The share price of pharmaceutical company Pfizer fell yesterday (May 5th) after it was revealed by the firm that it has recorded a sharp fall in its profits.
Stocks slipped in the US yesterday on the back of the announcement that profits for the first three months of the year were 15 per cent down on the figures for the same period in 2013.
Falling revenue was also revealed by the drugmaker in its latest financial results, which the firm explained was because various patents protecting the exclusivity of its products have expired.
Frank D'Amelio, Pfizer's chief financial officer, said in a statement that the financial performance of the company in the three-month period reflected the "continuing impact of product losses of exclusivity, the expiration and near-term termination of certain collaborations". He added that Pfizer's operating environment "remains challenging".
Pfizer has been making headlines in the last few weeks as news recently broke of a massive takeover bid for rival company AstraZeneca, which prompted leader of the Labour Party Ed Miliband to suggest a review should be ordered to look into competition in the pharmaceutical sector. Pfizer had launched a £63 billion offer for the UK firm in a merger offer that would create one of the largest companies on the planet if it was to go ahead.
Reasons for bid
Chairman and chief executive at Pfizer Ian Read said the firm believes there is "a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies."
News of the takeover bid led to a sharp increase in the value of AstraZeneca last week, but Pfizer's fortunes appear to be going the other way, especially after the firm revealed revenues fell nine per cent – a drop of more than a billion dollars – in the first quarter to $11.35 billion.
Yesterday, the share price of Pfizer fell by 2.57 per cent on the New York Stock Exchange, although stocks in the firm did recover by 0.2 per cent in after-hours trading in the US.
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