Products with declining revenues
Previously, we discussed Pfizer’s (PFE) growth trends and positive growth contributors. The overall share of revenues for the Essential Health Products business fell marginally to 44.7% of the total revenues for 2016 from 45.2% of the total revenues for 2015 due to the loss of exclusivity of two of its key products, Celebrex and Zyvox.
Products with declining sales
The revenues were affected by lower sales of the following drugs:
- A 7% decrease in Prevnar family revenues compared to the previous year, following lower demand for Prevnar 13 in the United States as well as international markets during 2016. In 2016, the total contribution of the Prevnar family was $5.7 billion as compared to $6.2 billion in 2015.
- Lipitor, a drug for reducing cholesterol and triglycerides in the blood, reported a decrease in revenues by ~6% to $1.8 billion in 2016 as compared to $1.9 billion in 2015 following the growth in the US and international markets, offset by the negative impact of foreign exchange.
- Enbrel, a drug for the treatment of spondylitis, psoriasis, and arthritis achieved sales of $2.9 billion in 2016 for outside the US and Canada markets, a decrease of ~13% as compared to $3.3 billion in 2015.
- Celebrex, a non-steroidal anti-inflammatory drug used to reduce pain and inflammation, reported a sales decline by over 10% to $733 million in 2016 as compared to $830 million in 2015 following the loss of exclusivity in December 2014, partially offset by the impact of foreign exchange. Celebrex revenues are constantly declining, and have fallen by over 75% since the loss of exclusivity.
- Viagra sales fell 8.8% to $1.6 billion in 2016 as compared to $1.7 billion in 2015, following the effect of patent expiry and pricing pressure.
- Zyvox, an antibiotic, reported a sales decline of ~52% to $421 million in 2016 as compared to $883 million in 2015 following the loss of exclusivity in May 2015.
- Inylta, a drug for the treatment of advanced renal cell carcinoma, reported a decline of 6% in its revenues at $401 million in 2016 as compared to $430 million in 2015.
- BeneFIX, a rare disease drug, reported a decline of 4% in its revenues to $712 million in 2016 as compared to $752 million in 2015.
Several other Pfizer drugs saw revenue declines during 2016, mainly due to competitive pressure and loss of exclusivity.
To divest the risk, investors can consider ETFs like the iShares Core S&P US Value ETF (IUSV), which holds 1.8% of its total assets in Pfizer (PFE), 2.5% of its total assets in Johnson & Johnson (JNJ), 1.1% of its total assets in Medtronic (MDT), and 0.5% of its total assets in Abbott Laboratories (ABT).