Pfizer has made frequent headlines in recent months as it moves forward with a campaign to save $4 billion in annual costs by the end of this year. Now, the company has unveiled another savings drive that will run over a longer period of time.
In a Securities and Exchange Commission filing (PDF) Wednesday, Pfizer revealed a "multi-year program" to cut its cost of goods sold. The first phase of the program is "expected to deliver savings of approximately $1.5 billion by the end of 2027, some of which is expected to begin being realized in 2025," the company said in the filing.
The drugmaker expects to record expenses of around $1.7 billion for the first phase of the program, mostly this year, it said.
The plan is expected to include "operational efficiencies, network structure changes, and product portfolio enhancements," Pfizer said.
This campaign is separate from the multibillion-dollar "enterprise-wide cost realignment program" the company unveiled last year. In October 2023, Pfizer said it would move to cut $3.5 billion in costs by the end of 2024. Just two months later, the drugmaker added $500 million to the tally of planned cuts, for a total of $4 billion.
Pfizer's rollout of its 2023 cost-cutting campaign came amid a drop sharp in demand for its COVID-19 vaccines and antivirals. Last year, Pfizer's Comirnaty and Paxlovid generated a combined $12.5 billion in global sales, a 78% decline from 2022.
Pfizer's downsizing efforts have affected its operations in many places, including in Connecticut, New Jersey, Michigan, California, the U.K., Ireland and beyond.
At the same time, the company recently added the staff of Seagen to its ranks through the $43 billion buyout of the oncology specialist, which closed in December. As part of the integration of the Seattle-based company, Pfizer has decided against moving forward with a Seagen manufacturing project and trimmed some former Seagen staffers in Europe.
With Seagen in hand, Pfizer now plans to market at least eight cancer blockbusters by 2030, executives recently said during an investor event. Under its current oncology strategy, Pfizer will focus its efforts in breast cancer, genitourinary cancers, blood cancers and thoracic cancers.
Pfizer's share price has been on a multiyear slide, declining about 57% since a high in December 2021. Shares increased about 2% on Wednesday after the company revealed the new cost-cutting effort.