Pfizer Reports Quarterly Loss Due to Struggles with Covid Antiviral Treatment and Vaccine
Pfizer, one of the leading pharmaceutical companies, announced a quarterly loss for the third quarter as it faced challenges with its Covid antiviral treatment, Paxlovid, and the Covid vaccine. The company recorded charges related to these struggles, leading to a narrower than expected adjusted loss.
The drugmaker reported a charge of $5.6 billion for inventory write-offs in the third quarter, primarily attributed to lower-than-expected use of Covid products. Paxlovid accounted for $4.7 billion of the write-offs, while the company’s Covid vaccine contributed $900 million. These charges highlight the weakening demand for Pfizer’s Covid products, which prompted the company to launch a $3.5 billion cost-cutting plan earlier this month.
Pfizer’s quarterly revenue for the third quarter stood at $13.23 billion, a significant decline of 42% compared to the same period last year. The decline can be attributed to the decrease in sales of its Covid products. The Covid vaccine generated $1.31 billion in sales, down 70% from the previous year, while Paxlovid posted a revenue drop of 97%, with $202 million in sales.
Overall, the combined revenue from these products amounted to approximately $1.5 billion for the quarter, a substantial decrease compared to the roughly $12 billion in sales during the same period a year ago.
Pfizer also reported a net loss of $2.38 billion, or 42 cents per share, for the third quarter, compared to a net income of $8.61 billion, or $1.51 per share, during the same period in the previous year. Excluding certain items, the company’s earnings per share were 17 cents for the quarter.
Despite the challenging performance of its Covid products, Pfizer reiterated its full-year adjusted earnings and revenue guidance announced earlier, which is significantly lower than initial projections due to the weakening demand. The company expects 2023 sales of $58 billion to $61 billion and full-year adjusted earnings of $1.45 to $1.65 per share.
Pfizer’s struggles with its Covid products are reflective of the wider challenges faced by pharmaceutical companies like Moderna in navigating the transition of their Covid businesses to the commercial market. To mitigate these challenges and shore up investor sentiment, Pfizer unveiled its cost-cutting plan and emphasized its growth opportunities, including mergers and acquisitions and a robust pipeline.
The company’s recent product launches, such as a vaccine for respiratory syncytial virus and an ulcerative colitis pill, demonstrate its commitment to diversifying beyond Covid. Pfizer’s investors are also awaiting updates on its mid-stage trial for the oral obesity pill danuglipron, which could potentially position the company as a strong competitor in the weight loss drug market.
In addition, investors are keen on updates regarding Pfizer’s $43 billion acquisition of cancer therapy maker Seagen, a deal that could contribute over $10 billion in risk-adjusted sales by 2030. The proposed buyout received approval from the European Commission earlier this month.
Pfizer’s shares have experienced a decline of approximately 40% this year, resulting in a market value of approximately $172.5 billion.
Pfizer will hold an earnings call with investors at 10 a.m. ET to discuss its quarterly performance and address concerns moving forward.