Pfizer (NYSE:PFE) reported a loss of over $2 billion in the third quarter, primarily due to an expected decline in revenue from COVID-19 product sales. Sales of Pfizer’s COVID treatment Paxlovid and the Comirnaty vaccine dropped significantly, with declines of 97% and 70%, respectively. This decrease is in line with a shift in strategy by Pfizer and its competitors to sell these products on the commercial market rather than to governments.
Both the company and industry analysts anticipated a decline in revenue from these key products this year, with the expectation that sales would rebound as commercial sales gained momentum. Two weeks prior to this report, Pfizer had already warned that sales of its COVID-19 drugs were weaker than expected, leading to a $9 billion reduction in its annual revenue projections.
The decline in Paxlovid and Comirnaty sales also affected Pfizer’s second-quarter results, but the company had previously expressed optimism about a rebound in the second half of 2023.
During the third quarter, Pfizer reported a non-cash charge of $5.6 billion for inventory write-offs related to COVID-19 products.
Outside of the COVID-19 product category, Pfizer noted a 10% increase in its operational revenue (excluding the impact of foreign exchange rates), partially driven by growth in its Prevnar pneumonia vaccines. Chief Financial Officer David Denton highlighted the performance of the company’s core business and its positive momentum.
Pfizer’s adjusted loss for the quarter was 17 cents per share, significantly narrower than the expected loss of 42 cents per share, according to Wall Street analysts surveyed by FactSet.
Total revenue dropped by 42% to $13.23 billion, falling short of the forecasted $13.77 billion.
Pfizer’s full-year adjusted earnings are projected to be in the range of $1.45 to $1.65 per share. However, industry analysts, on average, anticipate earnings of $2.13 per share, according to FactSet.
Pfizer has initiated a cost-cutting program aimed at delivering at least $3.5 billion in savings by the end of 2024.
Pfizer’s stock price experienced a decline of 30 cents, trading at $30.25 during midday trading on Tuesday, while broader market indexes showed mixed results. This year, Pfizer’s stock price has fallen by about 40%, in contrast to the broader Standard & Poor’s 500 index, which has seen an increase of over 8%.
Notably, in 2021, Pfizer’s share price had reached over $60 and reached an all-time high, driven in large part by the success of the Comirnaty vaccine, which generated more than $36 billion in revenue during that year.
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