Pfizer income drops 90% in Q4, spurred by falling Lipitor sales

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Pfizer has reported its financial results for fourth quarter and full fiscal year of 2008, which ended Dec. 31, 2008.

For the fourth quarter, Pfizer posted reported net income of $266 million—a decrease of 90 percent compared with the prior-year quarter. The results were impacted by a $2.3 billion pre-tax and after-tax charge resulting from an agreement in principle with Michael Sullivan, the U.S. Attorney for the District of Massachusetts, to resolve investigations regarding allegations of past off-label promotional practices concerning Bextra, as well as other open investigations.

In addition, the results were unfavorably impacted by an increased effective tax rate, as well as an increase in pre-tax charges of $1.2 billion ($700 million after-tax) associated with cost-reduction initiatives, which were partially offset by savings from those initiatives.

The New York City-based company booked revenues of $12.3 billion, a decrease of 4 percent compared with the year-ago quarter. The decrease was partly attributable to the loss of exclusivity for Norvasc in Korea and Japan in February 2008 and July 2008, respectively.   

For the year, Pfizer recorded revenues were flat, with $48.3 billion in 2008 compared with 2007 revenues of $48.4 billion. Revenues were impacted by foreign exchange of approximately $1.6 billion, or 3 percent.

U.S.-reported revenues were $20.4 billion, a decrease of 12 percent year over year, while international reported revenues were $27.9 billion, an increase of 10 percent, reflecting the favorable impact of foreign exchange of 6 percent and operational growth of 4 percent. U.S.-reported revenues accounted for 42 percent of the total compared with 48 percent in the year-ago period, while international reported revenues accounted for 58 percent of the total compared with 52 percent in the year-ago period.

The company posted a net income of $8.1 billion for the full-year, compared with the prior year, an increase of 3 percent. 

Lipitor revenues dropped 8 percent in the fourth quarter of 2008 to $3.1 billion, compared with the prior-year quarter. In the U.S., Lipitor revenues were $1.6 billion, a decrease of 13 percent compared with the prior-year quarter. Revenues from international markets were $1.5 billion, a decrease of 2 percent, reflecting the unfavorable impact of foreign exchange of approximately $124 million, or 8 percent, which more than offset operational growth of 6 percent, the company said.

“We achieved our financial objectives, including exceeding our cost-reduction target, despite the tumultuous global economy,” according to Pfizer’s Chairman and CEO Jeff Kindler. “Notwithstanding an extremely competitive and increasingly challenging environment in 2008, we made significant progress by: establishing customer-focused business units; reprioritizing and refocusing our research on the greatest opportunities for scientific, medical and commercial success; and increasing our phase 3 portfolio by approximately 60 percent, from 16 to 26 programs at year-end.”

Kindler said that as part of the company’s advancement, it acquired biopharmaceutical company, Wyeth, for approximately $68 billion.