Biotech
Wednesday, December 13th, 2023 3:18 pm EDT
Key Points
- Revenue Forecast and Cost-Cutting Plan: Pfizer’s shares declined as the company forecasted 2024 revenue and profit below Wall Street expectations, citing weak demand for its once-profitable Covid products. The anticipated revenue for 2024 is in the range of $58.5 billion to $61.5 billion, falling short of the estimated $63.17 billion by analysts. Concurrently, Pfizer increased its cost-cutting plan target by an additional $500 million, bringing the total to $4 billion.
- Lowered Expectations for Covid Products: Pfizer expects $5 billion in 2024 revenue from its Covid vaccine and $3 billion from the antiviral pill Paxlovid, resulting in a total of $8 billion from Covid products. However, this falls significantly short of the anticipated $13.8 billion in combined 2024 sales according to analysts. Pfizer’s CFO, Dave Denton, mentioned that the lowered revenue expectations for Comirnaty and Paxlovid in 2024 are despite not expecting significant changes in Covid vaccination and infection rates compared to the current year.
- Focus on Cancer Drugs from Seagen: As Pfizer seeks to address challenges beyond the pandemic, the company aims to shift investor focus toward its record drug pipeline, including cancer drugs acquired through the $43 billion acquisition of Seagen. Pfizer anticipates Seagen’s products contributing $3.1 billion to 2024 revenue, with a long-term expectation of $10 billion in revenue by the end of the decade. Seagen is a leading developer of antibody-drug conjugates (ADCs), a sought-after category of cancer drugs, with other pharmaceutical giants like Merck, Bristol Myers Squibb, and AbbVie entering billion-dollar deals to access ADCs.
Pfizer’s shares experienced a decline after the pharmaceutical giant provided a 2024 revenue and profit forecast below Wall Street expectations, citing weak demand for its once highly profitable Covid products. The company also increased the target for its cost-cutting initiative by an additional $500 million, now totaling $4 billion.
Pfizer’s projection for 2024 revenue is in the range of $58.5 billion to $61.5 billion, falling short of Wall Street estimates of $63.17 billion. This suggests that revenue in 2024 may decline or remain flat compared to the current year, where Pfizer expects full-year revenue of $58 billion to $61 billion. The company anticipates $5 billion in 2024 revenue from its Covid vaccine and $3 billion from the sales of its antiviral pill Paxlovid, bringing the total from Covid products to $8 billion. This figure is considerably lower than the expected $13.8 billion in combined 2024 sales according to analysts.
During an investor call, Pfizer’s CFO, Dave Denton, explained the lowered revenue expectations for Comirnaty and Paxlovid in 2024, despite not anticipating significant changes in Covid vaccination and infection rates compared to the current year.
Pfizer also forecasts adjusted earnings in the range of $2.05 to $2.25 per share, significantly lower than the expected adjusted profit of $3.16 according to analysts. Notably, the company expects a 40-cent per share impact from financing costs related to its $43 billion acquisition of cancer drug developer Seagen, set to be formally closed on Thursday.
Following the release of the forecast, Pfizer’s stock experienced a 9% drop in morning trading. The pharmaceutical giant’s shares have declined by over 40% throughout the year, trading below its early 2020 pandemic levels. The repercussions extended to Pfizer’s German Covid vaccine partner, BioNTech, with a more than 3% decline in shares, and to its rival, Moderna, experiencing a roughly 3% slide.
Despite Pfizer’s significant gains from its Covid products, the company has faced challenges transitioning beyond the pandemic, struggling to convince investors about its growth potential. Pfizer aims to shift investor focus to its robust drug pipeline, particularly highlighting its acquisition of cancer drug developer Seagen. The pharmaceutical company anticipates Seagen’s products to contribute $3.1 billion to 2024 revenue, with a long-term expectation of $10 billion in revenue by the end of the decade. Seagen specializes in antibody-drug conjugates (ADCs), a sought-after category of cancer drugs, with recent billion-dollar deals involving other pharmaceutical giants like Merck, Bristol Myers Squibb, and AbbVie.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/13/pfizer-forecasts-2024-revenue-below-wall-street-expectations.html
