Pfizer swings to loss in Q3 as demand for COVID products dries up

31 Oct 2023
firstwordpharma.com
VaccineClinical ResultAcquisitionPhase 3
Headline results for the third quarter:
Revenue: $13.2 billion (forecasts of $13.8 billion), down 42%
Loss: $2.4 billion, versus a profit of $8.6 billion
Note: All changes are versus the prior-year period unless otherwise stated
What the company said:
David Denton, chief financial officer at Pfizer, stated "we are extremely pleased by the strong 10% operational revenue growth of [our] non-COVID products in the third quarter." He added that "with
expected contributions from our new product launches, this puts us squarely on track to meet our full-year non-COVID operational revenue growth target of 6% to 8%."
Last month, in announcing the launch of a cost-cutting programme aimed at generating savings of at least $3.5 billion by the end of 2024, the company noted that it would record billions in COVID inventory write-offs. It also revised terms of its US supply agreement for Paxlovid, under which the government would return close to 8 million courses of the COVID antiviral treatment at the end of 2023 in return for a credit for future courses of the drug.
On Tuesday, Pfizer said it booked a $5.6-billion charge in the third quarter due to lower-than-expected use of COVID products. Of these write-offs, $4.7 billion was chalked up to Paxlovid, with $900 million attributed to the company's COVID booster, close to what Pfizer had estimated a few weeks ago.
Meanwhile, CEO Albert Bourla stated that Pfizer also continues "to make progress" toward its pending $43-billion acquisition of antibody-drug conjugate (ADC) developer Seagen. It is awaiting US antitrust approval for the deal, having recently secured an unconditional nod from regulators in the EU. The companies have said the acquisition is expected to close in late 2023 or early 2024.
Other results:
Primary care sales: $6.3 billion, down 60%
Eliquis alliance revenue and direct sales: $1.5 billion, up 2%
Comirnaty: $1.3 billion, down 70%, roughly $200 million short of analyst expectations
Prevnar/Prevenar 13 & 20: $1.9 billion, up 15%
Abrysvo: $375 million, following FDA approval and subsequent US launch of the respiratory syncytial virus (RSV) vaccine in older adults in May
Nurtec ODT/Vydura: $233 million
Paxlovid: $202 million, down 97%, missing projections by nearly $170 million
Specialty care sales: $3.8 billion, up 10%
Vyndaqel/Vyndamax: $892 million, up 48%
Xeljanz: $503 million, flat versus the year-ago period
Enbrel (outside the US and Canada): $208 million, down 10%
Sulperazon: $122 million, down 32%
Oxbryta: $85 million
Oncology product sales: $2.9 billion, down 6%
Ibrance: $1.2 billion, down 3%
Xtandi alliance revenue: $313 million, down 2%
Inlyta: $252 million, flat versus the year-ago period
Looking ahead:
Pfizer reiterated that it expects sales this year to hover around $58 billion to $61 billion, downgraded from an earlier forecast of between $67 billion to $70 billion issued in August. It also expects adjusted earnings will be between $1.45 and $1.65 a share, which had been slashed from a prior range of $3.25 to $3.45 per share.
The company said Comirnaty sales are now seen reaching approximately $11.5 billion, down 70% from 2022 results, with Paxlovid set to fall 95% to around $1 billion.
"With a significant uncertainty removed by our recently announced amended Paxlovid supply agreement with the US government, our expectation of additional clarification on global vaccination and treatment rates by the end of the year, and the breakthroughs continuing to emerge from our pipeline, we look forward to concluding 2023 with positive momentum that showcases Pfizer's long-term growth potential," Bourla said.
What analysts said:
While the dwindling COVID product sales were "not a huge surprise," BMO Capital Markets analyst Evan Seigerman said "we want to hear more from management on the path to sustainable growth with the Covid reset behind us."
Citi analyst Andrew Baum remarked that "the road ahead remains challenging" for Pfizer, noting that in addition to the COVID franchise downturn, the Seagen purchase has potential for "talent-loss post integration."
Pipeline update:
Pfizer disclosed that its mRNA-based influenza vaccine candidate PF-07252220 achieved both main goals of non-inferiority and superiority, versus a licensed flu shot, for the 18- to 64-year-old cohort of a Phase III trial. It added that secondary immunogenicity endpoints were achieved only for A strains, but not B strains. A Phase III readout for the 65-plus age group is due by year-end.
"Given our recent positive results from our next-generation mRNA flu/COVID combination candidate (dubbed PF-07926307) and pending results for our 65-and-older first-generation Phase III standalone mRNA flu study, timing for our standalone mRNA flu is now expected after 2024," said Bourla. "If successful, our next-generation mRNA flu/COVID combination candidate is expected to market in 2025," he added.
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