Pfizer’s stock drops as earnings fall sharply amid lower sales for its COVID products

The company posted net income of $2.327 billion, or 41 cents a share, for the quarter, down 77% from $9.906 billion, or $1.73 a share, in the year-earlier period. Adjusted per-share earnings came to 67 cents, ahead of the 57 cent FactSet consensus.

Revenue fell 54% to $12.734 billion from $27.743 billion a year ago, below the $13.363 billion FactSet consensus.

The company chalked up sales of $1.6 billion from COVID vaccine Comirnaty and antiviral Paxlovid, but that was way below the roughly $17 billion the two treatments generated in the year-ago quarter.

Excluding those two, revenue grew 5% from a year ago.

Chief Executive Albert Bourla emphasized that the company is working on a goal of launching 19 new products or indications in an 18-month span, as the world moves on from the pandemic.

The company is also working to close its $43 billion acquisition of cancer drug maker Seagen, for which it raised $31 billion in a debt offering during the second quarter.

That deal is expected to add more than $10 billion in sales by 2030.

“There is reason to be excited about Pfizer’s future as the company has executed 11 launches over the past 18 months,” said Lee Brown, global sector lead for healthcare at research firm Third Bridge, in comments made after interviewing executives in the industry.

“But over the near-term, it’s going to remain challenging for the company.”

Areas that disappointed included the Prevnar family of vaccines, which treat pneumococcal conjugate for 20 strep serotypes. Those typically perform strongly, but were down 3% in the quarter to less than $1.4 billion, “which is especially disappointing given the launch of Prevnar 20 in pediatric patients.  As a result, worldwide Prevnar sales fell short of expectations by nearly 9%.  This is a big miss for one of Pfizer’s most important therapies,” said Brown.

On a better note, heart drug Vyndaqel delivered 42% growth with sales of $782 million, or 9% above consensus. And Xeljanz, which is used to treat a number of inflammatory conditions such as rheumatoid and psoriatic arthritis and ulcerative colitis, posted growth of 11%, beating consensus by 50%, he said.

“Breast cancer drug Ibrance is holding up for the most part, declining 6% y/y and contributing over $1.2 billion of sales, which was largely in line with expectations given increasing competition and ongoing pricing pressure,” said Brown.

Citi analysts meanwhile, said they have struggled to become constructive on Pfizer, given competitive pressures on its market drugs and late-stage pipeline. Analysts have a neutral rating on the stock and prefer buy-rated Eli Lilly & Co.
LLY,
-0.45%,
AbbVie Inc.
ABBV,
-0.90%
and Merck & Co.
MRK,
-0.53%
in the U.S., they wrote in a note.

See also: Merck swings to loss as it books charge on $10.8 billion acquisition of Prometheus Biosciences

Pfizer said it’s now expecting Cormirnaty revenue of about $13.5 billion for 2023, down 64% from a year ago. It expects Paxlovid revenue to fall 58% to about $8 billion.

Guidance for both products is no longer based on signed or committed supply contracts, as the company will move to the traditional commercial market in the U.S. in the second half.

But it said it still expects full-year adjusted EPS of $3.25 to $3.45.

The company’s bonds also came under pressure early Tuesday, as the following chart from data-as-a-service provider BondCliQ Media Services shows. There were only sellers in early trade and spreads on the company’s 10-year bonds were about 5 basis points wider, according to BondCliQ.

By midday, there was still more net selling though some buyers had emerged.

The following chart shows flows over the last 10 days.