With generic losses on the horizon, Pfizer puts up a stormy 2015 forecast

Pfizer CEO Ian Read

Pfizer ($PFE) is feeling the sting of early Celebrex generics already, and the pain will only get worse. The company rolled out a 2015 sales forecast that fell short of analyst expectations, at some $3 billion less than 2014 revenue.

And that's on the top end. Pfizer is predicting $44.5 billion to $46.5 billion in 2015 sales, down from $49.6 billion in 2014. Pfizer can blame a big chunk of that on currency effects--some $2.8 billion at current exchange rates, in fact. But generic versions of Celebrex, Lipitor and Viagra will still hammer away, with the operational range at $47.3 billion to $49.3 billion.

The silver lining in that cloud? Promising performances for its cancer drugs and vaccine franchise in 2014, which Pfizer expects to continue this year. Plus, there's the hoped-for approval of its breast cancer immunotherapy, Ibrance (palbociclib), one of the most-watched drugs on the biopharma scene.

And for the bottom line, the story is different: Pfizer is hoping that the success of new cancer meds and growth in its vaccines unit--not to mention cost controls--will be enough to boost those numbers northward. The company is looking for earnings of $1.57 to $1.72 per share, compared with $1.42 as reported for 2014.

What's frustrating for Pfizer, no doubt, is that the Celebrex hit wasn't supposed to happen. In March 2013, the U.S. Patent and Trademark Office granted extended protection for the arthritis pain med. That was supposed to protect Celebrex sales through this year. But last spring, a U.S. court nixed that reissued patent. Mylan ($MYL) and Actavis ($ACT) launched their versions in December. Celebrex sales suffered as a result, dropping to $2.6 billion from $2.9 billion, an 8% drop year-over-year. But the real hit will come this year, with a full 12 months of generic competition.

Pfizer is still suffering from generic competition for Lipitor, too; the cholesterol med slipped another 11% for the year to $2 billion. Blockbuster Viagra is keeping its exclusive hold on the U.S. market but faces generic competition overseas, which took a $200 million bite out of sales, or about 10%. Zyvox, its $1.35 billion antibiotic, is bracing for generics this year, with a patent expiring in May.

As Read noted, Pfizer is hoping several new products will take up some of the slack, including the anticoagulant Eliquis, which is finally gathering steam after a slow launch, and Nexium 24HR, the over-the-counter version of AstraZeneca's ($AZN) blockbuster stomach drug. Pfizer's oncology franchise grew to $2.2 billion from $1.9 billion in 2014--a 12% hike--and the company is close to FDA approval for Ibrance. The company recently said it's negotiating label language with the agency.

Meanwhile, global vaccines revenue shot up 22% in 2014, including a 33% boost for pneumococcal vaccine Prevnar 13, which brought in $4.5 billion. With a new indication in adults, the company is looking for more growth in 2015. Pfizer is also charging ahead with meningitis B jab Trumenba after winning FDA approval in October, hoping to grab market share despite competition from Novartis ($NVS) and its newly approved vaccine Bexsero.

In announcing the numbers, CEO Ian Read leaned on the bottom-line performance for 2014. "Despite significant continued revenue headwinds from product losses of exclusivity and co-promotion expiries, we were able to deliver modest adjusted diluted EPS growth," Read said in a statement. "As we look forward to 2015, we expect continued momentum with our pipeline, notably the potential U.S. approval of Ibrance (palbociclib) for advanced breast cancer, as well as anticipated strong growth in emerging markets and from our recent product launches in developed markets, including Eliquis, Xeljanz, Prevnar 13 in adults and Nexium 24HR."

- read Pfizer's earnings statement (PDF)

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