Pfizer Resets Revenue Guidance as 'COVID Tailwind' Fades, Triggering Stock Plunge

U.S. Eastern Time Wednesday,PfizerCompany ReleaseAnnouncementClaimed that the revenue in 2024 might be about $5 billion lower than Wall Street's expectations. This caused its stock price to plummet more than 8%, hitting a new low since 2014. The COVID-19 pandemic has...PfizerThe company achieved record-breaking sales, and with the end of the pandemic,PfizerThe stock price has also returned to its original form.

Last year, Pfizer's COVID-19 vaccine and antiviral drug Paxlovid generated nearly $57 billion in combined sales, accounting for almost 60% of the company’s total revenue in 2022, with annual revenue exceeding $100 billion.

Pfizer's latest forecast for 2024 revenue is $58.5 billion to $61.5 billion, far below the market expectation of $62.94 billion. Notably,COVID-19 DrugsRevenue is expected to drop to $8 billion next year, significantly lower than the market expectation of $130 billion.

Pfizer CEO Albert Bourla said on the conference call, "We want to be a little more conservative, a little more reliable so that we don't create uncertainty again. But unfortunately, this year is not easy."

Pfizer has utilized the unexpected windfall gained from the COVID-19 pandemic to acquire several companies, including the $43 billion acquisition of cancer drug manufacturer Seagen, a deal expected to be completed this week. Pfizer has also launched a new RSV vaccine based on mRNA technology; however, the recent market performance of the RSV vaccine has been disappointing, lagging behind competitors, and its stock price has fallen by 47% year-to-date.

Just last week, Pfizer announced that it plans to abandon its experimentalWeight Loss MedicationThe development of danuglipron (taken orally twice daily) is another significant blow for Pfizer, which had hoped to join the currently boomingWeight Loss MedicationTrack, with its ability to achieve a turnaround.

In addition, the vaccination rate for COVID-19 in the United States has sharply declined, with only about 17% of the eligible population receiving the latest updated booster shot. This is partly due to reduced concern about the virus and psychological fatigue.

The pharmaceutical company also forecasted that the adjusted earnings per share for 2024 would be between $2.05 and $2.25, far below the market expectation of $3.16.

Meanwhile, shares of Pfizer's COVID-19 vaccine rival Moderna fell nearly 5% on Wednesday, while shares of Pfizer's German vaccine partner BioNTech dropped 5.5%.

Gabelli Funds portfolio manager Jeff Jonas said frankly that Pfizer is in quite a difficult situation. The company has already taken on substantial debt to complete deals like the acquisition of Seagen. He also questioned whether Pfizer has done enough to fully offset the expected revenue loss from generic drug competition anticipated next year.

Jonas said when talking about R&D: "They are bound by conventions, so they may not necessarily take the bold steps needed to revitalize R&D."

The sharp decline in the sales of COVID-19 products has also forced Pfizer, Inc. to launch a plan for layoffs and cost-cutting, which is currently expected to save at least 4 billion US dollars annually by the end of 2024.

CitibankAnalystAndrew Baum stated that Pfizer's management is increasingly taking urgent actions to address its weak stock performance. However, the lack of promising high-potential pipeline assets, combined with several products facing patent expiration in the coming years, has left the company in a difficult position.

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