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Pfizer (PFE) earnings Q3 2024

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The PAXLOVID antiviral drugs nirmatrelvir co-packaged with ritonavir had been developed by Pfizer to deal with the virus.

Patrick T. Fallon | Afp | Getty Photographs

Pfizer on Tuesday reported third-quarter income and adjusted revenue that blew previous expectations as the corporate’s Covid vaccine and antiviral capsule Paxlovid helped enhance gross sales.

The pharmaceutical large additionally hiked its full-year outlook and now expects to ebook adjusted earnings per share of $2.75 to $2.95, up from its earlier steerage of two.45 to $2.65 per share. 

Pfizer now expects income in a variety of $61 billion to $64 billion, up from a earlier income forecast of between $59.5 billion and $62.5 billion. That features roughly $5 billion in anticipated income from its Covid vaccine and $5.5 billion from Paxlovid.

The outcomes are a much-needed win for Pfizer CEO Albert Bourla, who’s dealing with new strain from activist investor Starboard Worth. The agency has a roughly $1 billion stake within the pharmaceutical firm. 

Nonetheless, shares of Pfizer fell greater than 2% on Tuesday.

This is what the company reported for the third quarter in contrast with what Wall Avenue was anticipating, primarily based on a survey of analysts by LSEG: 

  • Earnings per share: $1.06 adjusted vs. 62 cents anticipated
  • Income: $17.7 billion vs. $14.95 billion anticipated

The corporate booked third-quarter web revenue of $4.47 billion, or 78 cents per share. That compares with a web lack of $2.38 billion, or 42 cents per share, throughout the identical interval a yr in the past. Excluding sure gadgets, together with restructuring costs and prices related to intangible property, the corporate posted earnings per share of $1.06 for the quarter.

Pfizer reported income of $17.7 billion for the third quarter, up 31% from the identical interval a yr in the past.

It’s a crucial quarterly report for Pfizer, which is chopping prices as it really works to get well from the speedy decline of its Covid enterprise and share worth over the past two years. The drugmaker’s shares are buying and selling at about half of their pandemic-era excessive, placing the corporate’s market cap at roughly $163 billion. 

Activist strain

Starboard managing member Jeff Smith contends that Pfizer failed to capitalize on the windfall earned from its Covid products and, in the process, destroyed tens of billions of dollars in market value. Smith points to what he believes are management’s poor investments in research and development and hefty acquisitions that have yet to be fruitful for the struggling company. 

Notably during the quarter, Pfizer withdrew from world markets a critical sickle cell drug it had acquired in a $5.4 billion deal for Global Blood Therapeutics. Starboard is calling for a massive overhaul at Pfizer, saying that the company needs to be more disciplined on its investments.

Bourla said Tuesday 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 “vastly different views on many others,” Bourla said. For example, Starboard challenged Pfizer’s capital deployment for business development. But Pfizer believes its deals will bring significant shareholder returns, Bourla said.

Bourla pointed to changes Pfizer has implemented over the last 10 months, such as appointing new executives and separating its U.S. and international businesses.

Still, he said, “We will engage productively with our shareholders, including Starboard” and consider “all good ideas that are offered.”

Meanwhile, Pfizer reiterated Tuesday it is on track to deliver at least $4 billion in savings by the end of the year. The company in May announced a multiyear plan to slash costs, with the first phase of the effort slated to deliver $1.5 billion in savings by 2027. 

Covid demand

Pfizer’s third-quarter beat was fueled in part by higher demand for its Covid products.

Paxlovid, its antiviral pill, brought in $2.7 billion in sales for the quarter, up from the $202 million it posted in the year-earlier period. 

That growth is mainly due to strong demand, particularly in the U.S. during a recent wave of the virus. It was also helped by a one-time contractual delivery of 1 million treatment courses of Paxlovid to the federal government’s national stockpile during the third quarter, which accounted for $442 million in revenue. 

Those results are higher than the $707.7 million in sales that analysts were expecting for Paxlovid, according to estimates compiled by StreetAccount.

“The demand for Paxlovid seems to have stabilized at the current levels and appears to be closely correlated with each wave of Covid-19,” Bourla said.

The company’s Covid shot booked $1.42 billion in revenue, up 9% from the same period a year ago.

Pfizer said that growth was mainly driven by the timing of stocking for the vaccine, pointing to the earlier approval of the updated version of the shot this fall compared with last year. That growth was partially offset by lower contractual deliveries and demand in international markets.

Analysts expected $1.04 billion in sales for the shot, according to StreetAccount.

Non-Covid product growth

Excluding Covid products, Pfizer said revenue for the third quarter rose 14% on an operational basis, fueled by approved cancer products from Seagen, which it acquired last year for a whopping $43 billion.

Those drugs brought in $854 million in revenue for the quarter, including $409 million from a targeted treatment for bladder cancer called Padcev as well as $268 million from Adectris, a drug that targets certain lymphomas. Pfizer completed its acquisition of Seagen in December.

Revenue also got a boost from sales of Pfizer’s Vyndaqel drugs, which are used to treat a certain type of cardiomyopathy, a disease of the heart muscle. Those drugs booked $1.45 billion in sales, up 62% from the third quarter of 2023.

Analysts had expected that group of drugs to rake in $1.37 billion for the quarter, according to estimates from StreetAccount.  

Pfizer said its blood thinner Eliquis, which is co-marketed by Bristol Myers Squibb, also helped drive revenue growth during the period. The drug posted $1.62 billion in revenue for the quarter, up 8% from the year-earlier period. 

That is slightly higher than the $1.59 billion that analysts were expecting, according to StreetAccount. 

Sales of Eliquis could take a hit in 2026, however, when a new price for the drug goes into effect for certain Medicare patients following negotiations with the federal government. Those price negotiations are a key provision of President Joe Biden’s Inflation Reduction Act that the pharmaceutical industry fiercely opposes.

Meanwhile, Pfizer’s vaccine against respiratory syncytial virus, or RSV, saw $356 million in revenue for the third quarter. The shot, known as Abrysvo, entered the market during the third quarter of 2023 for seniors and expectant mothers who can pass on protection to their fetuses.

Analysts had expected the shot to generate sales of $255.4 million, according to StreetAccount estimates.

Last week, Pfizer’s RSV shot won approval for adults ages 18 to 59 who’re at elevated danger for the illness – a call that may doubtless considerably develop the attain of the jab within the U.S.

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