Amid a looming standoff with activist investor Starboard Value, Pfizer fought back against accusations of underperforming by delivering double-digit revenue growth over the third quarter and notching up its full-year sales guidance by $1.5 billion on the back of a comeback quarter for COVID treatment Paxlovid.
Pfizer’s COVID franchise has been dragging down sales for several quarters now as the pandemic fades and demand for COVID products sinks across the board. With a recent COVID wave and a $442 million order from the U.S. government, Paxlovid sales hit new heights at $2.7 billion, a whopping $2.5 billion increase from last year’s third quarter. While no sales were recorded over that period last year, Pfizer emphasized, this year’s second quarter saw just $251 million in revenue for the antiviral, reflecting significant quarterly growth.
Paxlovid on its own drove much of Pfizer’s total sales (PDF) haul of $17.7 billion, up 32% year-over-year. Taking out COVID revenues, the company pulled $13.6 billion in sales in a 14% jump. Still, “questions on sustainability” of the drugmaker’s COVID franchise remain, Citi analysts pointed out in a note to clients. COVID vaccine Comirnaty, meanwhile, brought in $119 million in 9% growth from last year’s third quarter due largely to an earlier approval of the variant-adjusted vaccine compared to last year’s updated shot.
Over in oncology, the sector saw 31% year-over-year growth to $4 billion, making Pfizer the “third largest biopharma company in oncology by revenue” through the first half of the year, Bourla said in prepared remarks (PDF) for the company’s third-quarter earnings call.
Assets from Pfizer’s 2023 Seagen acquisition in particular made up $854 million of revenues over the quarter. The deal brought in products such as bladder cancer therapy Padcev, which over the quarter was “disappointing” with $394 million in sales, Citi analysts noted. Still, Bourla called a recent Padcev combination launch with Merck’s Keytruda the “most prescribed first-line treatment in the U.S.” for locally advanced or metastatic urothelial cancer.
The $43 billion Seagen buyout is central to Starboard’s concerns with the company, which center on Pfizer’s M&A and R&D investments. At a recent investor summit, the investor called Pfizer’s capital allocation and M&A “worst-in-class” and held firm that “the board needs to actively hold management accountable for earning appropriate returns on R&D and M&A moving forward.”
Pfizer, meanwhile, believes "the most important thing is what we are doing going forward," Bourla said on the call.
Starboard recently picked up a $1 billion stake in the drugmaker and held a strategy meeting with CEO Albert Bourla and lead independent director Shantanu Narayen.
Elsewhere, Pfizer’s global Paxlovid sales topped its revenue from Bristol Myers Squibbs-partnered Eliquis, which took home the bulk of revenue with $1.6 billion and came in above that of the Prevnar vaccine family with $1.8 billion. Prevnar, a series of pneumococcal conjugate vaccines, could be in line for a sales bump with a recent recommendation from the CDC’s vaccines advisory committee that encourages all adults aged 50 and older to receive either Pfizer’s Prevnar 20 or Merck’s rival Capvaxive, adding in millions of more eligible adults from the previous recommendation that applied to those older than 65.
The company is now forecasting yearly revenues of $61 billion to $64 billion, up from the previous estimates of $59.5 billion to $62.5 billion based on “our focused execution and strong year-to-date results,” Chief Financial Officer David Denton said.