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Pfizer (PFE) Replies |
HenryTo
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Joined: 06 Aug 2004
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Location: Los Angeles, California
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 Posted: Tue May 01, 2012 3:41 pm Post subject: |
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Morningstar on PFE's 1Q earnings.
| Quote: | | Pfizer PFE reported in-line first-quarter results that largely matched our expectations and slightly exceeded consensus projections. We don't expect any changes to our fair value estimate of $27 per share based on the results. We continue to view Pfizer as undervalued as the investment community appears distracted by the major patent losses and potentially underappreciates Pfizer's strong pipeline and ability to cut costs, as seen in the first-quarter results. In the quarter, total sales fell 6% operationally versus the prior-year period as generic competition (most notably to cholesterol lower Lipitor) weighed on growth. We e xpect similar negative growth for the company through the remainder of the year as the Lipitor patent loss will be annualized in the fourth quarter this year. Beyond 2012, the patent losses become much more manageable, and while we don't project robust growth for the company following 2012, the top line should begin to stabilize and post low growth starting in 2013 as new products launch. We believe pipeline drugs Eliquis for atrial fibrillation and tofacitinib for rheumatoid arthritis hold the most upside. Earnings per share declined 3% year over year as the company is controlling costs well. Despite the loss of high-margin sales from Lipitor, the company's operating costs as a percentage of sales fell more than 100 basis points year over year. This cost control is running slightly ahead of our expectations and could cause Pfizer to raise its 2012 guidance next quarter. More important, we believe the strong cost controls support the long-term investment thesis for the company. As a result of the sale of the nutritional business, Pfizer reduced its full-year earnings per share guidance range 3% to $2.14-$2.24, which we expect it to beat. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Jan 31, 2012 2:48 pm Post subject: |
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Morningstar on PFE's 4Q earnings.
| Quote: | | Pfizer PFE reported fourth-quarter results that largely matched our expectations, and we don't expect any changes to our fair value estimate. In the quarter, total sales decreased operationally 5% year over year as patent expirations on several drugs including cholesterol-lowering drug Lipitor weighed on growth. However, Pfizer posted 6% earnings per share growth, helped by share repurchases and cost cutting. The company fine-tuned its 2012 EPS guidance to $2.20-$2.30 from $2.25-$2.35, largely because of the impact of foreign exchange rates. We expect it will meet this guidance. We expect the top-line declines seen in the quarter to continue throughout 2012 as patent losses on several blockbuster drugs take their toll. Outside the recent patent loss on Lipitor, the 2012 patent loss on antipsychotic Geodon in 2012 will also weigh on near-term growth. Further, several other key drugs that lost patent protection in 2011 will continue to depress 2012 growth. Pfizer is adapting to the patent losses by greatly improving its pipeline and aggressively cutting costs. While Pfizer lacks a pipeline to completely offset the patent losses in the near term, three new drug launches between 2011 and 2012 could reshape its growth trajectory, including Xalkori for cancer, tofacitinib for rheumatoid arthritis, and Eliquis for atrial fibrillation. We are particularity optimistic about Eliquis as the drug recently received a priority review from the Food and Drug Administration despite other drugs already approved for atrial fibrillation. We project an 80% chance of approval for the drug and close to $3 billion in peak sales. However, Pfizer shares the profits of the drug with Bristol-Myers BMY, which lowers the drug's contribution to Pfizer. Pfizer cont inues to aggressively cut expenses. As a percentage of total sales, operating costs fell more than 400 basis points from the prior-year period. We expect this trend to continue into 2012. Further, we believe the company remains on track to achieve its goal of cutting $4 billion annually in 2012. Lastly, regarding the divestitures of the animal health and nutritional segments, we expect Pfizer to finalize its plans later in 2012. We value the animal health and nutritional businesses at $11 billion and $7 billion, respectively. We expect several suitors for both business lines, but also see a spin-off or split-off as potentially more likely to avoid the tax consequences of selling the units. We estimate a 7% increase in 2012 EPS if proceeds went toward buybacks. |
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rffrydr
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Joined: 30 Oct 2005
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Location: Sunny California
