WRAPUP 3-Drugmakers Pfizer, Roche disappoint with forecasts

* Pfizer Q4 misses, 2010 outlook short of analyst views

* Pfizer cuts 2012 profit, revenue targets

* Roche 2009 results short of estimates

* Pfizer shares fall 2.5 percent; Roche off 0.6 pct
(Adds Pfizer CFO comments)

By Ransdell Pierson and Lewis Krauskopf

NEW YORK, Feb 3 (BestGrowthStock) – Top global drugmakers Pfizer
Inc (PFE.N: ) and Roche Holding AG (ROG.VX: ) posted disappointing
profits and gave lackluster forecasts on Wednesday, sending
their shares lower.

The reports underscore a generally uninspiring results
season for the pharmaceutical industry, which is being squeezed
by the loss of patent protection on many previous blockbuster
drugs.

Pfizer, the world’s largest drugmaker, projected 2010
earnings below analysts’ average forecast, saying the
strengthening dollar would crimp earnings. [ID:nN02107070]

The company also cut its profit and revenue forecasts for
2012, when it will face generic rivals to cholesterol medicine
Lipitor. The U.S. patent on the world’s top-selling drug lapses
in November 2011.

Pfizer shares fell 2.5 percent to $18.59, and weighed on
the overall market [.N].

Investors “don’t so much like seeing the guidance coming
down but I think in the out year they have a good chance of
exceeding that,” said Tony Scherrer, portfolio manager at Smead
Capital Management, which holds about 340,000 Pfizer shares.

Roche missed full-year profit forecasts due to
disappointing sales of key cancer drugs. The Swiss drugmaker
confirmed its outlook for 2010 of double-digit earnings growth
but said sales would rise at a mid-single-digit rate, which
Bernstein analysts said was disappointing. [ID:nLDE6111JE]

Roche shares slipped 0.6 percent.

Last week, AstraZeneca Plc (AZN.L: ) warned that earnings
would fall this year and said it would slash an additional
8,000 jobs as it faces U.S. generic competition to two key
drugs. U.S. drugmakers Bristol-Myers Squibb Co (BMY.N: ) and Eli
Lilly and Co (LLY.N: ) forecast 2010 earnings to rise in line
with Wall Street estimates. [ID:nN28242426]
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For a graphic comparing Roche and Pfizer share moves, see:
http://graphics.thomsonreuters.com/0210/US_ROGPFE0210.gif

For a graphic on sales of key Roche cancer drugs:
http://graphics.thomsonreuters.com/0210/SW_RCH0210.gif
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PFIZER FALLS SHORT

New York-based Pfizer reported for the first time quarterly
results that included Wyeth, bought last year for $67 billion.

“We have made steady progress. One day does not make a
trend,” Chief Financial Officer Frank D’Amelio said in an
interview, referring to Wednesday’s decline in Pfizer shares.
[ID:nN03193682]

Pfizer reported a fourth-quarter profit (Read more your timing to make a profit.) of $767 million, or
10 cents per share, compared with $266 million, or 4 cents per
share, in the year-earlier period.

Excluding special items, Pfizer earned 49 cents per share,
a penny short of the average estimate of analysts, according to
Thomson Reuters I/B/E/S.

Pfizer’s revenue rose 34 percent to $16.5 billion, above
Wall Street expectations of $15.9 billion.

The company said it expects full-year 2010 earnings of
$2.10 to $2.20 per share. Analysts on average had expected
$2.27 per share. The strengthening dollar, which weakens the
value of overseas sales, will crimp earnings 6 cents per share
more than Pfizer had expected, the company said.

About 57 percent of Pfizer’s $50 billion in revenue last
year came from international markets.

“Overall, Pfizer’s business update was not what we hoped
for since we assumed more flexibility on costs (primarily
SG&A), non-operating expense, and viewed potential share
repurchase activity as upside,” Leerink Swann analyst Seamus
Fernandez said in a research note.

Global Lipitor sales rose 1 percent in the quarter to $3.18
billion, as moderate U.S. declines were offset by gains
overseas.

Sales of Lyrica — used to treat seizures, nerve pain and
fibromyalgia — rose 17 percent to $820 million. Sales of
impotence treatment Viagra rose 9 percent to $549 million.

Pfizer cut its 2012 revenue view to between $66 billion and
$68.5 billion, from a forecast of $70 billion provided a year
ago, in part due to a divestiture tied to the Wyeth deal.

Its 2012 profit outlook was cut to between $2.25 and $2.35
per share, excluding special items. A year ago, it had forecast
$2.42 per share.

Analysts said the disappointing profit forecasts in 2010
and 2012 were largely due to unexpectedly high spending. But
D’Amelio said increased spending to license products, as well
as to market and advertise them, is essential to build sales.

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

ROCHE ALSO DISAPPOINTS

Roche is better placed than many of its rivals, given its
limited exposure to generic competition, but it just missed on
profit forecasts.

Core earnings per share rose 10 percent in 2009 to 12.19
Swiss francs ($11.52), just behind the average forecast of
12.33 francs in a Reuters poll after big sellers Avastin,
MabThera and Herceptin netted less than expected.

Customers were working off surplus stock following its
buyout of U.S. biotech group Genentech, hurting sales, but
Roche expects that process to be finished by the end of 2009.

Roche raised its 2010 sales forecast for flu drug Tamiflu
to 1.2 billion from 700 million francs, in contrast to vaccine
makers, who will now make less money than expected as the swine
flu pandemic fades and countries cut orders.

Britain’s GlaxoSmithKline (GSK.L: ) will report
fourth-quarter earnings on Thursday and is expected to paint a
picture of a difficult year ahead.

Merck (MRK.N: ), which reports earnings on Feb. 16, may stand
out from peers with promising experimental drugs gained in its
$41 billion purchase of Schering-Plough. [ID:nN02115673]

Investment

(Additional reporting by Katie Reid and Sam Cage in Basel,
Switzerland, and Ben Hirschler in London; editing by Maureen
Bavdek, Gunna Dickson, Gary Hill)

WRAPUP 3-Drugmakers Pfizer, Roche disappoint with forecasts