Pfizer had a disappointing second quarter, reporting lower-than-predicted revenue due to the pandemic’s impact on sales. Even more disappointingly, the company has had to cut its 2023 revenue range by $1 billion.
The pharma giant has been able to exceed expectations by beating analyst estimates of 57 cents a share with an impressive 67 cents a share in earnings! This great news shows that the company is excelling financially and is sure to keep investors happy.
The pandemic caused a sharp decline in revenues beyond what was expected. Revenues for the quarter plummeted 54% compared to the same period the year prior, depriving the company of a staggering $14.7 billion in operations, surpassing prior estimates of $13.4 billion.
Pfizer’s Q2 sales for its COVID vaccine Comirnaty and its COVID pill Paxlovid plummeted, with the vaccine’s revenue dropping a staggering 83%, and the pill’s falling a whopping 98%, compared to last year. Though their combined sales plummeted from an impressive $17 billion in Q2 2022 to a mere $1.63 billion, the pharma giant remains confident that their COVID-related revenue forecast for the year will remain untouched at a hefty $21.5 billion.
As the vaccine rolls out, sales of COVID related products are predicted to increase; however, our company is taking a proactive approach and preparing a cost-cutting program in case revenue projections are not met. This cost-cutting strategy is expected to bring long-term financial stability by 2024.
Pfizer revised their full-year sales forecast downwards, reducing the top end from an initial prediction of $71 billion to $70 billion. This marks an shift in the company’s expectations for the upcoming year, and could bring a new wave of fiscal uncertainty.
Pfizer’s revenues have increased by 5% to $11.1 billion when excluding Comirnaty and Paxlovid – a major win thanks to recent M&A activity, such as the $11.6 billion purchase of Biohaven. This monumental acquisition has yielded an added bonus in the form of Nurtec, a treatment for the acute and episodic prevention of migraine in adults, contributing $247 million in sales.
Pfizer made a game-changing move last August, snapping up Global Blood Therapeutics and their revolutionary SCD therapeutic, Oxbryta, for a staggering $5.4 billion. This impressive acquisition brought in an impressive $77 million in the quarter, further cementing the importance of this lifesaving therapeutic in the fight against sickle cell disease.
In the second quarter, Pfizer made some major decisions in their pipeline. They decided to cut a pneumococcal vaccine and an RSV candidate, and made a massive deal to unload a portfolio of preclinical gene therapies and technologies to AstraZeneca’s subsidiary, with a potential total of up to $1 billion in revenue plus tiered royalties. This is a big step in shaping their pipeline for the future.
In order to curb the staggering revenue losses caused by the economic downturn following the pandemic as well as seven of its products with expiring patents, the company has been actively negotiating deals. By 2030, when the patents expire, a whopping $17 billion in annual revenue will be eradicated.
The pharma giant Pfizer forecasts a huge jump in its revenue by 2030, with $20 billion projected from its new drug launches and new indications, as well as an additional $25 billion from recently completed business development deals. Notably, the largest deal – the $43 billion buy of Seagen – awaits a decision from the FTC before it can become a part of the company’s cancer portfolio.
The Federal Trade Commission (FTC) is intensifying its scrutiny on big pharma deals, citing worries that the profound consolidation of the industry has detrimental effects on consumers such as higher drug prices and longer delays on generic drug availability. In response, Amgen faced the FTC’s legal challenge in May over its $28 billion proposed merger with Horizon Therapeutics and retaliated with a lawsuit of its own.
Pfizer has touted an anticipated closure of its multi-billion-dollar acquisition of Seagen before the close of 2021 or the beginning of 2024. However, as Seagen stock is currently trading at around $192, some investors are beginning to doubt that the originally agreed buy price of $229 per share will be reached. Should the deal go through, Pfizer can expect an incredible boost of $10 billion in sales by 2030.