Pfizer: Q3 key product performance

Pfizer had a fairly in-line quarter, with no big surprises coming from the pharma as it raised its 2017 guidance slightly and increased revenues by about 1 percent operationally. In what's sure to be a welcome change from the earnings bloodlettings seen at the likes of Celgene, GlaxoSmithKline and Merck & Co., Pfizer's no-news-is-good-news stance may come as a relief. Analysts at Credit Suisse summed it up as "refreshingly boring," adding that "we think boring is a good thing right now."

Ibrance

Ibrance sales were up 60 percent from last year to $878 million, but slightly short of a consensus estimate of $914 million. While Ibrance has maintained a market-leading position in breast cancer, newer entrants in the form of Verzenio from Eli Lilly and Kisquali from Novartis still have potential to chip away at the compound's lead. That said, overcoming Pfizer's two-year head start on the CDK 4/6 inhibitor market will be no easy task, particularly when paired with its less onerous safety labelling. (See ViewPoints: Newest breast cancer market is now a triple-play)

CEO Ian Read said Ibrance won 50 percent of new patients starts in advanced breast cancer, with Group President Albert Bourla adding that the increased competition could also help increase uptake of CDK inhibitors as a whole in the breast cancer treatment paradigm.

Xtandi

Xtandi brought in $150 million in revenue, on par with analyst estimates as the company seeks to build confidence in its decision to buy Medivation for $14 billion, based on the growth potential of the treatment in non-metastatic prostate cancer. Management noted that patient assistance programmes were taking a chunk out of the Xtandi revenue, with Bourla saying, "we know that the net sales are lagging behind because of the Patient Assistance Programme … But we believe as we move to the next calendar year, that the patient assistance as a percentage of total demand will start normalising."

But the bigger revenue-driver for the drug lies in its expanded indications, hopefully powered by results from the Phase III PROSPER study. Pfizer said Tuesday that it's planning meetings with regulators to discuss the data and expanding the label "to all patients with castration-resistant prostate cancer." (See ViewPoints: Pfizer may yet PROSPER from Medivation wager)

Inflectra

Pfizer's Remicade biosimilar brought in $112 million for the quarter; expectations around the product are already fairly low given prior disclosures around the exclusionary contracting allegedly used by Johnson & Johnson to secure preferential placement for their product. Pfizer has already sued Johnson & Johnson over the alleged antitrust violations; the company didn't provide any specific updates on the lawsuit on Tuesday, but General Counsel Douglas Lanker noted that the "inappropriate and inaccurate marketing claims- for example, suggesting that patients need to fail first on Remicade before using Inflectra- seem to be unique to J&J," rather than pervasive across the pharmaceutical industry. (See ViewPoints: As lawsuit against Johnson & Johnson is filed, FirstWord's new biosimilar report sheds light on Pfizer's Inflectra challenges in US market)

Nonetheless, Read reported some growth for Inflectra on Tuesday, saying that it "has grown, albeit slowly, to a 4.9-percent share of the overall US infliximab market by volume. We continue to have 100 percent Medicare coverage as well as strong coverage in Medicaid. And in situations where the insurer and provider are the same, such as the VA, we have seen rapid uptake of Inflectra with share in these situations reaching 54 percent, up from 20 percent in quarter two."

Tax reform

As per usual, Read was peppered with questions on how the company's dealmaking might be integrated into the possibility for tax reform in the US- now a more likely possibility under President Trump than with prior administrations. (See ViewPoints: With tax reform back on the menu, who's buying?)

Read took a stalwart stance in his comments on Tuesday, saying "if there's no tax reform, we will continue to look at acquisitions based on the value creation for shareholders as we've always done. So I don't really speculate on that."

Corporate re-structuring

Pfizer had raised eyebrows earlier this month when it said it was considering options for its consumer health business, including a potential sale. Speculation heated up when GlaxoSmithKline's Emma Walmsley didn't discount the possibility of buying up the unit. (See ViewPoints: GlaxoSmithKline's dilemma)

On Tuesday's conference call, Read said the company is leaving all the options on the table for how it might handle the division, including keeping it, creating a separate spin-out, or planning an asset swap. "I think this process we're going to take in the strategic review may shake loose more alternatives in that aspect," he said.

The company says it expects to make a decision regarding the unit in 2018, though investors will be watching for a repeat of the will-they-won't-they scenario that played out previously around management's decision of whether or not to split the company into two separate entities.

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