Pfizer, Roche suffer as big drugs falter

Today's earnings roundup is a snapshot of pharma's challenges--generic competition, safety problems--and opportunities, namely biotech meds. Big-selling drugs lost ground, bringing their makers down with them. Safety-related charges depressed earnings. Read on, and you'll see.

  • Pfizer saw first-quarter net income drop by 18 percent as sales of its linchpin med Lipitor fell--and it hasn't even gone off patent yet. Generic competition for the allergy drug Zyrtec cut its sales by 75 percent. Growing drugs included Celebrex, whose sales rose 2.2 percent, and Chantix, which gained 71 percent. Overall, revenues fell by 5 percent to $11.85 billion.
  • Roche suffered as demand for the cancer med Herceptin slowed and sales of the antiviral drug Tamiflu sank. The flu drug lost 64 percent of its revenues, compared with last year's first quarter, when governments were actively stockpiling for a potential pandemic. Demand for Avastin leapt by 35 percent, offsetting the Herceptin losses. The declining dollar didn't help, either. Overall, revenues declined by 4 percent to $10.4 billion.
  • Baxter International managed to eke out a 6.5 percent increase in earnings despite two safety-related charges, one of $45 million on its withdrawn Colleague infusion pump and another of $11 million to cover the cost of its heparin recall. Revenues rose 7.6 percent to $2.88 billion. The company boosted its R&D spend to $190 million, a 19 percent increase.
  • The news from big biotech Gilead Sciences is rosier: The HIV specialist "trounced" Wall Street targets with earnings of $522.1 million, up from $447.6 million first-quarter 2007. Revenues jumped by 22 percent to $1.26 billion as the antiretroviral Truvada bought in $479.4 million, beating analysts' expectations.
  • Meanwhile, device maker St. Jude Medical reported a 27 percent hike in net income on strong sales of defibrillators. The company posted $184.8 million in profits on sales of $1.01 billion.

- read the Pfizer earnings in the Wall Street Journal
- check out the BBC's take on Roche
- see MarketWatch's Roche coverage
- find the Baxter story in the Chicago Tribune
- get the Gilead news from TheStreet
- check St. Jude's numbers in the WSJ