Pfizer Inc reported better-than-expected quarterly results, driven by lower taxes and sales of generic medicines, but revenue from its branded patent-protected medicines brought disappointment.
The largest U.S. drugmaker did not offer any hints on whether it plans to split into two separate companies, a long-mulled potential decision that has kept investors in suspense.
Pfizer, whose shares fell 2.3 percent in morning trading, said second quarter revenue rose 11 percent to $13.15 billion, topping the average analyst estimate of $13.01 billion.
Sales of generic medicines rose 16 percent to $6.04 billion, helped by Pfizer's $16 billion purchase last year of generic hospital products company Hospira.
Although generics beat expectations, BMO Capital Markets analyst Alex Arfaei said sales of Hospira products, at $1.14 billion, were 7 percent below his forecast, and suggested "limited revenue synergies" from that acquisition.
Sales of Pfizer's patent-protected drugs rose 7 percent to $7.11 billion, 2 percent below Arfaei's estimate.
Higher sales of nerve-pain drug Lyrica helped offset disappointing sales of its Prevnar vaccine for pneumococcal infections.
In April, Pfizer terminated a $160 billion deal to acquire Irish drugmaker Allergan Plc after the U.S. Treasury Department issued new rules restricting tax inversion transactions aimed at slashing taxes.
With collapse of the deal, investors have shifted their focus to whether Pfizer will break up, creating one company specializing in patent-protected drugs and another geared toward branded generic drugs.
Pfizer for several years has weighed whether such a split makes sense, largely because its patent-protected medicines routinely enjoy sales growth, while its portfolio of generics usually post declines.
Pfizer Chief Executive Officer Ian Read on Tuesday said the company will decide by year end. "We're presenting all the pros and cons to our board."
The company's new breast cancer treatment, Ibrance, generated sales of $514 million, exceeding Evercore ISI's forecast of $496 million.
Pfizer earned 64 cents per share, excluding special items, beating the average analyst estimate by 2 cents.
Net income fell to $2.02 billion, or 33 cents per share, from $2.63 billion, or 42 cents per share, hurt by restructuring charges and acquisition costs.
Pfizer reaffirmed it expects 2016 earnings of $2.38 to $2.48 per share. It earned $2.20 per share in 2015.
Separately, the company on Tuesday said it had reached a $486 million settlement of shareholder litigation accusing it of causing big losses for shareholders by concealing safety risks of its Celebrex and Bextra pain-relieving drugs.
(Reuters)
