Pfizer on Tuesday posted a surprise adjusted fourth-quarter profit as the company's declining Covid business performed better than expected.
The company reversed approximately $3.5 billion in revenue related to the expected return of 6.5 million doses of its Covid drug, Paxlovid, from the US government. That hit is less than the $4.2 billion Pfizer initially expected for the return of nearly 8 million doses of Paxlovid.
Pfizer's Covid vaccine generated $5.36 billion in revenue during the quarter, down 53% from the same period last year. Analysts expected the injection to generate $4.99 billion in sales, according to FactSet estimates.
The results come as Pfizer tries to mitigate the rapid decline of its Covid business, which saw demand fall to new lows and transition to the US commercial market last year. As revenue suffers, the company is trying to improve its results and boost investor confidence through a sweeping $4 billion cost-cutting plan.
Here's what Pfizer reported for the fourth quarter compared to what Wall Street expected, according to a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: Adjusted 10 cents per share vs. expected loss of 22 cents
- Revenue: $14.25 billion vs. $14.42 billion expected
The pharmaceutical giant also reiterated its full-year 2024 guidance, which it first outlined in mid-December.
Pfizer expects revenue to reach between $58.5 billion and $61.5 billion this year, including about $8 billion in revenue from its Covid products and contributions from its recently closed acquisition of cancer drug developer Seagen.
The company expects to post adjusted earnings of $2.05 to $2.25 per share.
Pfizer reported fourth-quarter revenue of $14.25 billion, down 41% from the same period a year earlier, due to declining sales of its Covid products.
For the fourth quarter, Pfizer posted a net loss of $3.37 billion, or 60 cents per share. That compares with net income of $4.99 billion, or 87 cents per share, during the same period a year ago.
Excluding certain items, the company posted earnings per share of 10 cents for the quarter.
Still, Pfizer's Covid business had a dismal 2023.
Revenue from its Covid and Paxlovid vaccine totaled $12.5 billion in 2023. That's down 78% from its peak of $57 billion in 2022.
Pfizer non-Covid medications
Excluding Covid products, Pfizer said fourth-quarter revenue grew 8% operationally.
The company said the growth was driven in part by its new respiratory syncytial virus vaccine, which entered the market during the third quarter for seniors and pregnant women. The vaccine, known as Abrysvo, posted sales of $515 million in the fourth quarter.
The company said revenue also received a boost from strong sales of Vyndaqel drugs, which are used to treat a certain type of cardiomyopathy, a disease of the heart muscle. These drugs recorded $961 million in sales, 41% more than in the fourth quarter of 2022.
Pfizer also said its blood thinner Eliquis, co-marketed by Bristol Myers Squibb, helped drive that growth. The drug posted revenue of $1.61 billion during the quarter, up 9% from the same period a year earlier. Analysts expected Eliquis to bring in $1.52 billion in sales, according to FactSet.
A class of non-Covid-related products fared worse than Pfizer expected. A group of shots to protect against pneumococcal pneumonia generated sales of $1.60 billion in the fourth quarter. That was down 8% from the same quarter a year earlier due to lower demand and what the company called “unfavorable timing of customer orders.” Analysts expected that group of injections to post $1.97 billion in sales, according to FactSet.
Wells Fargo analyst Mohit Bansal said disappointing sales of that group of shots, which Pfizer calls the Prevnar family, could be a cause for concern.
Bansal noted that Merck has offered encouraging comments about the prospects for its own pneumococcal vaccine franchise, so he expects Pfizer to get questions during its fourth-quarter earnings conference call about how it plans to defend that part of its business.
The results cap a tough year for a company that once saw revenue surge after delivering the world's first Covid vaccine.
Pfizer shares fell about 40% in 2023 as demand for its shot and other Covid products plummeted around the world, causing the company to slash its full-year revenue forecast, record multimillion-dollar charges related to inventory write-offs and launched an extensive cost reduction program.
What's more, Pfizer's future in the booming weight-loss drug market began to look bleak last month. The company scrapped a twice-daily version of its experimental weight-loss pill after obese patients taking the drug lost significant weight but had trouble tolerating it in a mid-stage clinical study.
Investors are waiting for the company to release data on a once-daily form of the drug, called danuglipron, during the first half of the year.
Pfizer hopes its $43 billion acquisition of Seagen, which officially closed during the fourth quarter, will restore investor confidence. Last month, the company made clear it was doubling down on its cancer treatments after revealing plans to create a new oncology division that includes Seagen in early 2024.
But Wall Street is still skeptical about whether Pfizer can turn things around: The company's shares are already down more than 4% for the year, putting its market value at about $155 billion.
Pfizer will hold an earnings conference call with investors at 10 a.m. ET on Tuesday.
