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Q2 2011 Earnings Call
August 02, 2011 10:00 am ET
Previous Statements by PFE
» Pfizer's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Pfizer's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Pfizer CEO Discusses Q3 2010 Results - Earnings Call Transcript
Charles Triano - Senior Vice President of Investor Relations
Frank D'Amelio - Chief Financial Officer, Executive Vice President of Business Operations and Member of Executive Compliance Committee
Geno Germano - President of Pfizer Specialty Care & Oncology and General Manager of Pfizer Specialty Care & Oncology
Olivier Brandicourt - President of Worldwide Primary Care Business and General Manager of Worldwide Primary Care Business
Amy Schulman - Executive Vice President, Corporate Secretary, General Counsel, Business Unit Lead of Pfizer Nutrition and Member of Executive Compliance Committee
Mikael Dolsten - Senior Vice President and President of Pfizer Worldwide Research & Development
David Simmons - President of Emerging Markets & Established Products units and General Manager of Emerging Markets & Established Products units
David Risinger - Morgan Stanley
Catherine Arnold - Crédit Suisse AG
John Boris - Citigroup Inc
Tim Anderson - Sanford C. Bernstein & Co., Inc.
Jami Rubin - Goldman Sachs Group Inc.
Michael Tong - Wells Fargo Securities, LLC
Seamus Fernandez - Leerink Swann LLC
Christopher Schott - JP Morgan Chase & Co
Gregory Gilbert - BofA Merrill Lynch
David Maris - CLSA Asia-Pacific Markets
Marc Goodman - UBS Investment Bank
Charles Butler - Barclays Capital
Good day, everyone, and welcome to Pfizer's Second Quarter 2011 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chuck Triano, Senior Vice President of Investor Relations. Please go ahead, sir.
Thank you, operator. Good morning, and thank you, all, for joining us today to review Pfizer's second quarter 2011 performance. I'm here with our CEO, Ian Read; Frank D’Amelio, our CFO; Olivier Brandicourt, President and General Manager of Primary Care; Mikael Dolsten, President of Worldwide Research and Development; Geno Germano, President and General Manager of Specialty Care and Oncology; Amy Schulman, General Counsel and Business Unit Lead for Nutritionals; and David Simmons, President and General Manager of Emerging Markets and Established Products. The slides that will be presented on this call can be viewed on our homepage at pfizer.com by clicking on the link for Pfizer Quarterly Corporate Performance Second Quarter 2011 located in the Investor Presentations section in the lower right hand of this page.
Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in Pfizer's 2010 annual report on Form 10-K and in our reports on forms 10-Q and 8-K. Also, the discussions during this conference call will include certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in Pfizer's current report on Form 8-K dated today, August 2, 2011. With that, I'll now turn the call over to Ian Read. Ian?
Thank you, Chuck. Good morning, everyone. During my remarks this morning, I will briefly recap the highlights from the quarter, touch on the announcement we made last month concerning our strategic portfolio review, highlight some of the progress we're making in our late-stage product portfolio and growing mid-stage pipeline and speak to some example to the progress and positive changes we are making and executing our R&D strategy.
Our results for the quarter are in line with our expectations and demonstrate that our business can remain resilient despite current macroeconomic challenges and the impact of loss of exclusivity of several products. While revenues were down slightly year-over-year, I would note that during the quarter, we absorbed a revenue impact of approximately $1.7 billion mainly due to LOEs in the U.S., Europe and Canada and several emerging markets in addition to U.S. healthcare reform.
Without these downward pressures, revenue would have been slightly up for the quarter. Although this loss of exclusivity have a dampening impact on the year-over-year growth comparisons, our prospects to launch innovative products and the earnings per share growth remains strong. Frank will take you through the details of the quarter, but here are a few of the noteworthy highlights.
Core patent-protected growth drivers such as Lyrica, Enbrel, the Prevenar franchise and Sutent continue to perform well in many geographies. Emerging Markets business experienced losses of exclusivity of Lipitor in Brazil and Mexico and Viagra in Brazil and still delivered revenue growth, both overall and operationally. We saw growth in key innovative brands primarily Enbrel, Prevenar franchise, Lyrica and Vfend and strong overall performance in key countries such as China, Turkey and India.
Volume overall within our Emerging Markets business increased 12% if you remove the impact from the LOEs. Despite quarter-to-quarter volatility, we continue to expect improving performance in Emerging Markets, reflecting strong performance from our core innovative products, as well as improvement within the Established Products portfolio as partnerships, such as the ones we have with Teuto in Brazil, result in new product launches.
For the first time, Animal Health business achieved a significant milestone delivering $1 billion in quarterly revenues. The Consumer Healthcare business reported solid revenue growth primarily driven by Robitussin, Advil Congestion Relief and a strong cough and cold season. We also just completed the sale of Capsugel.
We continue to improve the efficiency of the business through existing and newly identified process improvements and cost reduction initiatives, particularly in the work we're doing to improve R&D productivity, and we remain focused on taking actions to increase shareholder value.