Pfizer (PFE) Q1 2023 earnings report

Pharmaceutical company Pfizer Inc. said an oral drug to treat COVID-19 could be available by the end of 2021.

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Pfizer on Tuesday reported first-quarter sales and adjusted earnings that beat Wall Street expectations, despite a drop in sales due to lower demand for the company’s Covid vaccine.

The pharma giant’s stock closed slightly lower at $39.06 on Tuesday. As of Tuesday’s close, shares are down more than 23% year-to-date, taking the company’s market value to around $220.47 billion.

Here’s what Pfizer reported versus Wall Street expectations, based on an analyst poll by Refinitiv:

  • Earnings per share: Adjusted $1.23 versus 98 cents expected
  • Revenue: $18.28 billion versus $16.59 billion expected

Pfizer’s net income of $5.54 billion, or 97 cents a share, fell from $7.86 billion, or $1.37 a share, in the year-ago quarter.

The company reported revenue of $18.28 billion in the first quarter, down 29% from the same period last year.

Covid-related sales contributed $7.1 billion to that number. Pfizer made $3 billion in revenue from the Covid vaccine and $4 billion from sales of its Covid antiviral pill, Paxlovid.

Looking ahead, the New York-based company stood by its 2023 revenue guidance of $67 billion to $71 billion. Pfizer also reiterated its full-year adjusted earnings guidance of $3.25 to $3.45 per share.

However, Pfizer still expects Covid-related sales to decline this year. The company reiterated its guidance of $13.5 billion in sales of Covid vaccines in 2023 and $8 billion in sales for Paxlovid.

Pfizer CEO Albert Bourla said during the earnings announcement that the company expects 2023 to be a “transition year” for Covid sales as the US transitions to the commercial market for Covid products.

Covid vaccine, Paxlovid sales

Quarterly sales of the company’s Covid vaccine fell $10 billion, or 75%, compared to the same period last year, mostly due to lower contracted supplies and weaker demand in international markets, Pfizer said.

US government contracted shipments slowed as the country prepared to bring Covid products to the commercial market later this year, the company said.

Paxlovid sales increased $2.8 billion year-over-year on new launches in certain international markets and strong demand in China due to rising Covid cases. Sales were also boosted by final deliveries related to a US contract secured in late December.

Paxlovid first entered the U.S. market in late December 2021 as part of an Emergency Use Authorization. Pfizer hopes to get full Food and Drug Administration (FDA) approval for the drug this year, but still expects sales in 2023 to be down 58% year over year.

Bourla said Pfizer expects higher adoption of Paxlovid after this year.

“We then expect that the courses sold and used will converge more closely in 2024 and beyond,” he said.

The company also expects U.S. uptake of its Covid vaccine to decline this year and into 2024, Bourla said.

However, the CEO pointed out that Pfizer expects vaccination rates to pick up again from 2025 and “sustain in 2026 and beyond” provided the company successfully rolls out multiple combination vaccine treatments for Covid.

Bourla said the company expects a similar trend outside the US, with some variance in certain countries.

Other medicines

Excluding sales of Covid products, sales in the first quarter rose 5% compared to the year-ago period, according to Pfizer.

That growth was fueled by products from recently acquired companies, including Biohaven Pharmaceutical’s migraine drug Nurtec ODT and Global Blood Therapeutics’ sickle cell anemia drug Oxbryta, which contributed $167 million and $71 million, respectively.

The company said the surge was also due to strong sales of drugs like sulperazon, an antibiotic used to treat urinary tract infections, and blood thinner Eliquis.

Pfizer also said it expects sales to grow 7% to 9% this year, excluding sales of Covid products.

Bourla said that’s because the majority of the company’s near-term product launches are expected to occur in the second half of this year. The company expects to launch 19 vaccines and treatments over the next 18 months, he said.

“As such, we expect our non-Covid sales to grow faster in the second half than the first,” Bourla said during the call.

Pfizer and other drugmakers like Modern And Johnson&Johnson have braced themselves for a sharp drop in Covid-related sales this year as the world emerges from the pandemic and is less reliant on blockbuster vaccines and treatments for the virus.

But Pfizer is pinning its hopes on mergers and acquisitions and a record-breaking pipeline to help the company navigate its post-pandemic boom.

That pipeline includes Pfizer’s RSV vaccine for use in older adults, which could receive FDA approval later this month. These include the company’s new pediatric pneumococcal vaccine and a drug to treat ulcerative colitis from recently acquired Arena Pharmaceuticals.

Pfizer also announced last year that the company plans to achieve $25 billion in revenue growth through deals by 2030.

In March, the company took a big step toward that goal with its $43 billion acquisition of Seagen, which Pfizer said could contribute more than $10 billion in risk-adjusted sales from its cancer therapies by 2030.

Correction: Covid antiviral pill Paxlovid posted sales of $4 billion in the quarter. In an earlier version, the sales figures were incorrectly reported.

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