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On Tuesday, Pfizer reported second-quarter revenue and adjusted profit that beat expectations and raised its full-year outlook, benefiting from its extensive cost-cutting program, better-than-expected sales of its antiviral Covid pill Paxlovid and strong sales of non-Covid products.
The company now expects adjusted earnings of $2.45 to $2.65 per share for the fiscal year, above the previous forecast of $2.15 to $2.35 per share.
Pfizer also raised its revenue forecast to $59.5 billion to $62.5 billion, up from a previous revenue forecast of $58.5 billion to $61.5 billion. This includes about $5 billion in expected revenue from the Covid vaccine and $3.5 billion from Paxlovid.
The pharmaceutical giant said its higher forecast reflected its strong first-half performance and confidence in the “underlying strength” of its business. Notably, Pfizer on Tuesday reported its first quarter of revenue growth since the fourth quarter of 2022, when its Covid sales peaked.
“This quarter's results are a testament to the performance of our commercial business and our prudent approach to improving our cost base,” Pfizer Chief Financial Officer Dave Denton said during a conference call on Tuesday.
Nevertheless, the company's share price fell by more than 1% after the results were released.
Here's what the company reported for the second quarter, compared to Wall Street expectations, based on an analyst survey conducted by LSEG:
- Earnings per share: 60 cents adjusted compared to 46 cents expected.
- Revenue: $13.28 billion compared to the expected $12.96 billion.
The results come as Pfizer struggles to stabilize its business and regain Wall Street's favor after demand for its Covid products plummeted. Demand for its vaccine and Paxlovid collapsed last year and spilled over into the commercial market in the U.S. as the world emerged from the pandemic.
As revenues plummeted, Pfizer launched a major cost-cutting drive in October that is expected to deliver savings of at least $4 billion by the end of 2024. The company has since announced a separate multi-year cost-cutting plan, the first phase of which is expected to deliver savings of $1.5 billion by 2027.
“We expect all these [cost-cutting] Investments … are all aimed at improving operating margins so that we can return to pre-pandemic levels in the near future,” Denton told investors.
Pfizer is also focusing on cancer treatment following its $43 billion acquisition of Seagen last year.
The company reported net income of $41 million, or 1 cent per share, in the second quarter. During the same period a year ago, net income was $2.33 billion, or 41 cents per share. Excluding certain items, the company reported earnings per share of 60 cents for the quarter.
Pfizer reported second-quarter sales of $13.28 billion, up 2% from the same period last year.
The company cited gains from acquired drugs, recently launched treatments and other key products that helped offset the decline in sales in its Covid business.
Paxlovid generated revenue of $251 million in the quarter, up 76% from the same period last year. This growth was primarily due to increased infection rates and demand in certain international markets during the quarter, as well as favorable comparisons to the same period last year, when Paxlovid had no U.S. sales prior to its commercial launch.
According to StreetAccount estimates, the segment's results exceeded analysts' expectations of $206.1 million in revenue.
The company's Covid vaccine generated sales of $195 million, down 87% from the same period last year.
This decrease is due to lower contract deliveries and lower demand in international markets and reflects the seasonality of vaccine demand.
According to StreetAccount, analysts expected sales of $195 million for the drug.
Product growth without Covid
Excluding Covid products, Pfizer said operating sales rose 14% in the second quarter.
The company said growth was partly driven by Seagen's approved cancer products, which brought in $845 million in sales in the quarter. That includes $394 million from a targeted bladder cancer treatment called Padcev and $279 million from Adectris, another drug that targets certain lymphomas.
Pfizer completed its acquisition of Seagen in December.
“We are pleased with the continued success of our integration,” Pfizer CEO Albert Bourla said on the conference call, adding that the acquired products “contribute significantly to our revenue.”
Revenue was also boosted by strong sales of Pfizer's Vyndaqel drugs, used to treat a certain type of cardiomyopathy, a disease of the heart muscle. Those drugs generated sales of $1.32 billion, up 69% from the second quarter of 2023.
According to StreetAccount estimates, analysts had expected this group of drugs to generate sales of $1.10 billion in the quarter.
More health reports from CNBC
Pfizer said its blood thinner Eliquis, which is co-marketed with Bristol Myers Squibb, also contributed to sales growth during the period. The drug posted sales of $1.88 billion in the quarter, up 7% from the same period last year.
According to StreetAccount, this is in line with analysts’ expectations.
But Eliquis sales could face a setback in 2026 when a new price for the drug for certain Medicare patients takes effect after negotiations with the federal government. Those price negotiations, a key provision of President Joe Biden's inflation-fighting bill, will end in early August.
Meanwhile, Pfizer's vaccine against respiratory syncytial virus (RSV) generated sales of $56 million. The vaccine, known as Abrysvo, came onto the market in the third quarter of 2023 and is aimed at seniors and expectant mothers who can pass the protection on to their fetuses.
According to StreetAccount, revenue fell short of analysts' estimates of $89 million in second-quarter revenue.
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