Jul 28, 1:35 PM EDT

Drugmaker Pfizer beats 2Q net income and revenue expectations, raises forecast


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Pfizer Inc. beat Wall Street's second-quarter expectations and raised its 2015 forecast, as soaring sales for a few key products helped inoculate the world's second-largest drugmaker against a $1 billion revenue hit from foreign exchange rates and its last wave of cheap generic competition hurting former big sellers.

Though net income dropped 10 percent, shares of the New York-based maker of Viagra started climbed Tuesday.

The drugmaker, which has struggled in recent years, touted its third straight quarter with operational growth and prospects to have 10 drugs in testing by next year in the hot field of immune-oncology - medicines that boost the immune system to better fight cancer.

Rivals Merck & Co. and Bristol-Myers Squibb Co. have an early lead in the field, with three lucrative medicines between them. But many drugmakers are jumping in.

Pfizer's experimental drugs "could actually be among the first wave" of drugs for ovarian, gastric and bladder cancer and some other types, research head Mikael Dolsten said in an interview.

"We can be competitive in the immune-oncology space," CEO Ian Read said, saying Pfizer will be able to combine those drugs with each other, with ones from partner drugmakers and with other types of cancer medicines to improve patient outcomes.

Pfizer drew on 37 percent revenue growth from Prevnar 13, the world's top-selling vaccine, as a recent study showing its effectiveness in preventing pneumonia and other dangerous infections in older adults boosted the vaccine's use. Prevnar 13, which protests against pneumonia, meningitis and other pneumococcal diseases, brought in $1.5 billion during the quarter.

Vaccines are a core research area for Pfizer, which has expanded its research with the goal of essentially protecting customers from cradle to grave. It has new vaccines against meningitis and encephalitis and, if testing goes well, could launch one against deadly Staphylococcus aureus within 3 years.

"Nothing but good news this quarter from Pfizer, including a strong start for its Ibrance drug for breast cancer," wrote analyst Erik Gordon of the University of Michigan's Ross School of Business.

Ibrance brought in $140 million - roughly double analysts' expectations - and rheumatoid arthritis pill Xeljanz, stymied by entrenched competition, finally gained traction, nearly doubling sales to $128 million.

However, revenue from painkiller Celebrex sank 71 percent to $224 million, as U.S. generic competition eroded sales. Competition from cheaper generic alternatives, either here or in other countries, also hurt antibiotic Zyvox and Pfizer's top product, fibromyalgia treatment Lyrica.

Net income fell to $2.63 billion, or 42 cents per share. Adjusted for one-time items, that amounted to 56 cents per share, beating analysts' expectations for 51 cents.

Revenue fell 7 percent to $11.85 billion but still topped forecasts for $11.41 billion. Excluding the impact from currency rates, Pfizer said revenue grew 1 percent in the quarter.

Pfizer now expects 2015 adjusted earnings of $2.01 to $2.07 per share, up from its previous forecast for $1.95 to $2.05 per share.

Pfizer shares rose 85 cents, or 2.5 percent, to $35.19 in afternoon trading.

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AP Business Writer Tom Murphy in Indianapolis contributed to this story.

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Follow Linda A. Johnson at http://www.twitter.com/LindaJ-onPharma

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