Pfizer Inc., the world's largest drug maker, reported on Thursday that its profit in the first quarter slumped 18 percent as generic competition slashed sales of drugs.
Its net income declined to $2.8 billion, or 41 cents a share, compared with a net income of $3.4 billion or 48 cents the same period in 2007.
Revenue fell 5 percent to $11.8 billion. Pfizer earned 61 cents per share excluding charges for the buyouts of CovX and Coley Pharmaceutical Group.
According to Bloomberg and Thomson Financial estimates, analysts expected the company to report first quarter earnings of 66 cents.
The company had a decrease in sales of $777 million due to competition from generics for its cholesterol pill Lipitor and its blood pressure treatment Norvasc.
Pfizer is facing drug patent expirations and is taking measures to support its financial position. It will reduce costs by $1.5 billion to$2 billion by the end of 2008.
Sales of the drug Lipitor fell 7 percent to $3.14 billion. Lipitor is the best selling cholesterol drug globally and it is Pfizer's main revenue source. However Lipitor's patent which was licensed to Pfizer will expire in 2010, opening opportunities for generic makers.
The anti-smoking drug Chantix contributed to the company revenue as it rose 71 percent to $277 million. The drug has raised concerns on psychiatric side effects as the company said an unusual number of patients taking Chantix committed or attempted suicide. The company has not made a definitive link to the behavior.
Other products such as Lyrica, a treatment for Fibromyalgia rose 47 percent to $582 million, Celebrex rose 2 percent to $611 million.
Pfizer confirmed its forecast for revenue for 2008 of $47 billion to $49 billion and earnings of $2.35 to $2.45 a share excluding certain items.
Shares of Pfizer fell 70 cents, or 3.32 percent to close at $20.40.