Pfizer Announces Layoffs of Nearly 800 and Cuts Five Clinical Pipeline Programs Amid Q3 Loss

After the earnings report was released, Pfizer's stock price fell nearly 3% at one point during the day, but closed slightly up by 0.03% at $30.56. Since the beginning of 2023, Pfizer's stock price has fallen more than 40%.

Earnings reports show that the poor market performance of COVID-19 related products led to a 41% decrease in Pfizer's revenue in the third quarter. Specifically, the sales of the COVID-19 vaccine Comirnaty in the third quarter were $1.31 billion, a 70% drop compared to the same period last year; the sales of the primary coronavirus treatment drug Paxlovid were $202 million, a 97% year-over-year decline. In contrast, the total revenue from these two products in the third quarter of 2022 was as high as $12 billion.

Shortly before this earnings report was released, Pfizer had issued a profit warning. Due to the U.S. government returning approximately 9.7 million courses of Paxlovid marked with "Emergency Use Authorization," Pfizer lowered its revenue forecast for this year to between $58 billion and $61 billion, which is $9 billion less than its previously announced guidance target.

When Pfizer released its earnings report on Tuesday, the company reiterated this guidance while adding more details: In terms of COVID-19 products, revenue from the Comirnaty vaccine is expected to be approximately $11.5 billion, a 70% decrease compared to 2022, and revenue from the Paxlovid oral treatment is projected at around $1 billion, reflecting a 95% drop from 2022. For non-COVID-19 products, the revenue growth guidance remains at 6% to 8%, with adjusted earnings per share (EPS) forecasted between $1.45 and $1.65.

Previously, to address the decline in performance, Pfizer announced a multi-year, company-wide cost adjustment plan, which is expected to achieve savings of at least $3.5 billion. Of this, $1 billion is expected to be realized in 2023, with an additional $2.5 billion in 2024.

On October 30, according to New Jersey's Worker Adjustment and Retraining Notification (WARN), Pfizer will lay off 791 employees in Gladstone, New Jersey, with the plan taking effect in February 2024.

Prior to this, Pfizer had already shown signs of layoffs and plant closures. On October 10, the industry media Endpoints News reported that Pfizer was carrying out layoffs at its research facility in Boulder, Colorado, with permanent departures set to begin on December 4. Recently, according to reports by The Triangle Business Journal and other publications, Pfizer will also close two factories in North Carolina.

On the same day of releasing the third-quarter financial report, Pfizer also announced that it would cut five clinical projects, including two Phase II projects and three Phase I projects, covering fields such as cancer and dermatology. A spokesperson for Pfizer stated that the reduction of this pipeline is not related to cost-cutting measures.

As the COVID-19 bonus fades, Pfizer must now find new growth points.

In fact, Pfizer's non-COVID-19 product revenue in the third quarter increased by 10% year-on-year, indicating that there are no shortage of "potential winners" among its current products.

The fastest-growing product currently is the RSV vaccine Abrysvo, with revenue reaching $375 million. Abrysvo was approved by the FDA in May this year for the prevention of lower respiratory tract diseases caused by respiratory syncytial virus in individuals aged 60 and above. In August, it received approval for a second indication, for use in pregnant women between 32-36 weeks of gestation to protect newborns from RSV infection, preventing lower respiratory tract disease and severe LRTD caused by respiratory syncytial virus in infants from birth to six months. This is the first RSV vaccine approved by the FDA for use in pregnant women.

Additionally, Pfizer's migraine drug Nurtec ODT generated revenue of $233 million, while the sickle cell disease drug Oxbryta brought in $85 million. The innovative rare disease drug Vyndaqel (Vidaquan) recorded nearly 50% revenue growth this quarter. A group of drugs treating Streptococcus pneumoniae also achieved revenue of $1.85 billion.

However, during Pfizer's earnings call, investors were more focused on GLP-1 drugs. Since the beginning of this year, GLP-1 has become a fiercely competitive field for many pharmaceutical companies, with the potential to surpass PD-1/PD-L1. Moreover, compared to COVID-19 products, GLP-1 drugs offer greater long-term potential and sustainability.

Pfizer's main focus in the GLP-1 field is Danuglipron. Pfizer CEO Albert Bourla stated, "The oral GLP-1 candidate drug Danuglipron is currently in Phase 2b trials, with results expected to be released by the end of the year. Pfizer aims to quickly advance to Phase 3 after reviewing the interim results."