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HenryTo
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Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
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| Posted: Wed Nov 02, 2011 12:00 am Post subject: |
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Morningstar on PFE's 3Q earnings:
| Quote: | | Pfizer PFE reported strong third-quarter results that slightly exceeded our expectations. However, we don't expect to change our fair value estimate based on the minor outperformance. Total sales increased 1% operationally versus the prior-year period as growth in emerging markets and likely pricing increases in the United States helped offset increased generic competition. Earnings per share grew 15% year over year as cost-containment initiatives increased productivity. Pfizer increased its full-year earnings per share guidance to $2.24-$2.29 from $2.16-$2.26. We expect the quarter's strong sales growth in emerging markets will continue partly mitigating the company's patent cliff over the next several years. With an estimated 80% correlation between personal incomes and drug spending, the significant increase in emerging markets' wealth is driving growth in these markets for Pfizer. Sales in emerging markets now represent 14% of total sales, up from less than approximately 5% a decade ago. We expect continued steady growth in these markets over the next several years as brand name plays a much larger role than patents in these geographies. As Pfizer begins the worst of its patent losses next quarter with the loss of Lipitor, we expect emerging markets will help mitigate the headwinds in developed markets that are highly dependent on patent protection. Further supporting Pfizer in its patent cliff, the pipeline is yielding a potentially next generation of blockbusters. While Pfizer lacks the pipeline to completely offset its patent losses in the near term, four key new drug launches in 2011-12, including Xalkori and axitinib for cancer, tofacitinib for rheumatoid arthritis, and Eliquis for atrial fibrillation, could reshape the comp any's growth trajectory. In particular, Eliquis looks to be best in class in a likely multi-billion-dollar new therapeutic opportunity. Pfizer is improving its cost structure in advance of the worst of its patent cliff, which should help reduce the impact of losing very high-margin drugs like Lipitor. As a percentage of total sales, operating costs fell almost 300 basis points year over year as Pfizer has reduced its U.S. workforce and promotion spending largely around products losing patent protection. We forecast this trend to continue as we expect Pfizer will reach its cost-saving goal of $4 billion annually by 2012. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu May 05, 2011 1:56 am Post subject: |
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Morningstar on PFE's 1Q earnings:
| Quote: | | Pfizer PFE reported first-quarter results that largely matched our expectations, and we don't anticipate any changes to our fair value estimate. Excluding the impact of foreign exchange rates, total sales fell 1% year over year as patent losses weighed on overall growth. Earnings per share growth was flat with the prior-year period as increased share buybacks helped offset minor cost increases. Pfizer confirmed its full-year EPS guidance of $2.16-$2.26, which we expect it to meet. Pfizer's diversified portfolio of drugs helped offset generic competition to several key drugs. In particular, the patent loss on antidepressant Ef fexor and international patent losses on cholesterol-lowering drug Lipitor caused close to a 5% drop in total sales for the company. Despite this hit, several of Pfizer's remaining drugs, including neuroscience drug Lyrica and vaccine Prevnar 13, posted steady growth, helping to offset the patent losses. We expect this trend to continue through 2012 as Pfizer faces several more patent losses. While Pfizer lacks a pipeline to completely offset its significant patent cliff (Lipitor, Viagra, Xalatan, and Geodon all beginning in 2011), three key new drug launches in between 2011 and 2012--ALK inhibitor for cancer with an 85% chance of approval, JAK inhibitor for rheumatoid arthritis (55%), and apixaban for cardiovascular disease (60%)--could reshape the company's growth trajectory. We expect key data for apixaban's use in atrial fibrillation in the second quarter, and on the basis of earlier studies, we expect good results. Cost-cutting and share repurchases are mitigating the c ost impact of the loss of high-margin drugs. As a percentage of total sales, operating costs increased about 20 basis points year over year. Given the increased costs of U.S. health-care reform and the patent losses, we believe Pfizer is improving its operating structure and will hit its target of $4 billion in annual cost savings from the Wyeth acquisition by 2012. Additionally, Pfizer repurchased $2.2 billion of shares in the first quarter, reducing its share count and improving EPS growth about 1% year over year. Pfizer increased its 2011 outlook for share repurchases to $5 billion-$7 billion from $5 billion, which we believe is partly fueled by the $2.4 billion sale of the company's Capsugel business. |
