July 20 (Bloomberg) -- Profits of Pfizer Inc., Roche Holding AG and Wyeth exceeded analysts' estimates on sales of premium- priced drugs for cholesterol and cancer and a vaccine to prevent pneumonia and meningitis.

Pfizer, the world's largest drugmaker, reported that second- quarter profit rose 10 percent as sales of its Lipitor cholesterol pill unexpectedly jumped 9 percent. The New York- based company's shares climbed as much as 2.4 percent.

Switzerland's Roche, the world's biggest maker of cancer medicines, said first-half profit increased 38 percent as more patients used the Avastin and Herceptin tumor treatments, and the stock reached a record high. Madison, New Jersey-based Wyeth's second-quarter net climbed 9 percent as sales of the Prevnar vaccine for pneumonia and meningitis surged 60 percent.

``Revenue growth is better than expected and gross margins are better than expected, despite patent expirations,'' said Lehman Brothers analyst Tony Butler in New York in an interview. ``Five or six years ago when there were expirations, there were downward revisions. Now we are seeing upward revisions.''

The three drugmakers have been investing in expensive new treatments to offset competition from cheaper generic copies of older drugs. Demand for Pfizer's Lipitor, the world's top-selling drug at $12.2 billion last year, had been expected to weaken as patients start switching to inexpensive versions of Merck & Co.'s competing Zocor cholesterol pill.

Ranbaxy Beats Estimates

India's Ranbaxy Laboratories Ltd., one of the makers of generic Zocor for the U.S., also reported earnings that exceeded analysts' expectations. The Gurgaon, India-based drugmaker reported a 20 percent gain in second-quarter profit on higher sales of generic medicines in the U.S.

Investors bid up shares of all four companies. Pfizer gained 41 cents, or 1.8 percent, to $23.71 at 4:24 p.m. in New York Stock Exchange composite trading, the fourth straight increase after a five-day slide. Wyeth shares rose 66 cents, or 1.5 percent, to $44.99.

In Zurich, Roche shares climbed 6.8 francs, or 3.3 percent, to 214.9 francs at 5:30 p.m. They have risen 9 percent this year. Ranbaxy shares rose 24 rupees, or 7.4 percent, to close at 349.9 rupees on the Bombay Stock Exchange, the biggest increase since May 2.

Pfizer Results

Sales of Lipitor, the Celebrex pain pill and other Pfizer drugs benefited from higher prices and new demand because of a U.S. government-subsidized drug benefit under the Medicare program for Americans aged 65 and older, analysts said.

Pfizer sales rose for the first time in a year, gaining 2.5 percent to $11.7 billion, the company said today in a statement.

Profit climbed to $3.7 billion, or 50 cents a share, excluding merger-related costs, from $3.3 billion, or 45 cents, a year earlier, not counting a $1 billion tax benefit on overseas profit returned to the U.S., Pfizer said.

Net income declined 30 percent to $2.41 billion, or 33 cents a share, from $3.46 billion, or 47 cents a share, including the tax benefit.

For all of this year, Pfizer raised its earnings forecast to $2 a share from $1.93, excluding purchase-accounting adjustments, merger-related costs and discontinued operations. Pfizer is selling its consumer health products unit this year to Johnson & Johnson for $16.6 billion.

Sales of Lipitor, introduced in 1996, jumped 12 percent last year. Chief Executive Officer Hank McKinnell, 63, today repeated his target of increasing revenue from the drug by 6.5 percent this year to $13 billion, ``a stretch goal.''

Since June 23, when the U.S. patent expired on Zocor, cheap generic copies have helped reduce Lipitor's share of new prescriptions to 29 percent from an average of about 33 percent in previous weeks, according to data from IMS Health Inc., a Fairfield, Connecticut-based market-research company.

Generic Zocor may soon drive the drug's U.S. price down by as much as 80 percent from $4.50 a pill, putting even more pressure on Lipitor. The Pfizer drug sells for $3.33 each on the Web site Drugstore.com.

Roche Earnings

Roche's net income grew to 3.97 billion Swiss francs ($3.19 billion), or 4.90 francs a share, from 2.88 billion francs, or 3.80 francs, a year earlier, Roche said in a statement. Analysts surveyed by Bloomberg had a median profit estimate of 3.55 billion francs. Revenue rose 16 percent to 20 billion francs.

The Basel, Switzerland-based drugmaker said sales will probably grow 10 percent or more this year, compared with an industry average of 7 percent. Chief Executive Officer Franz Humer is boosting revenue by showing that Roche's drugs work on different types of cancer and should be prescribed earlier.

``Roche has a great pipeline in cancer,'' an area where new drugs command high profit margins, said Dieter Buchholz, who helps manage $3 billion, including Roche shares, at BNP Paribas Private Banking in Zurich.

The Avastin colon cancer treatment costs about $44,000 for a 10-month treatment course. Roche's majority-owned U.S. partner Genentech Inc., developer of Avastin, has asked U.S. regulators to review the drug for use in lung and breast malignancies. Roche and Genentech are testing the medicine in 25 types of cancer.

Wyeth Results

Wyeth's earnings rose for a fourth straight quarter to $1.1 billion, or 78 cents a share, from $976 million, or 72 cents, a year earlier. Revenue increased 9.4 percent to $5.2 billion, the drugmaker said.

Wyeth's earnings beat analyst estimates by two cents as global pharmaceutical sales rose 11 percent. Prevnar generated $518 million. The treatment costs $274 for a four-dose inoculation, Wyeth said.

Sales of Wyeth's Effexor, the world's best-selling antidepressant, climbed 3 percent to $918 million in the quarter. Revenue from Enbrel, which treats rheumatoid arthritis, jumped 36 percent to $370 million, the company said.

Wyeth raised its annual earnings projection last week to more than $3.07 a share from the previous estimate of $2.97 to $3.07 a share, citing an expected increase in sales.

Baxter International

Baxter International Inc., a maker of pharmaceuticals and medical devices, said second-quarter profit fell 4 percent on costs to address flaws in drug-delivery pumps. The shares rose the most in four years after the company increased its annual forecast.

Net income declined to $309 million, or 47 cents a share, from $322 million, or 51 cents, a year earlier, Deerfield, Illinois-based Baxter said today in a statement. Sales rose 2.8 percent to $2.65 billion.

To contact the reporters on this story: Shannon Pettypiece in Washington at spettypiece@bloomberg.net; Carey Sargent in Geneva at csargent3@bloomberg.net.

Last Updated: July 20, 2006 16:26 EDT