Pfizer is monitoring opportunities in follow-on biologics and continuing to look for small to mid-sized deals as it plans for life without Lipitor, global revenues of which fell by 13 per cent in Q1.
In recent quarters Lipitor’s (atorvastatin calcium) revenues have been hit, particularly in the US, by generic versions of Merck & Co’s Zocor (simvastatin) and AstraZeneca’s Crestor (rosuvastatin).
The stalling of Pfizer’s main revenue generator has affected the company’s results and the situation will worsen significantly when Lipitor comes off patent in 2011. Consequently Pfizer has sought to find new revenue streams by buying Wyeth and looking beyond its traditional focus.
In a conference call with investors CEO Jeff Kindler said that the Wyeth acquisition created the possibility of Pfizer entering the follow-on biologics market and that the company is “supportive of establishing a regulatory pathway”.
Diversifying into follow-on biologics would provide an additional revenue stream and potentially help Pfizer in the post-blockbuster era. The company has already sought to enhance its presence in the small molecules generic market through the deal with Aurobindo.
Using the deal with Aurobindo as an example Kindler said Pfizer “will continue to look for opportunities for smaller or midsized opportunities”.
Cutbacks & outsourcing limit damage
Pfizer’s revenues fell by eight per cent in Q1 but this was offset by the company’s cost cutting measures, which helped profits beat expectations.
Declining sales of Lipitor and Chantix (varenicline), which tumbled by 36 per cent, dragged down Pfizer’s revenues but restructuring efforts saved the company $330m (€248m) and ensured profits only dipped by two per cent.
These cutbacks have led to an increased reliance on outsourcing, with Frank D'Amelio, Pfizer’s chief financial officer, saying that the company now has “a wider rate of outsourcing opportunities in various stages of implementation”.
D'Amelio added that the outsourced activities span “manufacturing, logistics, finance, facilities, legal and IT”.
In addition D'Amelio said that outsourcing now accounts for 24 per cent of the company’s manufacturing, up from 17 per cent in 2008, and that Pfizer will continue to size “work force level with current market dynamics”.