Pfizer Faces Revenue Setback as COVID Windfall Fades

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Pfizer Faces Revenue Setback as COVID Windfall Fades

Pfizer Faces Revenue Setback as COVID Windfall Fades

“COVID Windfall” Nearly Vanishes as Pfizer Resets Revenue Guidance, Triggering Stock Plunge.

On December 13, Pfizer announced that its 2024 revenue is likely to be around $5 billion lower than Wall Street’s expectations, causing its stock to plummet by over 8%, reaching a new low since 2014.

The record-breaking sales Pfizer experienced during the COVID-19 pandemic are now dwindling, and the stock is reverting to pre-pandemic levels.

Pfizer Faces Revenue Setback as COVID Windfall Fades

Last year, Pfizer’s COVID-19 vaccine and antiviral drug Paxlovid generated a combined sales revenue of nearly $57 billion, equivalent to almost 60% of the company’s total income in 2022, surpassing $100 billion for the year.

However, Pfizer’s latest projection for 2024 revenue is between $58.5 billion and $61.5 billion, significantly below the market’s expected $62.94 billion. Notably, revenue from COVID-19 drugs is anticipated to decrease to $8 billion next year, much lower than the market expectation of $13 billion.

Pfizer’s CEO, Albert Bourla, stated in a conference call, “We want to be conservative, we want to be reliable, so we don’t create uncertainty again, unfortunately, this year is not an easy one.”

Benefiting from unexpected gains during the COVID-19 pandemic, Pfizer acquired several companies, including the $43 billion acquisition of cancer drug manufacturer Seagen, expected to be completed this week. Pfizer also introduced a new mRNA-based RSV vaccine, but its market performance has been disappointing, lagging behind competitors, leading to a 47% decline in its stock price so far this year.

Last week, Pfizer announced plans to abandon the development of its experimental weight loss drug, danuglipron (taken orally twice daily), another significant blow for the company. Pfizer had hoped to enter the booming weight loss drug market and turn its fortunes around.

In addition, the vaccination rate for COVID-19 in the United States has sharply declined, with only about 17% of eligible individuals receiving the latest booster shot, partly due to decreased concerns about the virus and pandemic fatigue.

The pharmaceutical company also predicts that the adjusted earnings per share for 2024 will be between $2.05 and $2.25, significantly lower than the market’s expectation of $3.16.

Simultaneously, Pfizer’s COVID-19 vaccine competitor, Moderna, saw its stock drop nearly 5% on Wednesday, and Pfizer’s German vaccine partner, BioNTech, experienced a 5.5% decline.

Jeff Jonas, portfolio manager at Gabelli Funds, expressed concern about Pfizer’s situation, stating that the company has taken on a substantial amount of debt to complete transactions like the Seagen acquisition. He also questioned whether Pfizer has done enough to fully offset the anticipated revenue loss from generic drug competition next year.

Jonas commented on Pfizer’s research and development, saying, “They stick to the script, so they may not necessarily take the necessary bold steps to rejuvenate R&D.”

The sharp decline in sales of COVID products has prompted Pfizer to initiate a plan to cut jobs and reduce expenses, with expectations of saving at least $4 billion annually by the end of 2024.

Citigroup analyst Andrew Baum noted that Pfizer’s management is increasingly taking urgent action to address its weak stock performance. However, due to a lack of promising high-potential pipeline assets, several of Pfizer’s products are expected to lose patent protection in the coming years, making the company’s path forward challenging.