Pfizer Inc. (NYSE: PFE) today reported financial results for first-quarter 2012. First-quarter 2012 revenues were $15.4 billion, a decrease of 7% compared with $16.5 billion in the year-ago quarter, which reflects an operational decline of $1.0 billion, or 6%, and the unfavorable impact of foreign exchange of $57 million, or less than 1%.
For first-quarter 2012, U.S. revenues were $6.0 billion, a decrease of 15% compared with the year-ago quarter, primarily as a result of the U.S. loss of exclusivity of Lipitor on November 30, 2011. International revenues were $9.5 billion, consistent with the prior-year quarter, which reflects 1% operational growth and a 1% unfavorable impact of foreign exchange. U.S. revenues represented 39% of total revenues in first-quarter 2012 compared with 43% in the year-ago quarter, while international revenues represented 61% of total revenues in first-quarter 2012 compared with 57% in the year-ago quarter.
Primary Care unit revenues decreased 25% in comparison with the same period last year, primarily due to the loss of exclusivity of Lipitor in the U.S. in November 2011 and the resulting shift in the reporting of U.S. Lipitor revenues to the Established Products unit beginning January 1, 2012. U.S. branded Lipitor revenues, as reported by the Established Products unit, decreased to $383 million, or 71%, from $1.3 billion reported by the Primary Care unit in first-quarter 2011. Collectively, the decline in revenues for Lipitor in the U.S. and for certain other Primary Care unit products that lost exclusivity in various markets in 2011, as well as the resulting shift in the reporting of such product revenues to the Established Products unit, reduced Primary Care unit revenues by $1.5 billion, or 28%, in comparison with first-quarter 2011. The impact of these declines was partially offset by the strong growth of Lyrica, most notably in Japan, in addition to the solid performance of Celebrex and Premarin.
Specialty Care unit revenues declined 9% in comparison with first-quarter 2011. Revenues were positively impacted by the growth of Enbrel as well as the Prevenar franchise in Japan and Australia, while U.S. and developed Europe Prevnar 13/Prevenar 13 revenues were lower than in the prior-year quarter primarily because most patients eligible to receive the pediatric catch-up dose have already been vaccinated. Prevnar 13 U.S. revenues were also impacted by a lower birth cohort compared with the same quarter last year. Additionally, Specialty Care unit revenues were negatively impacted by the losses of exclusivity of Vfend and Xalatan in the U.S. in February and March 2011, respectively, and the resulting shift in the reporting of Vfend and Xalatan U.S. revenues to the Established Products unit beginning January 1, 2012, as well as the loss of exclusivity of Geodon in the U.S. in March 2012. Collectively, these developments relating to Vfend, Xalatan and Geodon and the impact of other Specialty Care unit products that lost exclusivity in various markets in 2011 reduced Specialty Care unit revenues by $264 million, or 7%, in comparison with first-quarter 2011.
Established Products unit revenues increased 17% operationally in comparison with the prior-year period, primarily driven by recent launches of generic versions of certain Pfizer branded primary care and specialty care products as well as $383 million of U.S. branded Lipitor revenues. Additionally, revenues were positively impacted by our agreement granting Watson Pharmaceuticals, Inc. the exclusive right to sell the authorized generic version of Lipitor in the U.S. First-quarter 2012 revenues were negatively impacted in comparison with first-quarter 2011 by the entry of multi-source generic competition in the U.S. for donepezil (Aricept) in May 2011. Total revenues from established products in both the Established Products and Emerging Markets units were $3.8 billion, with $965 million generated in emerging markets.
Emerging Markets unit revenues grew 9% operationally in comparison with first-quarter 2011, primarily due to continued volume growth across the product portfolio, primarily in China, Russia and Mexico, as a result of more focused, targeted promotional efforts for key products. This growth was partially offset by the negative impact of increased pricing pressures and changes in the timing of government purchases in Turkey.
Ian Read, Chairman and Chief Executive Officer, stated, "I am pleased with our first-quarter 2012 financial performance, which was driven primarily by growth in certain brands including Celebrex, Enbrel and Lyrica, growth in key geographies such as China, as well as our continued ability to realize cost savings and efficiently allocate our shareholders’ capital. These and various other factors have mitigated the negative financial impact of product losses of exclusivity of approximately $1.3 billion compared with the year-ago quarter, including Lipitor in the U.S., and have enabled us to generate adjusted diluted EPS that is nearly comparable to the year-ago period."
"Regarding our key imperative to improve the performance of our innovative core, notable progress continues as we launched the Prevnar 13/Prevenar 13 vaccine for adults in the U.S. and EU and Inlyta for advanced renal cell carcinoma in the U.S., while regulatory submissions for Eliquis, tofacitinib and bosutinib are under review in key markets, with regulatory action for each anticipated in 2012. In addition, we look forward to receiving phase three clinical data for bapineuzumab for Alzheimer’s disease in mid-2012. I also remain encouraged by the emerging profiles of our next wave of innovative pipeline candidates which are in phase two or early phase three studies in areas such as oncology, vaccines, hyperlipidemia and pain."
"I also am pleased with the recently announced agreement to sell our Nutrition business to Nestlé for $11.85 billion. This is a significant milestone that I believe will unlock the trapped value of this successful business and create greater return for our shareholders. We currently expect to allocate the after-tax proceeds to further share repurchases, and will regularly assess additional uses of proceeds, with share repurchases remaining the case to beat. Further, we remain committed to continuing to generate attractive returns for our shareholders by delivering novel therapies in high-need disease areas, maximizing the value of our Animal Health business, efficiently allocating capital and rigorously managing our operating expenses," concluded Mr. Read.
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