Pfizer Inc. (NYSE:PFE) surprised investors by reporting it is ending advancement of an experimental cholesterol-lowering medication that was expected to be a blockbuster, and posted third-quarter earnings that came short of analysts’ projections.
Bococizumab reported to have unexpected side effects and moreover, it was turning out to be less effective over time. Stopping two final-stage phases of the treatment will have negative impact on full-year adjusted earnings. Two similar medications are already sold by peers, and sales of Pfizer’s were estimated to touch $958 million by 2022. Market experts said that this news came unexpected, and was unusual considering the late-stage advancement of the product. This step further narrows company’s already-thin pipeline.
The profit in 3Q2016 came at 61 cents a share, short of the estimate of 62 cents a share. CEO Ian Read stated that the firm decided to stop development of bococizumab after evaluating the competitive landscape and closing it wouldn’t meaningfully benefit patients or achieve commercial success. Read said the firm recently received results that proved a “substantial” lessening of the medicine’s impact on subjects’ LDL cholesterol at 1 year. Also, immune system responses were noted in subjects on the medication, and reactions at the point of injection.
For the first time, the company has missed profit estimates since 1Q2013, and the distress comes after numerous attempts by Pfizer to implement major strategic changes. A couple of months ago, the company decided not to split into 2 firms, ending 4 years of speculation of a probable breakup, and to keep older medicines and new products that have lost patent. Pfizer, which moved away from a $160 billion deal in April due to regulatory hurdles, is using contracts to add promising medications.
In 3Q2016, the revenue surged 7.9% to $13.1 billion, and successfully met the analysts’ estimates. Pain medicine of Lyrica revenue jumped 2% $1.24 billion, compared to projections of $1.23 billion. For FY2016, Pfizer expects adjusted EPS to come in between $2.42 per share and $2.47 a share, excluding expenses of 4 cents for the suspension of the bococizumab development plan.