Pfizer (PFE) is scheduled to report the results of its fourth fiscal quarter before the market open on January 29, with a conference call scheduled for 10:00 am EDT. What to watch for: 1. GUIDANCE: Along with its third quarter financial report in late October, the drug giant gave its view for FY18. Pfizer narrowed its FY18 adjusted EPS view to $2.98-$3.02 from $2.95-$3.05 on a narrowed revenue view of $53B-$53.7B from its previous view of $53B-$55B. At the time consensus was $2.99 and $54.15B, respectively. Pfizer said Innovative Health revenues first half revenues increased 5% operationally, primarily driven by continued growth from key brands including Eliquis globally. Gains in those product sales were partially offset primarily by the loss of exclusivity of Viagra in the U.S. and lower revenues for Enbrel in most developed Europe markets primarily due to continued biosimilar competition. Essential Health revenues declined 4% operationally, negatively impacted primarily by a 14% operational decline in the legacy established products portfolio in developed markets, primarily driven by industry-wide pricing challenges in the U.S. and generic competition. 2. INCREASING DRUG PRICES: On November 16, Pfizer shared its plans to maintain the current list prices for about 90% of its medicines, and effective January 15, to increase the list price of 10% of its entire drug portfolio — 41 medicines only. These list price increases are expected to be offset by higher rebates and discounts paid to insurance companies and pharmacy benefit managers and the net effect on revenue growth in the U.S. in 2019 is expected to be zero. Given the higher rebates and discounts, the company expects the healthcare system will share those benefits with patients so they do not experience higher costs for their medicines. Soon after news of the price increases was out, Wells Fargo analyst David Maris told investors that Pfizer earlier this year was criticized by the Trump administration for drug price increases, and as a result, it rolled the price increases back. However, Pfizer’s new price increases “are not egregious” and its advance warning may be an attempt to see if minor price increases will also bring the administration’s rebuke, said Maris. 3. PIPELINE: In mid-December, Pfizer announced the initiation of a Phase 3 program for its 20-Valent pneumococcal conjugate vaccine candidate, PF-06482077, for the prevention of invasive disease and pneumonia caused by Streptococcus pneumonia. Additionally, Pfizer announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency has adopted a positive opinion, recommending marketing authorization for Zirabev, a potential biosimilar to Avastin. Zibarevis a monoclonal antibody for the treatment of metastatic carcinoma of the colon or rectum, metastatic breast cancer, unresectable advanced, metastatic or recurrent non-small cell lung cancer, advanced and/or metastatic renal cell cancer and persistent, recurrent or metastatic carcinoma of the cervix. 4. PFIZER, GSK TEAM ON CONSUMER HEALTHCARE: Pfizer and GlaxoSmithKline (GSK) announced on December 19, that they have entered into an agreement to create a consumer healthcare company. The boards of both companies have unanimously approved the transaction under which Pfizer will contribute its consumer healthcare business to GlaxoSmithKline’s existing consumer healthcare business.
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