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COPYRIGHT 2005 Voxant Inc.
Original Source: NIGHTLY BUSINESS REPORT
PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: Drug giant Pfizer gives Wall Street a bitter pill to swallow. Sales are slumping and it`s yanking financial forecasts. That`s a big u-turn for the big pharmaceutical. We ask its CEO what`s going on.
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Oil traders in New York send prices sharply lower today on an increase in supply of both oil and natural gas, but there`s still one wild card in the energy deck and her name is Wilma.
KANGAS: Investors are ga-ga for Google in after-hours trading tonight sending the stock sharply higher. That`s because the web search engine turned in terrific earnings after the bell thanks to online ad revenues.
GHARIB: Also tonight, these neat new gadgets can help you find your way when you`re way off the beaten path. It`s just one of the things in tonight`s "tech talk" segment.
KANGAS: I`m Paul Kangas.
GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Thursday, October 20.
KANGAS: Good evening, everyone. A big surprise from Pfizer today: third quarter earnings plunged at the world`s largest drug maker and shares tumbled almost 9 percent. Excluding special items, Pfizer earned $0.51 a share, $0.03 above estimates, but 7 percent below year-ago results. Revenues fell for the first time in four years. Pfizer now says it expects earnings for the full year to drop as much as 9.4 percent, a steeper decline than earlier predicted. But Pfizer won`t look beyond this year and has withdrawn its financial outlook through 2007. The reasons for all this: sagging sales of its arthritis drug Celebrex and an unexpected drop in its cholesterol fighter Lipitor. Late today, I talked with Pfizer`s CEO Hank McKinnell and I asked him if the slowdown is temporary or longer lasting.
HANK McKINNELL, CEO, PFIZER: Well, that`s a question we don`t know the answer to. Our assumption is the slowdown in the third quarter does not reflect any underlying long-term systemic problem in the industry. We do expect a return to growth in the fourth quarter or certainly next year. There`s certainly lots of unmet medical need there. But in the light of a slowing market in the third quarter and our need to revise our plans for the next two years, we`ve withdrawn guidance for that period and will get back to the analysts in January with a new forecast.
GHARIB: Mr. McKinnell, why were Lipitor sales weaker than expected? Is it because of slowing demand or is it just because of more competition?
McKINNELL: Well, Lipitor slowed in the third quarter for two reasons. One is the overall market growth fell from 14 percent to 7 percent. Secondly, we were in the process of reorganizing our sales force to be more aligned with the new Medicare prescription drug benefit. And during that period, the transfer of territories and the retraining that was necessary probably did have some impact on overall demand.
GHARIB: So what is your strategy, then, to boost sales and also to make up for lost sales when many of your drugs are going to be coming off of patent protection soon. I understand that Zoloft and Zipomax (ph) for example account for $4 billion in annual sales and they`re going to be coming off patent protection soon. So what`s your strategy?
McKINNELL: Well, the challenge is replacing sales we lose because of expirations of patents. But of course, we`ve known that for a long time and we`ve been planning for this period for more than a decade. What was overlooked today, I think, is the remarkable progress we`re making in the development and registration of new products. We launched three in the third quarter alone and we`ve had some very...
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