In the third quarter, Pfizer (NYSE:PFE) experienced a significant revenue setback, with a loss exceeding $2 billion, primarily attributed to the anticipated decline in sales of COVID-19 products. Sales of Pfizer’s COVID treatment, Paxlovid, and the Comirnaty vaccine dropped by 97% and 70%, respectively. This decline was consistent with a broader trend in the pharmaceutical industry, as companies shifted their focus from supplying governments to the commercial market.
Both Pfizer and industry analysts had foreseen a decline in revenue from these critical products, with the expectation of eventual recovery as commercial sales gained momentum. Two weeks prior, Pfizer Inc. had already cautioned about weaker-than-expected sales of its COVID-19 drugs, prompting a reduction of annual revenue projections by $9 billion.
While the drop in sales of Paxlovid and Comirnaty had impacted the second quarter, Pfizer had expressed optimism in August about a resurgence in the latter half of 2023. In the third quarter, the company recorded a non-cash charge of $5.6 billion for inventory write-offs related to COVID-19 products.
Excluding these products, Pfizer reported a 10% growth in operational revenue, adjusted for foreign exchange rate fluctuations, partly fueled by increased demand for its Prevnar pneumonia vaccines. Chief Financial Officer David Denton noted, “Our core business is performing nicely. We continue to make traction.”
Pfizer’s adjusted loss per share for the quarter was 17 cents, considerably narrower than the expected 42 cents, according to analysts surveyed by FactSet. Total revenue decreased by 42% to $13.23 billion, falling short of the anticipated $13.77 billion in revenue.
Pfizer has provided guidance for full-year adjusted earnings in the range of $1.45 to $1.65 per share, while analysts, on average, expect earnings of $2.13 per share, according to FactSet. The company has initiated a cost-cutting program, projecting savings of at least $3.5 billion by the end of 2024.
Pfizer’s stock price experienced a decline of 30 cents to $30.25 in midday trading on Tuesday, whereas broader stock indexes showed mixed performance. Notably, Pfizer’s share price has fallen by approximately 40% over the year, in stark contrast to the Standard & Poor’s 500 index, which has seen an increase of over 8%.
In 2021, Pfizer’s stock price had surpassed $60, reaching an all-time high, buoyed by Comirnaty’s remarkable revenue generation of more than $36 billion during that year.
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Author Stephanie Bédard-Châteauneuf 
