Pfizer Plans New Cost Cuts

Executives warned that the fourth-quarter earnings, excluding special items, will decline year over year. Revenue will likely be flat.

Pfizer didn't specifically predict fourth-quarter earnings per share, but it said profits will take a hit as the full impact of generic competition for Zoloft, the antidepressant that lost U.S. patent protection earlier this year, is felt. During the third quarter, Zoloft sales sank 43% to $459 million.

Among major products, Pfizer continues to predict it will achieve full-year sales of $13 billion for Lipitor, the cholesterol fighter, and $2 billion for Celebrex, the arthritis treatment.

For the third quarter, Lipitor, the world's best-selling prescription drug, achieved sales of $3.32 billion, up 15% worldwide. The U.S. component grew 19% to $2.07 billion.

"We continue to see aggressive competition from branded and generic agents, which will further intensify in the fourth quarter of 2006," Pfizer said. A big challenge will come later this year when multiple generic versions of Merck's(MRK) Zocor hit the U.S. market. Lipitor sales will grow next year "but at a lower rate than in 2006," Pfizer said.

Sales of Celebrex sales reached $537 million for the third quarter, up 20% from the same period last year. Celebrex is a COX-2 inhibitor, the same type of drug as Vioxx, which Merck removed from the market two years ago over concerns about its cardiovascular risk. The COX-2 controversy knocked down Celebrex's sales to $1.73 billion last year from 2004's peak of $3.3 billion.

The impotence drug Viagra saw its sales gain 10% to $423 million, while sales of Lyrica, for two types of nerve pain and epilepsy, more than quadrupled to $324 million.

Pfizer's second-biggest drug, the blood-pressure medication Norvasc, grew by 7% to $1.21 billion. Norvasc has less than 12 months of U.S. patent life left. Pfizer is suing Mylan Laboratories(MYL) for patent infringement in a case scheduled for trial in late November.

On Thursday, Mylan said a federal judge granted its motion to dismiss one of two contested patents from the trial. The Food and Drug Administration has given Mylan approval to sell three dosage strengths of generic Norvasc.

>To order reprints of this article, click here: Reprints