Pfizer Shares Fall After Resetting COVID Expectations for 2024

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By Leroy Leo and Michael Erman

(Reuters) – Pfizer on Wednesday forecast 2024 sales that could be as much as $5 billion below Wall Street expectations, a move top executives said provided a more reliable view of its COVID-19 business than it had this year, driving shares down to a 10-year low.

Revenue from Pfizer’s COVID-19 vaccine and treatment, which peaked at $57 billion in 2022, are now expected to be $8 billion in 2024, a further drop from the $13 billion analysts’ forecast and Pfizer’s own lowered view of $12.5 billion for this year.

“We need to be conservative,” Albert Bourla, Pfizer’s chairman and chief executive, said in a conference call with investors. “We need to be trustworthy so as not to (still) create uncertainty, as has unfortunately been the case this year. “

Pfizer used some of its COVID windfall to acquire companies, including a $43 billion deal for cancer drugmaker Seagen it expects to close this week, and launched a new RSV vaccine. But the recent RSV launch has been disappointing, trailing a rival’s shot, and shares have fallen 44% so far this year.

In addition, COVID vaccination in the U. S. The U. S. population has dropped dramatically, with about 17% of the eligible population receiving the maximum recent boosters, in part due to declining concerns about the virus as well as vaccine fatigue.

The New York-based pharmaceutical maker also expects adjusted 2024 earnings in the range of $2. 05 to $2. 25 per share, below analysts’ expectations of $3. 16.

Pfizer shares lost another 7. 3% on Wednesday, wiping out more than $12 billion in market capitalization if losses continued through the day.

Shares of COVID vaccine rival Moderna were down nearly 5%, while Pfizer’s German vaccine partner BioNTech were off 5.5%.

“Honestly, they’re going through a rough patch,” said Jeff Jonas, portfolio manager at Gabelli Funds, which owned more than 750,000 Pfizer shares in September, according to LSEG data.

Jonas said the company has taken on a lot of debt to do deals like Seagen. But he is skeptical the company has done enough to fully offset lost revenue from drugs expected to face generic competition in coming year.

“They’re stuck in their tactics and they’re not necessarily going to take the ambitious steps they want to revitalize the R. “

Seagen is expected to add $3.1 billion to revenue next year.

‘A FLOOR FOR 2024 SALES’

The downward guidance comes a day after Pfizer said it would modernize its cancer department to accompany the acquisition of Seagen. On Wednesday, it also raised its cost-cutting target to $500 million.

Pfizer now expects an annual profit of between $58. 5 billion and $61. 5 billion, with an average analyst estimate of $63. 17 billion, according to LSEG data.

The COVID-19 vaccine and antiviral remedy Paxlovid helped Pfizer generate more than $100 billion in profits in 2022. Pfizer had originally forecast $21. 5 million in profit from COVID sales for 2023 but later lowered that forecast by more than 40%.

COVID-19 sales targets “likely constitute ground for 2024 sales,” the J. P. Chris Schott. Morgan.

The sharp drop in COVID sales has also forced Pfizer to launch a program to cut jobs and expenses, which is now expected to save at least $4 billion a year through the end of 2024.

Pfizer announced Tuesday that Chief Commercial Officer Angela Hwang will step down and that the company will reorganize its non-cancer business into two divisions, one aimed at the U. S. and one aimed at the rest of the world.

Citi analyst Andrew Baum said Pfizer’s management is acting with increasing urgency to address its weak stock performance. However, the absence of promising high-potential pipeline assets makes it difficult for the company with several Pfizer products expected to go off patent in the next few years.

(This story has been corrected to imply that the RSV vaccine is an mRNA vaccine, in paragraph 4)

(Reporting by Leroy Leo in Bengaluru; editing by Nick Zieminski and Bill Berkrot)

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