WASHINGTON, Jan. 30 (UPI) -- Wyeth's fourth-quarter 2006 earnings fell short of Wall Street's expectations, leaving analysts split on how they think the company will fare going forward.
Bank of America analyst Chris Schott said Wyeth's numbers showed strong revenue growth, and he expects them to continue the performance.
"We believe Wyeth, trading at a 10 percent discount to the pharma group, is attractively valued, given its limited patent expirations and significant near-term pipeline opportunities," Schott stated in a research report issued Tuesday.
He also liked Effexor's numbers, which came in at $936 million, an increase of 11 percent.
Schott said upcoming catalysts for the company include resolution of the issues surrounding its Puerto Rico manufacturing plant and approval of Pristiq for vasomotor symptoms associated with menopause. Wyeth received an approvable letter from the Food and Drug Administration for Pristiq earlier this month for a separate new drug application seeking an indication for major depressive disorder.
Despite his enthusiasm for Wyeth, Schott still has some concerns about how much the company's 2007 guidance depends on Pristiq's launch and drivers behind the strong Effexor performance.
Bank of America did not respond to United Press International's request for comment from Schott.
Wyeth reported Tuesday its fourth-quarter earnings per share came in at $0.66, an increase of 20 percent but far short of Wall Street's consensus expectation of $0.71.
Wyeth's total revenues for the quarter increased 10 percent to come in at $5.22 billion for the quarter. Revenues for the year were up 9 percent to $20.4 billion.
Prevnar sales jumped 25 percent to $502 million. Zosyn sales were up 21 percent to $249 million, while Premarin/Prempro sales rose 20 percent to $262 million.
Wyeth forecast 2007 EPS would be $3.40 to $3.50 compared to the Street's consensus of $3.49.
"We achieved strong growth with all of our major products in 2006 and achieved a billion or multi-billion dollar status in annual sales in six product franchises," said Robert Essner, Wyeth's chairman and chief executive officer.
"With six regulatory filings involving four new pharmaceutical products completed during the year, combined with continued investments in R&D, Wyeth is positioned for strong growth in 2007 and beyond," Essner added.
"We feel that we had a great year," Wyeth spokesman Doug Petkus told UPI. "We finished right where we said we would be," he added.
Petkus noted that all of the company's major products exhibited growth, including Enbrel and Prevnar, and Wyeth expects to continue that performance in the year ahead.
"Strong growth is projected for all of them," Petkus said.
Enbrel is finding its way into new markets over time, including Japan, he said.
The company also sees growth opportunities for Prevnar, which is approved in 73 countries and is on 15 national immunization programs, including the United States and several European countries.
Wyeth is working on getting Prevnar added to more national immunization programs in the future.
"We are involved in confidential negotiations with several countries right now, so I'm unable to discuss at this time," Petkus said. "I can say there is potential in Europe, Latin America and Asia."
Prudential analyst Tim Anderson was down on Wyeth's performance, noting that the company's earnings came up short of both his and consensus estimates.
"The miss, at least relative to our forecast, is the result of higher than expected spending in SG&A and R&D and lower gross margins," Anderson stated in a research report issued Tuesday.
Operating expenses were up 7 percent to $4.12 billion, while R&D expenses increased 18 percent to $913 million. SG&A expenses came in at $1.77 billion and gross margins were 72.3 percent.
UPI was unable to reach Anderson for comment.
