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Understanding Pfizer’s Growth Contributors

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Nov. 30 2016, Updated 10:04 a.m. ET

Growth contributors

Previously in this series, we discussed Pfizer’s (PFE) revenues and growth trends. To understand the factors affecting growth, let’s now explore Pfizer’s strong product portfolio and pipeline—particularly its key performers, including Lyrica, Ibrance, Xeljanz, and Chantix from the Innovative Health business.

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Positive growth contributors

Pfizer saw a 2% rise in Lyrica revenues at $1.24 billion in 3Q16, as compared to $1.22 billion in 3Q15, primarily due to a 12% rise in sales in US markets, offset by a 12% fall in sales in the international markets.

Ibrance, the new blockbuster drug to treat advanced breast cancer, was launched in February 2015 and reported revenues of $550 million in 3Q16, as compared to $230 million in 3Q15 due to the strong response from healthcare practitioners.

Xalkori and Xeljanz achieved sales of $140 million and $235 million, respectively, in 3Q16. Xalkori’s revenues grew 14%, while Xeljanz’s revenues rose ~85% during 3Q16, as compared to the same quarter last year.

Other major contributors

Revenues from Chantix-Champix rose 24% to $198 million in 3Q16, as compared to $159 million in 3Q15. EpiPen, one of the key products of Mylan (MYL) contains a drug manufactured by Pfizer. Pfizer reported a 3% rise in EpiPen revenues at $110 million for 3Q16.

Revenues from Alliance rose ~20% at $419 million in 3Q16, as compared to $349 million in 3Q15. Alliance revenues include Eliques, Rebif, Spiriva, and Aricept. Overall, Alliance revenues have fallen for the past few years due to the expiration of Enbrel and Spiriva collaborations.

To divest risk, investors can consider ETFs like the Fidelity MSCI Health Care ETF (FHLC), which has ~6.4% of its total assets in Pfizer, 2.8% in Allergan (AGN), 3.3% in Gilead (GILD), and 5.4% in Merck (MRK).

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