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Albert Bourla, chief executive officer of Pfizer.
Hollie Adams/Bloomberg
Pfizer
executives say Wall Street analysts haven’t understood just how powerful a hit the company’s Covid-19 products will take this year.
That’s the explanation the company’s chief financial officer, David Denton, gave Barron’s on Tuesday, as to why the 2023 earnings guidance of between $3.25 and $3.45 per share, which he issued earlier in the day, was so far below the $4.33 per share consensus estimate.
“The miss or disconnect was completely within the Covid franchise,” Denton said. “I think the Street hadn’t fully appreciated what that demand profile was going to look like as we cycled into this year.”
Pfizer
laid out its expectations for the Covid-19 market in granular detail on Tuesday, amid investor concerns that demand for the company’s Covid-19 products—its Comirnaty vaccine and Paxlovid antiviral—could tank as the pandemic fades.
The company said it expects sales to bottom out this year before moving upward again in 2024. In the case of Paxlovid, Pfizer says the reversal will be driven in part by what it predicts will be a slight increase in symptomatic infections in the coming years.
In an investor presentation on Tuesday morning, executives disclosed that they expect the number of symptomatic infections reported worldwide to grow in coming years, from 112 million in 2023 to 119 million in 2026.
“It’s a very, very small increase,” Pfizer CEO Albert Bourla told Barron’s. “Vaccinations are going down. So right now the number of infections, and how severe the manifestation of a clinical infection is, has to do with [how] there is a lot of immune protection from the original doses we were giving in [2021 and 2022].”
With fewer people getting vaccinated, Bourla said, overall immune protection will wane over time, leading to more symptomatic infections.
Pfizer expects global demand for Paxlovid to surge from 12 million courses in 2022 to 21 million in 2025. (These projections don’t include China, where the company hopes to increase its sales in the coming years.)
As for vaccine sales, Bourla predicts a significant bump from the approval of combination Covid-19/influenza vaccines. If the company’s Covid-19/influenza vaccine candidate is approved, Pfizer projects that it will administer 98 million doses of the combination vaccine in 2026, up from a projected 67 million of its current Covid-19 jab in 2024.
About half of the U.S. population gets a flu shot each year, and Bourla expects to see similar uptake for Covid-19 vaccines. “Imagine in [2026], that you walk into the pharmacy and you ask for your flu shot,” Bourla said. “And they will offer you, you want the stand-alone flu, or do you want to do the shot together with COVID…I think a very big part of those… will say give me both.”
That’s all a few years off, however. For now, Pfizer is expecting $13.5 billion in Covid-19 vaccine revenue in 2023, down 64% last year, and below the $14.2 billion consensus estimate as of Monday.
Among other factors, Denton said that the U.S. is still working through a backlog of doses purchased by the government last year. Commercial sales won’t begin until the second half of 2023.
“There is some amount of absorption of inventory that’s currently within the hands of government that needs to be utilized before we begin selling incremental products into the marketplace,” Denton said.
Also on Tuesday, Pfizer cut a number of programs under development, most of them early-stage, according to a report in the industry news website Endpoints. The announcement follows a Barron’s report in early January that the company would pull back on early-stage rare disease research.
“We’re always trying to be very disciplined in maximizing our resources and funds on the programs that can give the best benefit for patients,” Pfizer chief scientific officer Mikael Dolsten told Barron’s on Tuesday. “Some of these programs…didn’t make that cut.”
Dolsten said that the programs could have success at more specialized, smaller firms.
Pfizer shares dipped more than 3% in premarket trading on Tuesday, but were up 0.4% as the trading day neared its close.
Write to Josh Nathan-Kazis at [email protected]
www.barrons.com
