UPDATE 4-Pfizer sales lag, hurt by generic Lipitor, Effexor

* Q3 sales $16.17 billion, vs forecast of $16.68 billion

* Q3 EPS excluding items $0.54 vs $0.51 forecast

* Generics, weak emerging market sales hurt results

* Shares fall 1.1 percent
(Adds company, analyst comments)

By Ransdell Pierson

NEW YORK, Nov 2 (BestGrowthStock) – Pfizer Inc reported
disappointing sales on Tuesday, hurt by generic competition for
its Lipitor cholesterol fighter and Effexor XR depression drug
as well as weak revenue in emerging markets.

The last of the large U.S. drugmakers to report
third-quarter earnings, Pfizer (PFE.N: ) followed the example of
most rivals with higher-than-expected profits — largely from
cost cuts — but disappointing sales.

“Generic competition is causing pain, and this is just a
taste of what Pfizer will be going through in the next few
years,” said Morningstar analyst Damien Conover.

Pfizer, whose shares fell more than 1 percent, said global
sales of Lipitor fell 11 percent to $2.53 billion in the
quarter. The arrival in recent months of Lipitor generics in
Canada and Spain hurt the world’s top-selling medicine.

The bigger threat to Pfizer comes in November 2011, when
Lipitor loses U.S. marketing exclusivity. Pfizer bought Wyeth
last year for $67 billion to replace vanishing Lipitor revenue
with brands from its former U.S. rival.

More than a half dozen other Pfizer drugs also lose U.S.
patent protection in the next few years, including impotence
treatment Viagra and Xalatan for glaucoma.

Effexor XR, a Wyeth anti-depressant that once had annual
sales of $3 billion, was battered by cheaper U.S. generic
versions launched over the summer. Sales of the pill plunged to
$175 million in the third quarter.

“As with the rest of the industry, patent losses are
hurting the bottom line, and it’s always especially tricky to
gauge the real magnitude of patent erosion in overseas
markets,” Conover said.


The world’s biggest drugmaker is also counting heavily on
fast-growing emerging markets to bolster results in coming
years. But its sales in those markets, excluding the Wyeth
brands, were essentially flat in the quarter.

“The flat growth rate was due to inventory adjustments,
principally in Russia and other parts of Eastern Europe,” Ian
Read, head of Pfizer pharmaceuticals, said in an interview.

Although inventory changes cause Pfizer’s emerging market
sales to bounce around from quarter to quarter, the company
said the sales have risen 6 percent for the year to date and
the longer-term trend continues to look bright.

Pfizer’s net earnings fell to $866 million, or 11 cents per
share, from $2.88 billion, or 43 cents, a year earlier.

Excluding merger costs and other special items, Pfizer
earned 54 cents per share. Analysts on average expected 51
cents, according to Thomson Reuters I/B/E/S.

The company took a $701 million charge in the quarter for
asbestos litigation involving its Quigley Co subsidiary.

Global revenue rose 39 percent to $16.17 billion, swelled
by the addition of Wyeth products, but would have risen 40
percent if not for the stronger dollar, which lowers the value
of sales in overseas markets.

Sales lagged the consensus Wall Street forecast of $16.68
billion — in contrast to the second quarter, when a weaker
dollar helped Pfizer trounce analysts’ sales estimates.

Pfizer raised its full-year 2010 profit forecast to between
$2.17 and $2.22 per share, from its prior view of up to $2.20.

The company stuck to its 2012 outlook of $2.25 to $2.35 per
share, which suggests stability during the first full year
after Lipitor goes generic in the United States.

But Edward Jones analyst Linda Bannister said the decline
of Pfizer shares on Tuesday suggests skepticism the company
will emerge so intact from its ongoing patent cliff.

“There’s uncertainty whether they’ll deliver, and how
they’re going to get there,” Bannister said.

Pfizer shares are down 4.5 percent for the year to date,
versus a slight gain for the drug group. They are trading at 8
times expected 2011 per share earnings, a considerable discount
to most U.S. rivals.

Shares of Pfizer were down 19 cents to $17.43 in late
afternoon trading on the New York Stock Exchange, compared with
moderate gains for the drug sector.
(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn, Derek
Caney, Maureen Bavdek and Robert MacMillan)

UPDATE 4-Pfizer sales lag, hurt by generic Lipitor, Effexor