The PAXLOVID antiviral drug Nirmatrelvir, packaged with ritonavir, was developed by Pfizer to treat the virus.
Patrick T. Fallon | Afp | Getty Images
Pfizer reported third-quarter revenue and adjusted profit on Tuesday that beat expectations as the company's Covid vaccine and antiviral pill Paxlovid helped boost sales.
The pharmaceutical giant also raised its full-year outlook and now expects adjusted earnings per share of $2.75 to $2.95 per share, up from its previous forecast of $2.45 to $2.65 per share.
Pfizer now expects sales in the range of $61 billion to $64 billion, up from a previous sales forecast of $59.5 billion to $62.5 billion. This includes about $5 billion in expected revenue from the Covid vaccine and $5.5 billion from Paxlovid.
The results are a much-needed victory for Pfizer CEO Albert Bourla, who is facing new pressure from activist investor Starboard Value. The company has a stake of around $1 billion in the pharmaceutical company.
Still, Pfizer shares fell more than 2% on Tuesday.
Here's what the company reported for the third quarter compared to Wall Street's expectations, based on an analyst survey from LSEG:
- Earnings per share: $1.06 adjusted versus 62 cents expected
- Revenue: $17.7 billion versus expected $14.95 billion
The company reported third-quarter net income of $4.47 billion, or 78 cents per share. By comparison, net loss in the same period last year was $2.38 billion, or 42 cents per share. Excluding certain items, including restructuring costs and costs related to intangible assets, the company reported earnings per share of $1.06 for the quarter.
Pfizer reported third-quarter revenue of $17.7 billion, up 31% from the same period last year.
It's a key quarterly report for Pfizer, which is cutting costs as it works to recover from the rapid decline in its Covid business and share price over the past two years. The drugmaker's shares are trading at about half of their pandemic-era peak, giving the company a market capitalization of about $163 billion.
Activist pressure
Jeff Smith, managing member of Starboard, claims that Pfizer failed to capitalize on the windfall from its Covid products, wiping out tens of billions of dollars in market value as a result. Smith points to what he believes are management's low investments in research and development and major acquisitions that have not yet been worthwhile for the struggling company.
Notably, during the quarter, Pfizer withdrew from the global market a key sickle cell drug that it had acquired as part of a $5.4 billion deal for Global Blood Therapeutics. Starboard is calling for a major overhaul at Pfizer, saying the company needs to be more disciplined in its investments.
Bourla said Tuesday that he and other executives met with Starboard two weeks ago and called it “constructive and cordial.”
Pfizer agrees with some of the points Starboard raised, but has “completely different views on many others,” Bourla said. For example, Starboard questioned Pfizer's use of capital for business development. But Pfizer believes its businesses will deliver significant returns to shareholders, Bourla said.
Bourla pointed to the changes Pfizer has implemented over the past 10 months, such as appointing new executives and separating its U.S. and international operations.
Still, he said, “we will engage productively with our shareholders, including Starboard,” and “consider all good ideas that are offered.”
Meanwhile, Pfizer reiterated on Tuesday that it is on track to achieve at least $4 billion in savings by the end of the year. The company announced a multi-year cost-cutting plan in May, with the first phase of the effort expected to generate $1.5 billion in savings by 2027.
Covid demand
Pfizer's third-quarter success was driven in part by higher demand for its Covid products.
Paxlovid, its antiviral drug, posted sales of $2.7 billion in the quarter, up from $202 million in the year-ago period.
This growth is mainly due to strong demand, especially in the US during the recent virus wave. This was also supported by a one-time contracted delivery of 1 million paxlovid treatment cycles to the federal government's national stockpile in the third quarter, representing revenue of $442 million.
Those results are above the $707.7 million in sales that analysts were expecting for Paxlovid, according to StreetAccount estimates.
“Demand for Paxlovid appears to have stabilized at current levels and appears to correlate closely with each wave of Covid-19,” Bourla said.
The company's Covid vaccine generated revenue of $1.42 billion, up 9% from the same period last year.
Pfizer said the growth was largely due to the timing of stockpiling the vaccine, citing earlier approval of the updated version of the vaccine this fall compared to last year. This growth was partially offset by lower contractual shipments and lower demand in international markets.
Analysts expected revenue of $1.04 billion for the listing, according to StreetAccount.
Non-Covid product growth
Excluding Covid products, Pfizer said third-quarter sales rose 14% on an operating basis, driven by approved cancer products from Seagen, which the company acquired last year for a whopping $43 billion.
Those drugs brought in $854 million in sales in the quarter, including $409 million from a targeted bladder cancer treatment called Padcev and $268 million from Adectris, a drug that targets certain lymphomas. Pfizer completed its acquisition of Seagen in December.
Sales were also boosted by sales of Pfizer's Vyndaqel drugs, which are used to treat a certain type of cardiomyopathy, a disease of the heart muscle. These drugs generated sales of $1.45 billion, up 62% from the third quarter of 2023.
Analysts had expected this group of drugs to earn $1.37 billion in the quarter, according to StreetAccount estimates.
Pfizer said its blood thinner Eliquis, co-marketed by Bristol Myers Squibb, also contributed to sales growth in the period. The drug had sales of $1.62 billion in the quarter, up 8% from the same period last year.
That's slightly more than the $1.59 billion analysts were expecting, according to StreetAccount.
More CNBC Health coverage
However, sales of Eliquis could take a hit in 2026 when a new price for the drug goes into effect for certain Medicare patients after negotiations with the federal government. These price negotiations are a key provision of President Joe Biden's Inflation Reduction Act, which is fiercely opposed by the pharmaceutical industry.
Meanwhile, Pfizer's respiratory syncytial virus (RSV) vaccine posted third-quarter sales of $356 million. The vaccine, known as Abrysvo, hit the market in the third quarter of 2023 for seniors and expectant mothers who can pass protection to their fetuses.
Analysts had expected revenue of $255.4 million, according to StreetAccount estimates.
Last week, Pfizer's RSV shot received approval for adults ages 18 to 59 who are at increased risk of the disease – a decision that is likely to significantly expand the shot's reach in the United States
Comments are closed.