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HenryTo
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Posts: 11742
Location: Los Angeles, California
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| Posted: Wed Feb 02, 2011 1:18 am Post subject: |
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Morningstar on PFE's 4Q earnings:
| Quote: | | Pfizer PFE reported fourth-quarter results that largely matched our expectations, and we don't expect any changes to our fair value estimate.The firm also issued its new outlook for 2011 and updated its 2012 projections. For 2011, Pfizer expects earnings per share of $2.16-$2.26, in line with our $2.24 estimate and slightly below consensus. For 2012, the company reiterated its earnings per share estimate range of $2.25-$2.35 and lowered its revenue outlook by 3% to $63 billion-$65.5 billion because of the exclusion of acquisition assumptions. While we expect it will reach its revenue target in 2012, we believe Pfizer may have trouble reaching its earnings target. In his first quarterly review since taking over as CEO, Ian Read appears to be making good business decisions for the company. We believe the recently announced $5 billion stock-repurchase program for 2011 is a good use of capital, given Pfizer's low valuation, and it signals that management believes the stock is undervalued. The stock-repurchase program also should help mitigate the earnings per share hit in 2011 caused by the patent loss on Lipitor. Additionally, Pfizer is reducing its planned research and development spending by almost 20%, partly via outsourcing. We believe the low productivity from Pfizer's labs warrants the move. Also, we think Pfizer can use contract research organizations to a much higher degree, which should lower R&D costs with limited impact on the pipeline. Read is still undergoing a review of Pfizer's overall portfolio to determine the optimal mix of the business. If any segments were sold or spun off, we believe value would probably be unlocked for shareholders, as the valuations for several of the company's strong business lines are weighed do wn by Pfizer's severe patent cliff. Fourth-quarter results were largely in line with our expectations. Sales increased operationally by 7% year over year, as the Wyeth acquisition drove all the growth. Excluding Wyeth, sales would have declined 7% from the prior-year period, partly because of international patent losses on cholesterol-lowering drug Lipitor. We expect sales will continue to be under pressure over the next several quarters as more geographic areas face generic Lipitor competition and other key drugs lose patent protection. Earnings per share declined 4% as the higher share count and costs related to Wyeth acquisition weighed on earnings growth. We expect sales and earnings growth will be more closely aligned in the next several quarters, as major cost-cutting initiatives should help mitigate the patent losses on high-margin branded drugs. |
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HenryTo
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Posts: 11742
Location: Los Angeles, California
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| Posted: Mon Dec 06, 2010 12:20 pm Post subject: |
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Morningstar on PFE's new CEO:
| Quote: | | In a surprising move, Pfizer PFE appointed Ian Read as its new CEO replacing Jeff Kindler, who decided to retire for personal reasons. While Kindler's abrupt department raises a few red flags, we don't expect any changes to Pfizer's fair value estimate. We believe Ian Read's more than 30 years of experience at the company and his most recent appointment as the leader of the worldwide biopharmaceuticals business position him well for the top stop. Based on strong cost cutting through 2010, we expect that Pfizer will maintain its long-term guidance for 2012, including earnings per share of $2.25-$2.35. While we continue to project organic earnings slightly below this guidance, another acquisition similar to King Pharmaceuticals KG could boost our estimates in line with management's guidance. We expect that Read will likely lead the company through another bolt-on acquisition and continue to rapidly cut costs over the next two years. Additionally, as a new CEO, Read holds the opportunity to more aggressively use Pfizer's stockpile of cash (more than $22 billion) for dividends and share repurchases, which could make the stock more attractive. |
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HenryTo
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| Posted: Tue Nov 02, 2010 10:56 am Post subject: |
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Morningstar on PFE's 3Q results:
