Pfizer earnings weighed down by slump in demand for Covid shots
Drugmaker looks beyond vaccine as it reports quarterly loss on Paxlovid charge
Pfizer urged investors on Tuesday to focus on growth in non-Covid products such as the new RSV vaccine Abrysvo as slumping demand for Covid-19 vaccines and treatments pushed the drugmaker to its first quarterly loss since 2019.
The company last month said it would take a $5.6bn one-off charge to account for US government returns of millions of doses of its antiviral treatment Paxlovid, as well as inventory of Covid vaccine Comirnaty.
The drop in use of Covid vaccines and products as the pandemic receded has fuelled a 40% drop in Pfizer’s shares this year and could remain a drag, analysts have said. Pfizer’s share price was off about 1% in midday trading.
Pfizer will still be under pressure to meet its sales guidance for 2023, said BMO Capital analyst Evan Seigerman.
Sales of Paxlovid and the vaccine Pfizer makes with German partner BioNTech had boosted revenue to record levels in the past two years. However, annual vaccination rates have dropped sharply and demand for treatments has dipped as population-wide immunity levels rose.
“We have rebased our Covid expectations,” CEO Albert Bourla said on a call to discuss quarterly results, adding that he believed revenue from those products will stabilise.
Pfizer continues to expect 2023 revenue growth of 6%-8% from non-Covid products, with a majority occurring in the second half.
Bourla pointed to 10% growth this quarter for non-Covid products both new and old, “and that positions us to be able to have a growing portfolio”.
Sales of recently launched respiratory syncytial virus (RSV) vaccine Abrysvo were $375m for the quarter.
“We’re very early in the innings of this launch. We’re doing better than we thought,” said Pfizer’s chief commercial officer Angela Hwang.
Even so, its RSV shot is lagging that of GSK, the only one being carried by CVS, the largest US pharmacy chain.
Pfizer said in an update its experimental messenger-RNA influenza vaccine worked about as well as a licensed flu vaccine in a late-stage study of volunteers ages 18 to 64.
It said the vaccine hit secondary goals for influenza A strains, but not B strains of the virus.
The company also said it expects mid-stage data from experimental obesity pill danuglipron before the end of the year as it looks to compete in the industry’s fastest-growing market.
Pfizer is also hoping for growth from its $43bn deal for cancer-therapy specialist Seagen, which has been cleared in Europe and is being reviewed by US regulators.
Paxlovid sales slumped 97% in the third quarter to $202m, while vaccine revenue of $1.31bn was down from $4.4bn a year earlier.
Analysts had expected $1.44bn for the vaccine and $618.20m from Paxlovid, according to LSEG data.
Pfizer, which announced a $3.5bn cost-cutting programme earlier this month, slashed $9bn off its 2023 sales forecast after agreeing to take back nearly 8-million Paxlovid treatment courses from the US government.
Pfizer expects Paxlovid to remain available for free to Americans through to the end of the year.
The company posted a net loss of 42c per share for the third quarter. Excluding one-off items, Pfizer reported a loss of 17c per share compared with analysts’ expectations of a 34c loss, and a profit of $1.78 per share a year ago.
Revenue was $13.23bn, down from $22.64bn a year ago.
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