Last week, Pfizer reported quarterly profit did not the Wall Street expectations for the first time in the last two years because its revenue fell. Also, the pharma giant said it will no longer rely on 2020 share repurchases to boost growth.
The shares of Pfizer, which also reported higher operating costs and lower revenue of its off-patent drug Lyrica, were down by 4 percent at $38.51.
Pfizer is teaming up its parent organization Upjohn with generic drugmaker Mylan unit to market generic versions of brand drugs that have their lost patent protection, such as Viagra and Lyrica.
The company said the deal is expected to be completed by the middle of 2020, as it focuses on more profitable newer growth medications.
Pfizer’s executives said the company does not plan to share repurchases this year on a conference call with analysts.
The company’s Chief Financial Officer Drank D’Amelio said, “We will focus instead on increasing the dividend and investing in the business during this period of growth.”
Pfizer CEO Albert Bourla said the company “would not need such financial engineering to produce growth and that share buybacks could dilute it deal making firepower.”
UBS analyst Navin Jacob has raised concerns over “higher than expected fourth-quarter” operating costs and sales of some drugs, which fell short of Wall Street estimates and contributed to the earnings miss.
Jacob said, “It’s very surprising, noting that Pfizer tends to be very good at cost control.”
The sales of breast cancer drug Ibrance rose 13 percent to $1.28 billion in the quarter; however, it fell short of the estimate of $1.35 billion, per Refinitiv data.
Pfizer’s total revenue fell 9 percent to $12.69 billion in the fourth quarter. The sales of Lyrica plunged 67 percent to $433 million due to generic competition. The company’s lower revenue has reflected the absence of the consumer health business it sold in 2019.