| Quote: | | Pfizer PFE reported third-quarter results that slightly exceeded our expectations, thanks to strong cost-cutting. However, we don't expect any changes to our fair value estimate for the company on the basis of this minor outperformance. The top line grew 39% year over year, which was 2% below our expectations and largely driven by the Wyeth acquisition. Excluding Wyeth products and the impact of foreign exchange rates, total sales decreased 4% from the prior-year period as international patent losses on Lipitor weighed on growth. Earnings per share increased 6% year over year, 8% above our expectations. Pfizer continues to cu t costs faster than we had anticipated. Pfizer increased its 2010 EPS guidance range 2% to $2.17-$2.22, which we expect it will easily meet. Patent losses created a drag in the quarter, and this will probably get much worse in 2011 and 2012. The company's top drug Lipitor fell operationally by 10% year over year as patent losses in Spain and Canada caused the bulk of the losses. The July patent loss on antidepressant drug Effexor also hurt sales growth. We expect further top-line weakness in 2011 and 2012 as a result of patent losses on erectile dysfunction drug Viagra, ophthalmology drug Xalatan, antipsychotic drug Geodon, and Lipitor in most major markets. Despite the major patent losses, we believe Pfizer's valuation already incorporates these losses and underappreciates the company's cost-cutting plans, pipeline, and growth potential in emerging markets. Pfizer is cutting cuts quicker than we anticipated, and we plan to reduce our expense projections for the company over the next two years. As a percentage of total sales, operating costs increased just over 300 basis points sequentially, almost 300 basis points below our expectations. Given the loss of exclusivity for the high-margin drug Effexor in the quarter, we had expected much higher margin erosion. However, Pfizer was able to quickly adapt and mitigate the margin impact. We believe this bodes well for the firm as it approaches several more patent losses over the next two years. |
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Roger
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Joined: 15 Feb 2009
Posts: 2
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| Posted: Mon Feb 16, 2009 4:01 am Post subject: |
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Hi rffrydr
| Quote: | Welcome.
You have any ideas on Obama's plan to offshore drug supply to this queen-bee market might impact those buyouts? |
Thank you.
I'm sorry. I have no real insights in this. Being from holland I am not that specific up to date on the new plans.
But I expect a lot of acquisitions, especially by the big ones. Pfizer definitely needs new technologies and patents. I think a lot of these small biotech firms will be target. In holland we have quite some of these (like: crucell, galapagos, pharming). Wyeth wanted to acquire crucell lately, which cancelled because pfizer wants Wyeth.
What the effects are for the stock pfizer, I am not sure. I looked briefly into Pfizer but wasnt that enthusiastic about it. I am always pessimistic about acquisitions regarding the bidder. But in this case a lot of cash could be used, which is definiteley better.
Regarding the sector I would prefer JNJ. This stock is more diversified, and relies less strongly on patents. I think JNJ will also participate in this consolidation wave, and JNJ also has plenty cash. |
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rffrydr
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Joined: 30 Oct 2005
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Location: Sunny California
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| Posted: Sun Feb 15, 2009 1:37 pm Post subject: |
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Welcome.
You have any ideas on Obama's plan to offshore drug supply to this queen-bee market might impact those buyouts?
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Today is the Tomorrow you worried about Yesterday! |
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Roger
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Joined: 15 Feb 2009
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| Posted: Sun Feb 15, 2009 12:29 pm Post subject: |
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This is my first post here. I am from Holland. I hope to contribute to this forum with good posts.
Regarding pfizer. Ive read some things about pfizer lateley.
In the first place a lot of patents will mature the coming 5 years. This is happening for many big pharma companies, but pfizer loses the most. 36% of the revenue of pfizer stems from patented products.
Another important fact is the enormous cash position of pfizer (26billion!).
The big pharma companies lacked to invest in new patents last years. Only alternative for them is to buy other firms (who did invest in new patents). Companies who did invest a lot in new patents are small biotech firms. I expect a huge wave of consolidation here. |
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rffrydr
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| Posted: Mon Jan 26, 2009 9:44 am Post subject: |
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The customary selloff on Wyeth acquisition should be bought. Job cuts and plant closures are the name of the game--a synergy that NEVER fails.
