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Pfizer expects broad interest for consumer health business

Pfizer expects broad interest for consumer health business

New York: Pfizer Inc, the largest U.S. drugmaker, expects no shortage of suitors for its consumer health business and said it would decide whether to sell, spin-off or retain the unit next year.

The business, with brands such as pain drug Advil, Centrum multivitamins, and Chapstick lip balm, had sales of about $3.4 billion in 2016.

“We expect broad interest from potential acquirers,” Chief Executive Ian Read said on Tuesday after the company reported its third-quarter results.

Supply problems related to sterile injectable products acquired in Pfizer’s purchase of Hospira, along with steep declines in sales of off-patent products, contributed to an 11 percent drop in third-quarter revenue from the Essential Health unit to $5.05 billion.

Pfizer said the supply challenges would have a negative impact of “several hundred million dollars” this year, moderating in 2018.

Pfizer shares were off 0.7 percent at $34.90 shortly after midday.

SunTrust Robinson Humphrey analyst John Boris said Essential Health was “under pressure” and that investors were concerned about new competitors grabbing sterile injectables market share before Pfizer’s manufacturing challenges are fully addressed.

Pfizer said all of its 2,000 Puerto Rico-based employees were safe and that it had made significant progress in dealing with damage to its three manufacturing plants on the island devastated by hurricane Maria last month.

Chief Financial Officer Frank D‘Amelio said the revenue impact from the storm was “expected to be insignificant.”

Innovative Health sales rose 11 percent in the quarter to $8.12 billion with strong contributions from its blockbuster pneumonia vaccine Prevnar and breast cancer drug Ibrance.

Prevnar sales declined 1 percent to $1.52 billion but topped analysts’ estimates of about $1.46 billion.

Ibrance sales surged nearly 60 percent to $878 million but fell short of lofty Wall Street expectations for $914 million.

Sales of rheumatoid arthritis drug Xeljanz rose 48 percent to $348 million but were held back in Europe, where the company is still negotiating reimbursement with several countries.

Pfizer sees additional sales growth with an expected approval in psoriatic arthritis and said it still expected new eczema cream Eucrisa to eventually reach annual sales exceeding $2 billion.

It also said it hoped a potential approval for Xtandi in non-metastatic prostate cancer based on recent data would provide a new growth ramp for that key medicine from its 2016 acquisition of Medivation.

The company raised the midpoint of its full-year adjusted earnings forecast by 3 cents to a range of $2.58 to $2.62 per share. It tightened its 2017 revenue forecast to $52.4 billion to $53.1 billion, from $52 billion to $54 billion.

Excluding items, Pfizer earned 67 cents per share for the quarter, beating analysts’ average estimates by 3 cents, according to Thomson Reuters I/B/E/S.

“We view these results as refreshingly boring. We think boring is a good thing right now,” Credit Suisse analyst Vamil Divan said in a client note.

The lack of drama was welcomed after several drugmakers this quarter spooked investors with new concerns over critical growth products, including Merck & Co, Celgene Corp, and Gilead Sciences Inc.

(Reporting by Bill Berkrot in New York and Akankshita Mukhopadhyay and Ankur Banerjee in Bengaluru; Editing by Savio D’Souza and Richard Chang)

Source: Reuters
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