Pfizer warns of further sales decline for COVID products, plots $500M in additional cost cuts

Using Tuesday to announce good news—that its $43 billion acquisition of Seagen would be finalized on Thursday—Pfizer sandwiched its bad news, which came on Wednesday with its 2024 guidance.

The company expects (PDF) revenue to reach between $58.5 billion and $61.5 billion next year, coming up short of the analyst consensus of $63.2 billion, largely because of the plummeting demand for its COVID-19 products.

With the update, Pfizer’s shares had fallen by 9% by mid-morning. Other COVID product manufacturers saw a slide as well. Shares for Pfizer’s vaccine partner BioNTech dropped by 5%, while the price for Moderna’s stock also fell by 5%.

The new figures for Pfizer continue a trend. This year, the company twice had to slash its revenue forecast for 2023, largely because it didn’t foresee COVID-19 product demand falling so precipitously. In reporting its third-quarter revenue in October, Pfizer slashed its 2023 revenue forecast by a whopping $9 billion.

Pfizer now estimates combined sales of its COVID Comirnaty vaccine and Paxlovid pill to reach $8 billion in 2024. In 2022, the products combined for sales of $57 billion. This year, they are projected to reach $12.5 billion, Pfizer said in October.

Pfizer is deliberately shooting low on its COVID product estimate, even though CEO Albert Bourla said during a conference call on Wednesday that the company expects vaccination and treatment rates next year to match those of this year.

“We want to be conservative and are giving a good floor,” Bourla said. “We want to be reliable so that we will not create again uncertainty, which was the case early this year when our estimates were way higher than in reality.”  

Pfizer also said that Seagen will contribute an estimated $3.1 billion to the top line in 2024. Propelled by its leadership in antibody-drug conjugate R&D, the Seattle biotech is rapidly growing, evidenced by its revenue figure in 2022 of $2.0 billion. The company stopped providing guidance this year, following its deal with Pfizer, which was revealed in March.

Pfizer also said that it is expanding its “cost-realignment program,” from $3.5 billion to $4 billion in 2024. CFO Dave Denton said that 70% of the program will impact R&D investment, while 30% will come from SIA (selling, information and administrative) costs.

Aside from its COVID products, Pfizer has in the past projected its non-COVID compound annual growth rate from 2020 to 2025 to be 6%. But Denton admitted that the figure would be “very challenging” to meet, given the 2024 guidance.

“We still feel very strongly about the products that we have in the marketplace. They continue to grow nicely. Our launches continue to grow well,” Denton said “But I think that 6, excluding (business development), is a more aggressive target at this time given what has happened.”  

So far this year, Pfizer's share price has dropped by nearly 49%. The company's shares are now trading at a price lower than before the pandemic elevated Pfizer to a global biopharma star.