Biotech
Thursday, May 23rd, 2024 3:26 pm EDT
Key Points
- Pfizer launches new multiyear cost-cutting program to rebound from Covid business decline
- Program, in addition to existing $4 billion effort, aims to save $1.5 billion by 2027 through operational efficiencies
- One-time costs of $1.7 billion expected, including employee severance, with focus on product portfolio enhancements and manufacturing changes
Pfizer has unveiled a new multiyear cost-cutting initiative aimed at bolstering its financial standing following a significant downturn in its Covid-related business. This program, supplementing a previously announced $4 billion cost reduction plan, will initially focus on operational efficiencies, with anticipated savings of approximately $1.5 billion by the end of 2027. While this move is expected to incur one-time costs of around $1.7 billion, including severance expenses for an unspecified number of affected employees, Pfizer envisions it encompassing broader enhancements such as product portfolio improvements and adjustments to its manufacturing and supply chain. Emphasizing the streamlining of operations and productivity enhancement within Pfizer Global Supply, the pharmaceutical giant acknowledges the complexity and phased nature of this undertaking due to manufacturing intricacies and extended lead times. The announcement seeks to assuage investor concerns following Pfizer’s stock decline of nearly 50% in 2023, attributed largely to dwindling demand for Covid-related products and market disappointments such as the underwhelming launch of a new RSV shot and a weight loss pill that fell short in clinical trials. However, Pfizer’s recent first-quarter financial results, surpassing expectations and accompanied by an increased full-year earnings outlook, have provided a boost in investor confidence. CEO Albert Bourla expressed cautious optimism about the company’s prospects during an earnings call, which was reflected in a 6% increase in Pfizer’s stock value and a subsequent rise of nearly 14% since then.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/22/pfizer-announces-new-cost-cutting-program.html
