Will Pfizer's (PFE) BioPharma Unit Boost Its Q4 Earnings?

Pfizer, Inc. (NYSE:PFE) Biopharmaceuticals Group comprises six business units — Oncology, Inflammation & Immunology, Rare Disease, Hospital, Vaccines and Internal Medicine. It is the company’s key top-line driver.

Within the Biopharma group, oncology sales are likely to have risen in the fourth quarter, driven by higher sales of Ibrance, Inlyta, Xalkori and alliance revenues from Astellas for Xtandi.

Continued strong uptake in international markets and consistent growth in the United States are likely to have driven Ibrance’s sales. Importantly, U.S. sales of Inlyta rose significantly in the third quarter, gaining from FDA approvals in 2019 for the combination of Inlyta plus Pfizer’s Bavencio and Inlyta plus Merck’s (NYSE:MRK) Keytruda in first-line treatment of advanced renal cell carcinoma patients. The trend is expected to have continued in the fourth quarter.

In non-oncology area, sales of drugs like Xeljanz, alliance revenues from Bristol-Myers (NYSE:BMY) for Eliquis and Chantix are likely to have provided top-line support. Regarding Xeljanz, continued growth in rheumatoid arthritis (RA) revenues and contributions from launches in new indications, psoriatic arthritis and ulcerative colitis (UC) are likely to have driven sales.

In July 2019, Xeljanz’s prescribing information in the United States was updated by the FDA to include two additional boxed warnings as well as changes to the indication and dosing for UC following review of a post-marketing study. Regarding this update, Pfizer mentioned on the third-quarter conference call that it was not sure how the label update will affect prescribing trends of the drug in the future quarters. An update is expected on the fourth- quarter call.

The Zacks Consensus Estimate for sales of Ibrance (worldwide) and alliance revenues from Eliquis is $1.36 billion and $1.05 billion, respectively. The Zacks Consensus Estimate for Inlyta and Xeljanz’s sales is pegged at $150 million and $616 million, respectively.

Pfizer’s shares have declined 0.6% in the past year against an increase of 16.8% for the industry.

Importantly, new drug Vyndaqel, which was launched in the United States in May 2019 for the treatment of the transthyretin amyloid cardiomyopathy, recorded sequentially higher sales in the third quarter, a trend likely to have continued in the to-be-reported quarter.

However, sales of some key drugs like of Prevnar 13/Prevenar 13 and Enbrel declined in the past two quarters. While sales of Prevnar 13/Prevenar suffered as a result of decreased government purchases for the pediatric indication and continued decline in revenues for the adult indication in the United States, Enbrel revenues in key European markets declined due to continued biosimilar competition. It remains to be seen if sales of these drugs have improved this time around. Pfizer has exclusive rights to Amgen’s (NASDAQ:AMGN) blockbuster RA drug, Enbrel, outside the United States and Canada.

The Zacks Consensus Estimate for sales of Enbrel and Prevnar is $439 million and $1.5 billion, respectively.

Overall, in the fourth quarter, higher sales of the Biopharma segment and strong emerging markets sales are likely to have made up for lower sales in the Upjohn group. (Read More: Pfizer Q4 Earnings Coming Up: What's in the Cards?)

Pfizer currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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