Healthy Skepticism Library item: 7283

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Publication type: news

Pettypiece S.
Pfizer Profit Probably Rose on Revived Celebrex Sales
Bloomberg.com 2006 Oct 18
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOU6ZRjuma8s&refer=home

Abstract:

Pfizer Inc. is likely to report higher third-quarter profit after the world’s largest drugmaker revived sales of Celebrex by increasing the pain medicine’s price and advertising.

Pfizer raised Celebrex’s average price by 5 percent in the first half to $2.90 a pill, said data research firm Verispan LLC in Yardley, Pennsylvania. The number of prescriptions was unchanged from a year earlier, according to Verispan. The drug’s second-quarter revenue gained 17 percent.

Sales were helped by a consumer ad campaign that cost $20 million through June, said market research firm Nielsen Monitor- Plus in New York. Celebrex sales fell last year by $1.6 billion, or 48 percent, after Merck & Co.‘s similar-acting painkiller Vioxx was recalled in 2004 because of a link to heart risks. Pfizer wants to propel Celebrex revenue by 16 percent to $2 billion this year, the New York-based company said July 20.

``They’ve got a drug on the market, and they are going to try to leverage it as far as they can,’‘ said Les Funtleyder, a health-care strategist with Miller Tabak & Co. in New York, in a telephone interview.

Pfizer may report tomorrow that profit rose to 38 cents a share from 22 cents a year earlier, said Chris Shibutani, an analyst with JP Morgan Securities Inc. in New York, in a report to clients. Excluding revenue from Pfizer’s consumer health business, Shibutani says Pfizer’s earnings may be 45 cents, in line with the average estimate of 18 analysts surveyed by Thomson Financial.

Lower Costs

Celebrex sales may have climbed 11 percent to $495 million in the third quarter, said Barbara Ryan, an analyst with Deutsche Bank Securities in Greenwich, Connecticut, in a report. Earnings may also have been helped by higher revenue from the top-selling drug Lipitor and lower costs from plant closings and job cuts.

Pfizer shares rose 38 cents, or 1.4 percent, to $28.10 at the close of New York Stock Exchange composite trading. The stock has gained almost 25 percent since mid-July, when Pfizer reported that second-quarter earnings beat analysts’ estimates.

Celebrex sales were hurt last year by its similarity to Vioxx. The U.S. Food and Drug Administration allowed Celebrex to stay on the market because there wasn’t enough data linking it with a higher risk of cardiovascular side effects, such as heart attacks or strokes.

Pfizer is also weighing whether to seek U.S. approval to market the drug to prevent colon cancer. An Aug. 30 study in the New England Journal of Medicine found that at higher doses, the pill reduces by almost 50 percent the chance of developing polyps, growths in colon tissue that can lead to tumors.

Second Price Rise

Celebrex is believed to cause a reduction in the recurrence of polyps by blocking an enzyme called Cox-2. Celebrex and Vioxx mute pain by inhibiting the same enzyme, which is involved in inflammation throughout the body.

Celebrex is the second Pfizer drug with which pricing has helped boost profit. The company raised second-quarter revenue from its Lipitor cholesterol pill, the world’s best-selling prescription medicine, by persuading doctors to prescribe higher doses that cost about 36 percent more. The drugmaker promoted studies showing the higher doses were more effective.

Pfizer must increase sales of existing products because competition from generic copies of its drugs has slowed revenue growth. Analysts say treatments being developed may not offset missed sales. By 2011, Pfizer expects to lose revenue because of generic competition to six products that made up almost half its 2005 sales, analysts have said.

`Aggressive Culture’

``They have an aggressive culture, but their near-term pipeline is not what I’d call robust,’‘ analyst Funtleyder said.

Pfizer partner Akzo Nobel NV said today that the companies’ experimental schizophrenia drug asenapine may face delays after the latest clinical tests showed ``mixed’‘ results. Asenapine may generate sales of $5 billion by 2015, according to Themis Themistocleous, head of equity research at UBS AG. Arnhem, Netherlands-based Akzo Nobel said it plans to meet U.S. regulators to discuss the medicine in early 2007.

The company named a new chief executive officer, Jeffrey Kindler, July 28 to help speed new drugs to market and lower costs. Pfizer will pay Kindler as much as $5.74 million in salary, bonus and stock options for his first year, about a third as much as his predecessor, Hank McKinnell, according to an Aug. 3 regulatory filing.

Ads in Newsweek

The advertising, in general readership magazines including Time and Newsweek, has focused so far on the pain benefit of Celebrex. One ad shows an older man walking up baseball stadium steps with a child and saying, ``52 steps won’t keep you from taking him out to the ball game.’‘

As of July, pharmacies filled 6.4 million Celebrex prescriptions, with an average price of $119.26.

Pfizer is telling doctors that Celebrex doesn’t have Vioxx’s side-effect profile. The company also will spend more than $100 million conducting at least four studies involving 40,000 patients evaluating safety and other potential uses, said Simon Lowry, medical director for Celebrex, in an Aug. 28 telephone interview.

``They clearly have been able to distance themselves’‘ from Vioxx, said Marta Wosinska, a Harvard University business school assistant professor.

The renewed marketing, which began in March after a yearlong hiatus, helped prompt JP Morgan’s Shibutani to raise sales estimates of Celebrex by $168 million to $2.2 billion in 2007 and by $241 million to $2.4 billion in 2008.

The company’s sales representatives have been telling doctors of studies showing the drug doesn’t pose a greater risk to hearts than a competitive class of painkillers which include older popular drugs such as ibuprofen and naproxen, said Lowry.

Pending Legal Cases

Pfizer will continue to have a problem with Celebrex’s public image because of pending legal cases, analysts say. The company faces more than 1,500 lawsuits over Celebrex and Bextra, a painkiller pulled from the market in 2005 that uses the same mechanism as Celebrex and Vioxx. The first trial, on claims Celebrex causes strokes, begins next year.

A study published Sept. 12 in the Journal of American Medical Association found Celebrex doesn’t raise heart risk and may protect against kidney damage and high blood pressure. On Aug. 30, the New England Journal of Medicine published a study of the drug’s use for colon cancer that found it doubled a patient’s chance of heart attack, stroke and heart failure when given at higher than normal doses.

Pfizer is analyzing the data and has ``not made a firm decision’‘ on whether to ask for FDA approval for preventing colon polyps, said Lowry, the Celebrex medical director.