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Pfizer reported a loss in the third quarter as it tries to adapt to the faltering demand on its Covid-19 drug and vaccines.
Pfizer reported a net loss of $2.38 billion last quarter, missing analyst expectations, the pharmaceutical giant said Tuesday. Revenues fell 42% from a year ago to $13.2 billion and were lower than the average analyst estimate of $13.5 billion.
Sales from the Comirnaty vaccine and Paxlovid antiviral drug plummeted. The revenue from the vaccine fell by 70% and Paxlovid sales plunged 97% in the third quarter. The drugmaker also reiterated its revised full-year guidance from about two weeks ago and slashed the expected revenue by $9 billion to the range of $58 to $61 billion. This largely resulted from the lack of demand for Covid-related products and non-cash inventory write-offs, leading to a $5.6 billion charge.
In this post-Covid transition period, Pfizer is refocusing on cutting costs and growing its portfolio to both keep investors interested and overcome the challenges ahead like post-pandemic revenue loss and a looming patent cliff on its popular drugs.
“When we look at the Pfizer release, I’d say it was largely in line with what we were anticipating,” said Damien Conover, director of healthcare equity research for Morningstar, referring to the revised guidance.
Conover thinks the patent cliff is one of the major challenges Pfizer faces in the near future. “They do have some pretty big patent losses and it’s probably what the market is a little bit more concerned about with Pfizer and hence why it trades at a little bit more of a depressed earnings multiple,” he said.
Pfizer’s stock fell 1.5% to close at $30.58 on Tuesday. Shares have plunged by 40.4% since the beginning of the year, placing the company’s value at $172.5 billion.
Flush with cash from Covid-19 products, Pfizer has been making acquisitions in the past couple years. Nurtec ODT/Vydura and Oxbryta, which were acquired at the end of 2022, posted $233 million and $85 million in sales respectively. The company is also awaiting the FTC approval of its $43 billion acquisition of cancer specialist Seagen, which it expects to generate $10 billion in revenue by 2030.
Pfizer has been launching new products to steer investors’ attention to its growing and diversifying portfolio. Last year the leadership set a goal of launching 19 new products in 18 months and has completed 13 of the originally planned potential launches, with four other products approved, Chief Executive Officer Albert Bourla said on the earnings call.
The new products include vaccines for RSV and meningococcal infection, as well as medications for a range of diseases like ulcerative colitis, alopecia and migraines.
“We are encouraged by the strong performance of Pfizer’s non-COVID products in the third quarter of 2023, including significant contributions from new launches and robust year-over-year growth for several key in-line brands,” Bourla said at the earnings call.
Revenues for Pfizer’s non-Covid products grew 10%. Its widely-used blood thinner Eliquis showed $1.49 billion in sales. Meanwhile, Abrysvo, the new RSV vaccine, raked $375 million in revenues in the third quarter.
“The RSV vaccine that they have is off to a nice start,” said Conover. “I thought that was encouraging from the news today and that will probably continue to develop into a multi billion dollar product for them.”
Many eyes are on Pfizer’s development of oral obesity pill Danuglipron, still in the trial phase. The company didn’t disclose any specific results of the trials on the call, but analysts are closely watching the upcoming information as obesity drugs are becoming a main revenue driver for pharma giants like Novo Nordisk and Eli Lilly, producers of the obesity and diabetes drugs Ozempic, Wegovy and Mounjaro. to drive revenues for the pharmaceutical sector.