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Pfizer: Understanding Growth Drivers in 1Q17

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Understanding growth drivers

Pfizer’s (PFE) revenues have been driven by growth in the sales of key products including Lyrica, Ibrance, Xalkori, and Xeljanz.

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Positive growth contributors

  • A 3% increase in total Lyrica revenues at $1.27 billion in 1Q17, compared to $1.23 billion in 1Q16, was mainly due to a 12% increase in sales of Lyrica IH, offset by a 35% decrease in sales of Lyrica EH. Lyrica EH includes revenues from Europe, Turkey, Russia, Israel, and Central Asia. Lyrica IH includes revenues from the rest of the world.
  • Ibrance, the new blockbuster drug to treat advanced breast cancer, launched in February 2015 and reported 59% growth in revenues at $679 million in 1Q17, compared to $429 million in 1Q16. The rise was due to a strong response from healthcare practitioners. US markets reported Ibrance sales of ~$608 million in 1Q17, compared to $422 million in 1Q16.
  • BMP2 reported growth of 21% in its revenues at $62 million in 1Q17 due to increased demand in US markets.
  • Xalkori and Xeljanz achieved sales of $142 million and $250 million, respectively, in 1Q17. Xalkori’s revenue grew 2% while Xeljanz’s revenue rose over 27% in during 1Q17.
  • Celebrex, a non-steroidal anti-inflammatory drug used to reduce pain and inflammation, reported sales growth of 2% to $175 million in 1Q17 from $172 million in 1Q16.
  • Chantix/Champix revenues rose 9% to $239 million in 1Q17 from $220 million in 1Q16.
  • Medrol and Sulperazon sterile injectable products reported revenue growth of 6% at $120 million and 27% at $122 million, respectively, in 1Q17.

Alliance revenues rose ~82% to $656 million in 1Q17 from $360 million in 1Q16. Alliance revenues include Eliques and Rebif for 2015 as well as Eliques and Xtandi for 2016 revenues.

To divest risk, investors can consider ETFs like the Fidelity MSCI Health Care ETF (FHLC), which invests ~6.7% of its total assets in Pfizer. The Fidelity MSCI Health Care ETF also invests 8.8% of its total assets in Johnson & Johnson (JNJ), 4.6% in Gilead Sciences (GILD), and 2.9% in Biogen Inc. (BIIB).

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