Pfizer lowers guidance due to Hospira manufacturing issues
While releasing Q3 financials this week, Pfizer announced it had lowered its guidance range for revenues to $53bn (€46.5bn) to $53.7bn for the full year, down from its previous estimate of $53bn to $55bn.
In a call with investors shortly after the announcement, Frank D’Amelio, Pfizer’s CFO, outlined the difficulties the company’s Essential Health unit was experiencing, which resulted in a third-quarter operational decrease of revenues by 4%.
Firstly, he noted that the company had experienced 14% operational decline in its legacy established products portfolio (containing products that have lost patent protection) in developed markets due to generic competition and wider pricing pressures.
Secondly, D’Amelio noted a “9% operational decline in the sterile injectables portfolio in developed markets, primarily due to continued legacy Hospira product shortages in the US.”
Pfizer acquired the Hospira manufacturing network in 2015 in a $17bn deal; however, despite taking action to reduce the complexity of production, the segment has been beset by issues.
This year, Hospira was issued a US FDA Form 483 concerning its manufacturing facility in Tamil Nadu, India, as well as experiencing problems within its US manufacturing network.
However, Ian Read, CEO, noted in the investor call that the company expects the situation to “significantly improve by the end of 2019.”
Though the company had a muted outlook for revenue this year, the firm appeared more positive about the years to come – particularly in regard to the potential within its pipeline.
Read stated, “we continue to see the potential for approximately 25 to 30 approvals through 2022, of which up to half have the potential to be blockbusters.”
Incoming CEO, Albert Bourla, continued the positive message by suggesting that the company is preparing for an “era of sustained growth” and that this would begin “post-2020”.
In line with this, the company announced earlier this year that it would restructure its business, in 2019, into three units, Innovative Medicines, Established Medicines and Consumer Healthcare.