Pfizer CFO defends spending as path to growth

By Ransdell Pierson

NEW YORK (BestGrowthStock) – Increased expenses hurt Pfizer’s fourth-quarter earnings and are expected to weigh on results through 2012, but company Chief Financial Officer Frank D’Amelio said responsible spending is helping build demand for its medicines in developed and emerging markets.

“We’re clearly spending, with all the capital discipline we always have, because we see opportunities to grow the business,” D’Amelio said in an interview.

Pfizer shares fell as much as 3.3 percent on Wednesday after fourth-quarter earnings failed to match analysts’ forecasts and the company projected results this year and in 2012 below expectations — shortfalls that analysts ascribed largely to ramped up spending.

D’Amelio cited fourth-quarter spending to license drugs and to advertise medicines used by U.S. primary care doctors, such as nerve-pain treatment Lyrica, and Lipitor — the world’s top-selling cholesterol fighter which begins facing generic competition in late 2011.

“We increased our marketing expenses in emerging markets,” he said, with good results for Pfizer brands that didn’t come from the company’s recent purchase of Wyeth. “It’s the first quarter where that unit had double-digit (sales) growth. Clearly we think the incremental investment contributed to that.”

“We reported very strong double-digit growth in Brazil, Russia, India and China,” he said.

Pfizer said it expects spending this year of $19 billion to $20 billion for sales, general and administrative expenses, about $2 billion more than Leerink Swann analyst Seamus Fernandez had contemplated.

D’Amelio said Pfizer, the world’s biggest drugmaker, believes the investments will pay off, as it strives to expand deeper into existing markets and enter new ones.

“Relative to 2010 spending, the most important thing is that we see opportunities to invest in the business. We can grow not just in 2010, but in 2012 and beyond.”

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(Reporting by Ransdell Pierson; editing by Carol Bishopric)

Pfizer CFO defends spending as path to growth