Products with declining revenues
So far in this series, we’ve already discussed growth trends and positive growth contributors for Pfizer (PFE) in 3Q16. Let’s now look at the products that hampered growth.
The overall share of revenues from the Essential Health Products business fell to 43.8% of Pfizer’s total revenues in 3Q16 from 44.1% of total revenues in 3Q15. This was driven by the growth in revenues from sterile injectable pharmaceutical products but was offset by the loss of exclusivity of two of its key products Celebrex and Zyvox.
Products with declining sales
Pfizer saw a 3% fall in Prevnar family revenues, as compared to the previous quarter, following lower demand for Prevnar 13 in the US in 3Q16. In 3Q16, the total contribution of Prevnar family was $1.5 billion, as compared to $1.58 billion in 3Q15.
Enbrel, a drug that treats spondylitis, psoriasis, and arthritis, achieved sales of $701 million in 3Q16 outside the US and Canada—a fall of ~17%, as compared to $844 million in 3Q15.
Celebrex, a non-steroidal anti-inflammatory drug used to reduce pain and inflammation, reported a sales decline of ~8% at $194 million in 3Q16, as compared to $212 million in 3Q15, following the loss of exclusivity in December 2014. Celebrex’s revenues have fallen more than 75% since the loss of its exclusivity.
Meanwhile, Viagra’s sales fell 10% to $387 million in 3Q16, as compared to $430 million in 3Q15, following the effect of patent expiry and pricing pressure.
Zyvox, an antibiotic, reported a sales decline of ~43% at $94 million in 3Q16, as compared to $165 million in 3Q15, following the loss of exclusivity in May 2015.
Lipitor, a drug for reducing cholesterol and triglycerides in the blood, reported a fall in sales of ~7% at $422 million in 3Q16, as compared to $454 million in 3Q15, following the continued generic competition in developed markets. This was partially offset by the growth in the emerging markets.
No major changes in revenues due to lost exclusivity—or, at least, none that will affect Pfizer’s stock price negatively—are anticipated in the near future.
To divest risk, investors can consider ETFs like the iShares US Healthcare ETF (IYH), which has ~7.1% of its total assets in Pfizer, ~3.1% in Allergan (AGN), ~3.% in AbbVie (ABBV), and 6.0% in Merck (MRK).