Biotech
Tuesday, January 30th, 2024 3:47 pm EDT
Key Points
- Surprise Profit Despite COVID Business Decline: Pfizer reported a surprise adjusted fourth-quarter profit as its declining COVID business performed better than expected. The company reversed approximately $3.5 billion in revenue related to the expected return of 6.5 million doses of its COVID drug, Paxlovid, from the U.S. government, resulting in a hit less than initially anticipated.
- Financial Performance and Outlook: Pfizer’s COVID vaccine generated $5.36 billion in revenue for the quarter, down 53% from the same period last year but surpassing analysts’ expectations. The pharmaceutical giant recorded $14.25 billion in revenue for the fourth quarter, down 41% from the same period a year ago due to the decline in sales of its COVID products. Pfizer reiterated its full-year 2024 guidance, expecting revenue between $58.5 billion and $61.5 billion, including contributions from its recently closed acquisition of cancer drug developer Seagen.
- Challenges and Strategic Moves: Despite a challenging 2023 marked by a significant decline in demand for its COVID products, Pfizer’s non-COVID drugs showed operational growth of 8% in revenue for the fourth quarter. The company faced setbacks in a group of shots protecting against pneumococcal pneumonia, which brought in $1.60 billion in sales for the quarter, down 8% from the same period a year ago. Pfizer aims to restore investor confidence through its $43 billion acquisition of Seagen, focusing on cancer treatments, amid skepticism from Wall Street about the company’s ability to rebound. Pfizer’s stock fell approximately 40% in 2023 due to a global decline in demand for its COVID products, leading to slashed revenue forecasts and a comprehensive cost-cutting program. The company’s future in the weight loss drug market faces uncertainties after it scrapped a twice-daily version of its experimental weight loss pill, with investors awaiting data on a once-daily form in the first half of the year.
Pfizer surprised analysts by posting an adjusted fourth-quarter profit, despite a decline in its COVID business performing better than expected. The company reversed approximately $3.5 billion in revenue related to the anticipated return of 6.5 million doses of its COVID drug, Paxlovid, from the U.S. government. This hit was less than the initially expected $4.2 billion for the return of nearly 8 million doses. Pfizer’s COVID vaccine generated $5.36 billion in revenue for the quarter, a 53% decline from the same period last year, but beating analysts’ estimates. The pharmaceutical giant is implementing a $4 billion cost-cutting plan to improve its bottom line and boost investor confidence.
Pfizer’s fourth-quarter results exceeded Wall Street expectations for adjusted earnings per share but fell short on revenue. The company recorded $14.25 billion in revenue, down 41% from the same period the previous year, primarily due to a plunge in COVID product sales. Pfizer’s net loss for the quarter was $3.37 billion, or 60 cents per share, compared to a net income of $4.99 billion, or 87 cents per share, a year ago. Despite the challenges in its COVID business in 2023, excluding COVID products, Pfizer reported an 8% operational growth in revenue for the fourth quarter.
Pfizer’s COVID vaccine and Paxlovid revenue for 2023 totaled $12.5 billion, representing a 78% decline from their peak of $57 billion in 2022. Non-COVID products, including the new vaccine Abrysvo for respiratory syncytial virus and Vyndaqel drugs for cardiomyopathy, contributed to revenue growth. However, a group of shots protecting against pneumococcal pneumonia faced lower demand and unfavorable timing of customer orders, resulting in an 8% decline in sales.
The disappointing sales for the Prevnar family of shots might be a concern, as Merck’s positive outlook on its pneumococcal pneumonia vaccine franchise raises questions about Pfizer’s defense strategy for that part of its business. Pfizer’s stock fell approximately 40% in 2023, reflecting challenges in its COVID business and a less promising outlook in the weight loss drug market. The company’s $43 billion acquisition of Seagen, finalized in the fourth quarter, aims to restore investor confidence, especially with a focus on cancer treatments. Pfizer’s future prospects, including the once-daily version of the experimental weight loss pill, danuglipron, will be revealed in data expected during the first half of the year. Despite these efforts, skepticism on Wall Street persists, with Pfizer’s stock already down over 4% for the year, translating to a market value of around $155 billion. Pfizer is set to hold an earnings call with investors to discuss these results and its strategic outlook further.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/30/pfizer-pfe-q4-earnings-report-2023.html
