Pfizer settles lawsuit over Celebrex for $450M; profit falls

ByABC News
May 1, 2012, 3:26 PM

SALT LAKE CITY -- Pfizer has settled a lawsuit filed by Brigham Young University over development of the blockbuster painkiller Celebrex for $450 million.

Terms of the settlement weren't disclosed in an announcement Tuesday by the drug company and the Mormon Church-owned school in Utah. The drug company also released its latest earnings report.

BYU's lawsuit says a chemistry professor, Daniel Simmons, discovered the genetic workings of the drug in the early 1990s. It accused Pfizer of violating a research agreement the school made with predecessor companies.

As part of the settlement, BYU plans to endow a Dan Simmons Chair in recognition of his lifelong work advancing human health.

In earnings news, Pfizer said Tuesday that its first-quarter profit fell 19%, mainly because new generic competition to its blockbuster cholesterol pill Lipitor cut U.S. sales 15% as the drugmaker offered big rebates and discounts to keep patients on its brand.

The world's biggest drugmaker beat Wall Street's profit expectations but narrowly missed its sales forecast. It lowered its adjusted profit forecast for 2012 by 6 cents, to $2.14 to $2.24 per share. Analysts had predicted $2.26 per share. Including one-time items, it expects earnings per share of $1.23 to $1.38.

New York-based Pfizer said the change was due to its recent decision to sell its infant-nutirition business to Swiss food and drink giant Nestle for $11.85 billion. The steep drop in Lipitor revenue was factored into its previous forecasts.

The maker of Viagra said net income was $1.79 billion, or 24 cents per share, down from $2.22 billion, or 28 cents a share, a year earlier.

Excluding one-time items, Pfizer would have made $4.43 billion, or 58 cents per share. Analysts expected 56 cents.

Revenue totaled $15.4 billion, down 7% from $16.5 billion a year ago. Analysts were expecting $15.46 billion.

Sales in the U.S., where Pfizer's patent expired Nov. 30 for Lipitor, the top-selling drug in history, fell to $5.95 billion, from $7.02 billion. International sales edged up 1%, to $9.45 billion.

Lipitor sales fell 42%, to $1.4 billion from $2.39 billion.

"I am pleased with our first-quarter 2012 financial performance, which was driven by growth in certain brands including Celebrex, Enbrel and Lyrica, growth in key geographies such as China" and cost-cutting, CEO Ian Read said.

Revenue from prescription medicines fell 8% to $13.07 billion, as sales declined in the oncology, primary care and specialty care businesses.

Revenue from pain reliever Celebrex climbed 7% to $634 million, Enbrel for immune system disorders rose 3% to $899 million and Lyrica, for fibromyalgia and pain, jumped 16% to $955 million.

Generic competition cut total revenue by $1.3 billion, Read noted.

Pfizer's sales in emerging markets, considered the industry's best prospect for growth as developed countries try to rein in their spending on medicine, rose 6% to $2.3 billion.

The established products business, which sells medicines that have gone off patent but remain popular, jumped 18%, to $2.8 billion. That was mainly because Lipitor revenue was shifted to that business, from the primary care business.

Specialty care revenue likewise was affected by shifting two smaller sellers that got generic competition to established products, Xalatan for glaucoma and anti-fungal medication Vfend.

The animal health business saw revenue rise 4% to $1.03 billion, while revenue from consumer health products such as Centrum vitamins fell 1% to $735 million. The soon-to-be sold infant nutrition business posted a 9% jump in revenue, to $513 million.