Shares of Wyeth ( WYE) fell Tuesday as the drugmaker's fourth-quarter earnings came in below Wall Street estimates. Also, the company's guidance for 2007 was at the low end of analysts' expectations. By early afternoon, Wyeth's stock was down $1.03, or 2%, to $49.57, on heavier-than-average trading. Excluding special items, Wyeth earned 66 cents a share for the three months ended Dec. 31, 5 cents lower than the average estimate of analysts polled by Thomson First Call. Sales of $5.22 billion beat the Wall Street estimate of $5.1 billion and the year-ago quarter's $4.75 billion. When items are included, Wyeth earned $855.4 million, or 63 cents a share, vs. a profit of $731.7 million, or 54 cents a share, for the year-ago quarter. Wyeth set its 2007 guidance at a range of $3.40 to $3.50, excluding items. The Wall Street consensus was $3.49. Analysts participating in Wyeth's conference call Tuesday focused on a plant in Puerto Rico, which has been the source of continuing discussions with the Food and Drug Administration over manufacturing problems. Until the matter is settled, Wyeth can't make new drugs there, including several which it had hoped to launch this year. Bernard Poussot, Wyeth's president and chief operating officer, revealed Tuesday that the FDA began reinspecting the plant last week. He added that it would take the agency several weeks to complete its review. Fixing the problems to FDA satisfaction "has been a majority priority over the last seven months," Poussot said.
Experimental products affected by the plant include Pristiq, which Wyeth is seeking as a treatment for depression and also for symptoms of menopause, and the oral contraceptive Lybrel, which would eliminate menstrual periods. Although executives previously said Pristiq for depression might be ready for market in mid-2007, they revised the launch date to late 2007 or early 2008. The depression application received
conditional approval from the FDA last week. However, Wyeth won't launch the drug until the plant problems are fixed and until the FDA reviews clinical trials of a lower-dose version of Pristiq. The tests, which weren't ordered by the FDA, should be submitted to the agency soon. The FDA review is expected to take three to six months. The agency is scheduled to act on the menopause-symptom application in April, and Poussot said this version of Pristiq could be launched during the third quarter. During the second quarter, Wyeth expects to hear from the FDA on the kidney-cancer drug Torisel and on a drug to prevent osteoporosis. In the third quarter, the agency is scheduled to issue a verdict on a schizophrenia medication. Wyeth also expects to hear from the FDA on Lybrel in the second quarter. Lybrel received conditional approval from the FDA last June. At one point, Wyeth expected that the agency would convene an advisory panel to review the drug's clinical trials. Poussot said Tuesday there would be no advisory committee meeting.
Although investors weren't impressed by the fourth quarter, a number of Wyeth's biggest drugs turned in solid performances vs. the same period in 2005. The antidepressants Effexor XR and the older Effexor had a combined gain of 11% to $936 million. These drugs are chemical cousins of Pristiq. Sales of Enbrel climbed 40% to $416 million. The drug, which Wyeth sells outside the U.S. and Canada, treats inflammatory diseases such as rheumatoid arthritis and psoriasis. Sales of the pneumococcal disease vaccine Prevnar rose 20% to $502 million, and sales of the Premarin family of hormone replacement drugs rose 20% to $262.4 million. The number of lawsuits vs. Premarin and Prempro rose, too, reaching 8,300 by the end of 2006. Plaintiffs say these drugs
cause breast cancer. Kenneth Martin, Wyeth's chief financial officer, told analysts Tuesday that Wyeth will approach litigation "one case at a time." Martin said it would be "hard to read anything into the outcome" of a single case. The company lost a $1.5 million verdict in a Pennsylvania state court Monday. Wyeth has won one case; it lost another case, but that verdict was overturned when the judge declared a mistrial.