, one of the nation's largest pharmaceutical
companies, stands locked in a takeover battle with British drugmaker AstraZeneca
. Its earnings Monday pointed to why it needs a conquest to pump up its new drug development pipeline through a major acquisition.
Revenue hit $11.35 billion in the first quarter, down 9% from $12.41 billion in the same quarter a year ago because of weaker sales in its generic and brand-name drug businesses. Net income fell 15% to $2.33 billion, down from $2.75 billion a year ago.
The New York-based company said last year it would restructure its operations into three business units. This is the first quarter that Pfizer has reported earnings through the new organization.
Global innovative pharmaceuticals include drugs that have market exclusivity past 2015, such as painkiller Lyrica and smoking cessation drug Chantix, while the global established pharmaceuticals unit consists of drugs that have lost patent protection such as cholesterol drug Lipitor, biosimilars and other products expected to lose exclusivity by 2015. The third business is composed of global vaccines, oncology and consumer healthcare products such as Advil and Prevnar.
Sales in innovative pharmaceuticals fell 7% to $3.07 billion in the first quarter compared with $3.3 billion a year ago, while revenue for the established drugs business dropped 13% to $5.99 billion during the first three months of the year compared with $6.86 billion in the same quarter a year ago. Those businesses comprise about 80% of Pfizer's revenue.
Lyrica is Pfizer's top-selling drug. Sales of the painkiller rose 8% to $1.15 billion in the first quarter, up from $1.06 billion in the same quarter a year ago.
“Despite continuing revenue challenges due to ongoing product losses of exclusivity and co-promotion expirations, I look forward to the remainder of the year given the strength of our mid- and late-stage pipeline, the continued growth opportunities for our recently launched products as well as opportunities for upcoming product launches,” Pfizer Chairman and CEO Ian Read said in a statement.
Pfizer is pursuing a proposed $106 billion acquisition of UK-based AstraZeneca, another large pharmaceutical company. The most recent offer was rejected by AstraZeneca's board, which described Pfizer's proposal as inadequate and undervaluing the company.
Like many large drugmakers dealing with ongoing losses of market exclusivity of their top-selling drugs, Pfizer has pursued acquisitions to boost its pipeline of drugs. The company five years ago acquired Wyeth for $68 billion and has made a number of other deals in recent years.
Pfizer executives told investors Monday during a call that the deal with AstraZeneca would “accelerate an already good strategy.” The company also confirmed its previously stated earnings guidance for 2014 of adjusted diluted earnings of $2.20 to $2.30 a share. Quarterly diluted earnings per share came in at 36 cents, down from 38 cents in the same quarter the prior year. The company also confirmed anticipated adjusted revenue of $49.2 billion to $51.2 billion for the year.Follow Jaimy Lee on Twitter: @MHjlee