Pfizer sets up DTC marketing platform as Q1 sales beat expectations

Following the lead of Eli Lilly, Pfizer will establish a direct-to-consumer service, selling some of its medicines online and avoiding industry middlemen. The company plans to sell products such as its COVID treatment Paxlovid and a migraine nasal spray in this way, it told the Financial Times.

Pfizer expects to have the website up before the end of this year. It will connect patients with consultants to prescribe the drugs, with a supplier filling and shipping the prescriptions, sources told FT.

In the case of Lilly—which launched LillyDirect in January to offer home delivery of diabetes, obesity and migraine medications—the company uses Amazon Pharmacy and Truepill as its third-party distributors.

The moves are part of a broader effort in the industry to simplify the distribution of products—especially those in high demand such as obesity treatments—and to cut costs associated with going through middlemen.

During its first-quarter earnings report, which Pfizer provided on Wednesday, it did not address its new direct-to-consumer service.

Pfizer reported revenue of $14.9 billion for the first quarter. It was a 20% drop in sales, which made it the fifth straight quarter that the company saw a year-over-year decrease. On the plus side, however, it was the third straight quarter that Pfizer saw a sequential increase in revenue—from $12.7 billion in the second quarter of 2023 to $13.2 billion in the third quarter and $14.2 billion in the fourth quarter.

The first-quarter figure also surprised analysts (Zacks, FactSet) who estimated revenue to come in at $13.9 billion and helped propel a stock surge as the price of shares increased 4% by late morning, a positive reversal considering shares had fallen 10% this year and 34% over the previous 12 months.

Sales of Pfizer’s COVID products Comirnaty (vaccine) and Paxlovid (antiviral) decreased from $7.1 billion in the first quarter of 2023 to $2.4 billion. But excluding revenue from the COVID treatments, sales were up 11%.

While Pfizer increased its profit outlook, it reaffirmed its guidance for annual revenue to finish between $58.5 billion and $61.5 billion. The company also reaffirmed its 2023 estimates for Comirnaty and Paxlovid sales at $5 billion and $3 billion respectively. Last year the products accounted for $11.2 billion and $1.3 billion respectively.

Helping compensate for the loss of COVID product revenue were sales of Eliquis, which were up 9% to $2 billion, but there are headwinds coming for the blood thinner, Lee Brown, an analyst with Third Bridge, warned.

“Eliquis represents nearly 14% of Pfizer’s Q1 revenue, and we recognize the uncertainty tied to the Inflation Reduction Act’s Medicare Part D price negotiations,” Brown wrote. “The maximum fair price will be published September 1 and could materially impact Eliquis’ outlook. We also note that Eliquis faces generic competition in several international markets, as well as the loss of exclusivity in the U.S in April 2028.”

When asked about the impacts of the IRA, during a conference call on Wednesday, Pfizer executives offered little insight on their expectations.

Another thriving treatment with the loss of exclusivity looming is the Vyndaqel family of heart failure medicines which were up 66% to $1.1 billion, stoked by “strong market uptake in the transthyretin amyloid cardiomyopathy” indication, Brown said.

The Prevnar family of vaccines to prevent pneumococcal disease was up 6% to $1.7 billion. Another big gainer was prostate cancer drug Xtandi with sales of $418 million, which were up 23%.

Sales of new RSV vaccine Abrysvo fell from $515 million in the fourth quarter of last year to $145 million, which U.S. chief commercial officer Aamir Malik attributed to “a seasonal trend,” which were also seen Wednesday as GSK reported falling sales of its RSV shot Arexvy.

"In Q1 what we saw from the market, it certainly attenuated over the course of the quarter. There was a peak in the second week of January and then a steady week-by-week decline since then," Malik said. "Our performance was in line with what we expected."

In the first quarter, sales of products obtained in the company’s $43 billion buyout last year of Seagen came to $742 million. For the year, Pfizer anticipates the antibody-drug conjugate cancer treatments from Seagen will generate $3.1 billion in sales. By 2030, the company expects annual sales from Seagen products to reach $10 billion.