What to watch in Pfizer earnings report

Pfizer (PFE) is scheduled to report the results of its first fiscal quarter before the market open on April 30, with a conference call scheduled for 10:00 am EDT. What to watch for 1. GUIDANCE: Along with its fourth quarter financial report in late January, the drug giant gave its initial view for FY19. Pfizer said it sees its adjusted earnings per share for FY19 to be $2.82-$2.92 on a revenue view of $52B-$54B. At the time, the consensus view for EPS was $3.04 and for revenue was $54.36B. “Our 2019 financial guidance anticipates continued strong growth from key product franchises, including Ibrance, Eliquis, Xeljanz, and Xtandi as well as the expected loss of exclusivity of Lyrica in the U.S. in June 2019. The midpoint of our 2019 revenue guidance range implies comparable operational performance to 2018 while absorbing an anticipated $2.6 billion revenue headwind due to products that have recently lost or are expected to soon lose marketing exclusivity,” said company CFO Frank D’Amelio. 2. PIPELINE DEVELOPMENTS: In December, Pfizer announced at the American Society of Hematology Annual Meeting that the Reflections B328-06 study, a comparative safety and efficacy study of PF-05280586 versus Rituxan/MabThera, met its primary endpoint of overall response rate at week 26 of the 52-week study. On March 19, Merck KGaA (MKGAY) and Pfizer announced the discontinuation of the ongoing Phase III JAVELIN Ovarian PARP 100 study evaluating the efficacy and safety of avelumab in combination with chemotherapy followed by maintenance therapy of avelumab in combination with talazoparib, versus an active comparator in treatment-naive patients with locally advanced or metastatic ovarian cancer. The decision was based on several emerging factors since the trial’s initiation, including the previously announced interim results from JAVELIN Ovarian PARP 100, the companies said. On April 18, Pfizer and Eli Lilly announced top-line results from a Phase 3 study evaluating tanezumab 2.5 mg and 5 mg. The tanezumab 5 mg treatment arm met two of the three co-primary efficacy endpoints, demonstrating a statistically significant improvement in pain and physical function compared to NSAIDs at the 16-week analysis, while patients’ overall assessment of their OA was not statistically different than NSAIDs. Patients who received tanezumab 2.5 mg did not experience a statistically significant improvement in pain, physical function or patients’ overall assessment of their OA at 16 weeks compared to NSAIDs. Ken Verburg, tanezumab development team leader, said: “We are analyzing these findings in the context of the recent Phase 3 results as we assess potential next steps for tanezumab. We plan to review the totality of data from our clinical development program for tanezumab with regulatory authorities.” 3. MEDICARE FOR ALL?: Backers for Medicare for All, including Vermont Senator Bernie Sanders, are advocating for Medicare to cover all citizens and lawful permanent residents. Michigan Senator Debbie Stabenow is pushing to lower the age requirement. Shares of drug stocks as measured by the performance of the Health Care Select Sector SPDR Fund (XLV) were down almost 8% since early April as democratic political candidates began bringing up drug pricing as the country gets closer to the next presidential election. The XLV has recovered since trading down to a short-term low of $84.65 on April 18.

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