Nestle helps Pfizer post sweet profit gain
The $11.5 billion that Nestle paid for Pfizer Inc.'s nutrition business helped the pharmaceutical giant record a quadrupling of its profits in the fourth quarter, the company reported Tuesday.
Pfizer's gain from the sale of the nutrition unit was placed at $4.8 billion, and its quarterly profit rose to $6.3 billion, both above Wall Street expectations. The quarterly profit compared with a gain of $1.4 billion in the same period last year.
"We are focused on the right areas and are making visible progress," Ian Read, Pfizer's chairman and chief executive, said in a webcast shortly after the quarterly report was released.
Among the new drugs that Read touted during his meeting with Wall Street analysts was the rheumatoid arthritis pill Xeljanz, developed by scientists in Groton and launched by the company as an option for methotrexate, the typical treatment.
"We're off to a very good start," said Geno Germano, president and general manager of Pfizer's specialty care and oncology divisions.
In its guidance for 2013, Pfizer said its projected R&D expenses would be $6.5 billion to $7 billion, a bit less than the $7.3 billion it spent last year.
"I believe we are entering 2013 with one of the most robust pipelines in the company's recent history," Read said.
For the full year, Pfizer's revenues in the United States were down 14 percent compared with 2011, mostly due to the loss of patent protection for cholesterol medicine Lipitor. International revenues, which account for 61 percent of the company's total (a two-point increase from the previous year), fell 6 percent.
The results were greeted favorably on the New York Stock Exchange, where Pfizer gained more than 3 percent to finish the day at $27.70 a share, near a seven-year high. Pfizer said its stock buyback program and dividends returned nearly $15 billion to stock owners.
Pain medication Lyrica emerged as the company's leading product last year, with $1.1 billion in sales during the fourth quarter alone. Lipitor, by contrast, had $584 million in sales.
Read addressed several questions about a possible breakup of Pfizer into two separate companies - one in innovative research and the other selling generics - and did nothing to dispel the idea that another spinoff could be in the cards. He said the company has already separated the business into two components in developed markets such as the United States, but will retain joint operations in emerging markets until the time is right for a split.
"I believe at some point the markets will separate globally and there will be an innovative market distinct from an established market," he said, "and I think Pfizer will continue to evolve into being managed that way."
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