Pfizer 3Q Results Impacted by Supply Issues of Some Sterile Injectable Drugs
As part of its third-quarter earnings, Pfizer reported lower-than-anticipated revenues from its Essential Health business segment primarily due to continued legacy Hospira sterile injectable pharmaceuticals (SIP) product shortages in the US. The company reported a 9% operational decline in its SIP portfolio in developed markets. The SIP product shortages relate to manufacturing issues in the Hospira manufacturing network, which Pfizer says it is remediating.
“We reported solid third-quarter 2018 financial results, with total company revenues up 2% operationally, driven by the continued growth of key brands such as Eliquis, Ibrance, Prevnar 13, Xeljanz and Xtandi, as well as biosimilars and emerging markets,” Ian Read, Chairman and Chief Executive Officer, said in the company’s third-quarter earnings release of October 30, 2018. “The performance of these growth drivers was partially offset by product losses of exclusivity, a decline in Legacy Established Products in developed markets and ongoing legacy Hospira sterile injectable supply shortages.”
Revenues in Pfizer’s Essential Health business segment, which includes its legacy products (i.e., products late in the product life-cycle, generics, and biosimilars), declined 4% operationally, negatively impacted by several issues, including a 9% operational decline in its SIP portfolio in developed markets, primarily due to the US legacy Hospira product shortages. Pfizer narrowed its 2018 revenue guidance range from a range of $53 billion to $55 billion to a range of $53 billion to $53.7 billion, primarily reflecting lower-than-anticipated revenues in its Essential Health business segment.
Pfizer reported total global revenues from its SIP portfolio of $1.239 billion for the third-quarter 2018, down 3% year over year. US SIP revenues for the third quarter were $567 million, down 9% from the year-ago period. International revenues from its SIP portfolio in the third quarter of 2018 were $672 million, up 4% year over year.
Earlier this year (June 2018), the US Food and Drug Administration (FDA) reported on drug shortages of several drugs, including injectable opioid analgesics. The FDA reported that shortages of these particular drugs were caused by production delays due to a number of changes and upgrades at a Pfizer facility in Kansas, which were further exacerbated by issues related to manufacturing quality at the same facility. At the time of the June announcement, FDA said that Pfizer expected the delays to continue until 2019.
In February 2018, the FDA upgraded the status of Pfizer’s fill/finish manufacturing facility in McPherson, Kansas. Pfizer received a Warning Letter in 2017 following an FDA inspection of the facility. The upgraded status lifted a compliance hold on approval of pending applications of products made at the facility.
In its third-quarter 2018 10-Q filing with the US Securities and Exchange Commission filed August 9, 2018, Pfizer noted the product shortages relating to the Hospira manufacturing network. “Within our Essential Health portfolio, we have been experiencing product shortages with some products. The product shortages are primarily for products from the legacy Hospira portfolio and are largely driven by capacity constraints, technical issues and supplier quality concerns. In addition to the McPherson facility, we continue to remediate issues at other legacy Hospira facilities manufacturing sterile injectables within our Essential Health portfolio. Any continuing product shortage interruption at these manufacturing facilities could negatively impact our financial results, specifically in our SIP portfolio. We continue with our comprehensive remediation plan to upgrade and modernize these facilities, and we expect additional capacity to be available in 2019 onwards.”