Highly symbolic: NO M&A has meant NO investment banking. Maybe there is a spark here.
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idiotinc
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Joined: 17 Sep 2008
Posts: 9
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| Posted: Tue Sep 30, 2008 12:37 pm Post subject: Pfizer drug research pipeline |
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In case anyone is interested, here's a company memo sent from Pfizer's head of development that discusses in detail what drugs the company will be cutting research for, and which ones it will focus on. http://idiotinc.com/company-memos/pfizer-research-memo/
Here are the disease areas they intend to "exit" : Anemia, Atherosclerosis/Hyperlipidemia, Bone Health/Frailty, GI, Heart Failure, Liver Fibrosis, Muscle, Obesity, Osteoarthritis (disease modifying concepts only) and Peripheral Arterial Disease.
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Idiot Inc - Ruthless coverage of bad business news |
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Suomodo
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Joined: 21 Mar 2008
Posts: 195
Location: Bratislava, Slovakia
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| Posted: Thu Jun 05, 2008 2:31 pm Post subject: |
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I was also attracted by the yield and P/E of Pfizer, so I took a closer look. The major problem is they have nothing to replace Lipitor and Norvasc. All new drugs they introduced are far far away from blockbusters. (Actualy blockbuster drugs are dead for a foreseable future of 3-5 years IMHO.)
So when Lipitor patent finishes they go 25% down with sales immediately (its abut 1/3 of their sales if I remember it right) and when patent ends sales are typically 90% down of that drug in that particular year...
Pfizer was strong in Cardiology, but the potential in this area is almost fully filled nowadays.... Guidelines even today recomend 4-6 drugs for major diseases in this field.... you can hardly go higher with more drugs, you can hardly show in a study to be able to decrease mortality risk further down from 0,1%. And cardiologists are very expensive, spoiled by the past studies.. so its extremely expensive..
Neurology/psychiatry is not a big field these days...
So PFE is not a growth play.
Only thing they can do is go shopping... but 1) it is not that cheap to build a sales network in a completely new field...2) blockbuster is dead, so you have to buy dozens of molecules |
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HenryTo
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Posts: 11742
Location: Los Angeles, California
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| Posted: Thu Jun 05, 2008 9:55 am Post subject: |
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PFE falls to a new 10-year low on this latest downgrade:
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Goldman Sachs downgrades Pfizer to neutral
Thu Jun 5, 2008 9:44am EDT
June 5 (Reuters) - Goldman Sachs downgraded Pfizer Inc (PFE.N: Quote, Profile, Research) and removed the world's biggest drug maker from its Americas conviction list, citing the stock's underperformance and said it does not expect near-term catalysts to drive valuation.
The brokerage, which cut its rating on Pfizer to "neutral" from "buy," said the company's share price has fallen 28.7 percent since Jan. 4, 2007, versus a 2.9 percent decline in the Standard & Poor's 500 Index and a 20.4 percent fall in its coverage universe.
Goldman said it cut its price target on Pfizer to $22 from $26 as near-term pipeline products decrease in value and recent safety issues pressure the brokerage's forecasts for the company's anti-smoking drug Chantix and cancer drug Sutent.
Researchers had recently said hundreds of patients taking Chantix reported serious accidents, vision problems and heart trouble, while some patients who took Sutent, a pill used to treat kidney and stomach cancers, developed heart failure.
Goldman added Eli Lilly and Co (LLY.N: Quote, Profile, Research) to the Americas conviction list and retained its "buy" rating on the stock. However, it lowered its price target on the stock by $2 to $58, reflecting multiple contraction in the sector.
The brokerage said it upgraded Schering-Plough Corp (SGP.N: Quote, Profile, Research) to "buy" from "neutral" as new pipeline additions have raised its risk-adjusted sales estimates. Goldman raised its price target on Wyeth (WYE.N: Quote, Profile, Research), which it rates "neutral," to $50 from $48. The brokerage cut its price targets on Merck & Co (MRK.N: Quote, Profile, Research) to $43 from $48 and on Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research) to $24.50 from $28, while keeping its "neutral" rating on both the stocks. |
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