Pfizer pulls plug on cholesterol-lowering drug

Pfizer has surprised investors by announcing it is ending development of an experimental cholesterol-lowering drug that was projected to be a blockbuster, and reported third-quarter earnings that fell short of analysts' estimates. The drug, an injection called bococizumab, had unexpected side effects and was becoming less effective over time, Pfizer said in a statement.

Stopping two large, final-stage tests of the treatment will lower full-year adjusted earnings by four US cents a share. Two similar drugs are already sold by competitors; sales of Pfizer’s were projected to reach $958 million by 2022, according to analysts’ projections.

“This news was unexpected and unusual given the late-stage of development of the product,” Tim Anderson, an analyst with Sanford C Bernstein, which rates the stock as outperform, wrote in a note to investors. He said the decision narrows Pfizer’s “already-thin” pipeline.

Third-quarter profit was 61 cents a share, the drugmaker said in a statement, just short of the 62-cent average of analyst predictions. It is the first time Pfizer’s profit has missed projections since the first quarter of 2013. The disappointment comes after several attempts by the company to make major strategic changes.

Pfizer decided in September not to split into two companies, ending four years of speculation of a possible break-up, and to simply keep new products and older medicines that have lost patent or are close to doing so into separate units.

Pfizer, which walked away from an about $160 billion merger with Allergan in April in the face of regulatory hurdles, is also using deals to add promising drugs. It recently outbid a group of rivals to buy Medivation and its blockbuster cancer treatment for $14 billion.

To offset expiring patents on drugs like the pain pill Celebrex, Pfizer has been relying on its innovative division, led by breast cancer drug Ibrance, blood thinner Eliquis and rheumatoid arthritis pill treatment Xeljanz. Sales of Ibrance more than doubled to $550 million, ahead of projections. Pfizer is working on expanding the label for the drug, which could face competition soon from treatments developed by Novartis and Eli Lilly. Analyst predict that the treatment will reach $5.8 billion in sales by 2020.

Xeljanz sold $235 million, against projections for $218 million. Overall, Pfizer revenue rose rose 7.9 per cent to $13.1 billion, in line with analysts’ projections.

For 2016, Pfizer sees adjusted earning per share of $2.42-$2.47 a share, excluding costs of four cents for the discontinuation of the bococizumab development program. – (Reuters)