Pfizer strategizes beyond COVID-19 products amidst Q3 loss

USA — Pfizer, a pharmaceutical heavyweight, has called on investors to shift their focus toward the growth of non-COVID-19 products, emphasizing the new RSV vaccine Abrysvo.

The move comes as waning demand for COVID-19 vaccines and treatments led the company to post its first quarterly loss since 2019.

In the previous month, Pfizer announced a US$5.6 billion one-time charge to account for the U.S. government’s returns of millions of doses of its antiviral treatment Paxlovid and excess inventory of the COVID vaccine Comirnaty.

The declining use of COVID vaccines and products as the pandemic ebbs has resulted in a 40% drop in Pfizer’s shares in 2023.

This trend may persist as analysts have suggested that it could continue to weigh on the company’s performance.

Evan Seigerman, an analyst at BMO Capital, highlighted the pressure on Pfizer to meet its 2023 sales guidance.

Paxlovid and the Pfizer-BioNTech vaccine significantly boosted revenue over the past two years. However, with vaccination rates dropping and reduced demand for treatments, this trend has been disrupted as population-wide immunity has increased.

Pfizer’s CEO, Albert Bourla, acknowledged the need to recalibrate expectations for COVID products, stating that he believes revenue from these products will stabilize in the future.

The company remains committed to achieving 6%-8% revenue growth from non-COVID products in 2023, with a significant portion expected in the second half of the year.

Bourla highlighted the remarkable 10% growth achieved this quarter in both new and existing non-COVID products, setting the stage for a growing portfolio.

Pfizer reported US$375 million in sales for its recently launched respiratory syncytial virus (RSV) vaccine, Abrysvo, for the quarter.

Pfizer’s Chief Commercial Officer, Angela Hwang, expressed optimism about the RSV vaccine’s early success.

However, Pfizer’s RSV shot faces competition from a GSK rival vaccine, which is exclusively offered by CVS, the largest U.S. pharmacy chain.

Pfizer also provided an update on its experimental messenger-RNA influenza vaccine, which performed comparably to a licensed flu vaccine in a late-stage study involving volunteers aged 18 to 64. The vaccine met secondary goals for influenza A strains but fell short for B strains.

The company anticipates mid-stage data on its experimental obesity pill, danuglipron, before the year concludes, as it seeks to tap into the rapidly expanding obesity treatment market.

Pfizer is also banking on growth stemming from its US$43 billion acquisition of cancer therapy specialist Seagen, which has obtained clearance in Europe and is currently under review by U.S. regulators.

Paxlovid sales plummeted by 97% in the third quarter, amounting to US$202 million, while vaccine revenue declined from US$4.4 billion the previous year to US$1.31 billion.

Pfizer had anticipated US$1.44 billion for vaccine revenue and US$618.20 million from Paxlovid, according to LSEG data. The company had recently introduced a US$3.5 billion cost-cutting program.

Moreover, Pfizer slashed US$9 billion from its 2023 sales forecast after agreeing to take back nearly 8 million Paxlovid treatment courses from the U.S. government. Pfizer expects Paxlovid to remain accessible to Americans for free through the end of the year.

The company reported a net loss of 42 cents per share for the third quarter. Excluding one-time items, Pfizer reported a loss of 17 cents per share, surpassing analysts’ expectations for a loss of 34 cents but a significant contrast to the profit of US$1.78 per share a year earlier.

Overall revenue for the quarter was US$13.23 billion, down from US$22.64 billion in the same period a year ago.

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