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Pfizer forecasts big drop in revenue after record $100M COVID-led haul

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Pfizer on Tuesday forecast a bigger-than-expected drop in sales of its COVID-19 vaccine and treatment for 2023, intensifying investor concerns over demand for the products as governments cut orders and work through inventories.

Chief Executive Albert Bourla said that 2023 ought to be a “transition 12 months” for Pfizer’s COVID products, before potentially returning to growth in 2024.

Pfizer’s total annual sales crossed the $100 billion mark for the primary time in 2022, driven by the greater than $56 billion in sales of its COVID-19 vaccine and Paxlovid antiviral treatment. It expects total 2023 revenue of $67 billion to $71 billion.

“We’re constructing on a big capital position that we all know learn how to deploy to create growth,” Bourla told analysts and investors on conference call. “We’re constructing an R&D engine that’s more productive than ever.”

The corporate launched five recent products last 12 months and hopes to introduce as many as 14 more over the subsequent 12 months and a half, including a vaccine for respiratory syncytial virus (RSV) and an mRNA flu vaccine.

Pfizer CEO Albert Bourla said that 2023 ought to be a “transition 12 months” for Pfizer’s COVID products, before potentially returning to growth in 2024.REUTERS

Pfizer shares were down barely at $43.53. The stock had tumbled 15% this month, through Monday’s close.

Citi analyst Andrew Baum said the corporate is struggling to flee its dependence on COVID drugs.

“We see little here to alter our cautious view on Pfizer’s ex-COVID business,” Baum said in a research note.

The decline in COVID-related revenue just isn’t the one headwind Pfizer is facing.

The US drugmaker will lose patent protections for some big-selling drugs after 2025, including cancer treatment Ibrance and arthritis drug Xeljanz, and has said it expects to lose $17 billion in annual sales between 2025 and 2030 resulting from patent expirations.

Pfizer has turned to acquisitions equivalent to its $5.4 billion buyout of Global Blood Therapeutics and its $11.6 billion purchase of migraine drugmaker Biohaven to bolster its pipeline of future products.

A vial of the Pfizer-BioNTech COVID-19 vaccine.Pfizer forecast 2023 sales of $13.5 billion for its COVID-19 vaccine, below analysts’ estimates of $14.4 billion.AFP via Getty Images

Citi’s Baum said he expects Pfizer will use the spike in revenue from its COVID products to “intensify and upscale” its efforts to purchase other corporations or recent products to fill its pipeline.

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Excluding COVID-related sales, Pfizer expects 2023 revenue to grow 7% to 9%.

Pfizer developed its COVID-19 vaccine with German partner BioNTech, and the businesses split the profits. Pfizer forecast 2023 sales of $13.5 billion for his or her vaccine, below analysts’ estimates of $14.4 billion, and projected $8 billion in Paxlovid sales, in need of Wall Street’s expectation of $10.33 billion.

Bourla said the corporate expects to start out selling its COVID vaccine Comirnaty through business channels in the US within the second half of 2023, fairly than selling the shots on to the federal government. After that transition, the corporate hopes to roughly quadruple the US price of the vaccine.

Analysts and investors have been on the lookout for clarity on China demand for Paxlovid, where the drug is just covered by the country’s broad healthcare insurance plan until late March.

Pfizer said its current 2023 forecast for sales doesn’t assume any revenue from China after April 1, but Bourla said the corporate expects to supply Paxlovid within the private market there thereafter.

“There remains to be a chance for a market in China which could possibly be meaningful” outside of the country’s fundamental insurance channels, said BMO Analyst Evan Seigerman.

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