EH Standalone Sterile Injectables(9) portfolio, partially offset by the loss of exclusivity and associated generic competition for certain Peri-LOE products(9), primarily Lyrica and Zyvox, both primarily in most developed Europe markets.
Revenues excluding the contribution from the legacy Hospira portfolio (EH Standalone) declined 5% operationally, reflecting a 15% operational decline from the Peri-LOE Products(9) portfolio and a 4% operational decline from the EH Standalone Legacy Established Products(9) portfolio, partially offset by 7% operational growth from the EH Standalone Sterile Injectable Pharmaceuticals(9) portfolio.
EH revenues in emerging markets increased 9% operationally, primarily driven by the inclusion of legacy Hospira operations as well as 20% operational growth from the EH Standalone Sterile Injectable Pharmaceuticals(9) portfolio and 3% operational growth from the EH Standalone Legacy Established Products(9) portfolio.
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