Pfizer Earnings Beat Expectations Despite Plummeting COVID-19 Vaccine Sales

Despite a drop in revenues caused by weaker demand for the company’s COVID-19 vaccine, Pfizer today announced revenue and adjusted profits that beat Wall Street’s estimates, and the company stock price rose slightly in Tuesday’s early trading session before losing ground during the American session.

Last year’s full-year revenues of $100.3 billion were an all-time high for Pfizer, reflecting 30% growth in operations. However, the company is coming back down to earth so far this year, as indicated by its first-quarter numbers.

In comparison to the same period a year ago, sales of the company’s COVID-19 vaccine have dropped by 75%, and as the world leaves the pandemic in its rear-vision mirror, the company in its forward guidance suggested that these numbers will continue to fall.

More On the Numbers and Forward Guidance

Revenues in the first quarter totaled $18.3 billion, down $7.4 billion, or 29%, from the first quarter of the previous year, which was driven primarily by a decline in Comirnaty revenues around the world, and it reflected an operational decline of $6.6 billion, or 26%.

Adjusted earnings per share came in at $1.23, surpassing the 98 cents that market experts had predicted.

The unfavorable impact of foreign exchange was $730 million, or 3%, and company sales increased by $563 million, or 5%, excluding the negative effects of Comirnaty and Paxlovid. Strong sales of medications like the blood thinner Eliquis and the antibiotic Sulperazon, which is used to treat urinary tract infections, contributed to this surge.

Pfizer says it maintains its 2023 operating revenue growth projection of 7% to 9%, excluding COVID-19 products, and in its statement provided revenue forecasts for some of the previously popular products. They expect revenues of around $13.5 billion for Comirnaty, down 64% from 2022 figures, and approximately $8 billion in revenue is forecast from Paxlovid, a decrease of 58% from 2022 results.

Lower COVID-19 product revenues, increased spending to support anticipated near-term launches, and increased investment in certain late-stage pipeline projects are the primary drivers of a 49% operational decrease reflected in the midpoint of the guidance range for Adjusted diluted EPS compared to 2022.

New Product Lines to Generate Billions

In January, Pfizer suggested that during the next 18 months, they plan to introduce up to 19 new vaccines and treatments, which the company estimates sales to reach around $20 billion by the year 2030.

This would represent an unprecedented number of new product and indication releases planned by the company, most of which are projected to occur in the second half of 2023. CEO Albert Bourla, during his executive commentary included in the earnings report, suggested that this was an exciting period for the company.

According to Bourla, significant progress has been made so far this year towards the expected releases, with the approvals of Zavzpret, Cibinqo for adolescents, and Prevnar 20 in paediatric patients, as well as the acceptance of regulatory filings for a Braftovi + Mektovi sNDA, a sNDA for the Talzenna and Xtandi combination, elranatamab BLA, and the RSV maternal vaccine candidate.

Ongoing Contract Controversy in the EU

Pfizer, along with other pharmaceutical companies including Moderna and Johnson & Johnson, had been anticipating a significant decline in Covid-related revenues this year. Nevertheless, contracts to maintain delivery of the vaccines to some of Pfizer’s largest customers remain in place, despite the amount secured being far in excess of requirements in some cases.

Warsaw in particular has led attempts to reopen the EU’s biggest contract, for 1.1 billion doses of the Pfizer/BioNTech vaccine. The agreement was struck during the height of the pandemic and commits the EU to purchasing close to half a billion doses this year.

According to the European Centre for Disease Prevention and Control, vaccination rates have dropped precipitously throughout Europe since the threat of the coronavirus danger has subsided. Only 1.9% of adults in the EU/EEA have presently received three booster doses.

Adam Niedzielski, Poland’s minister of health, urged the European Commision in mid-March to provide an explanation for why it entered into the massive contract, leaving the region responsible for millions of doses that will never be used, and billions of dollars down the drain.

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