Pfizer raises earnings view due to cost cuts and lower demand for baxlovid

Written by Bhanvi Satya and Sriparna Roy

(Reuters) – Pfizer raised its annual profit forecast on Wednesday, reporting first-quarter results that beat Wall Street estimates on cost cuts, a smaller-than-expected decline in sales of its antiviral treatment, and strong sales of its pneumonia vaccine.

Sales of cancer treatment Padcev, which Pfizer acquired through its $43 billion deal for Seagen, also came in above analysts' expectations.

The Seagen deal, along with its $4 billion cost-cutting plan, is a key part of Pfizer's post-coronavirus growth strategy. Investors are also tracking the performance of the company's new RSV vaccine, which has been lagging a rival vaccine from GSK since their launch.

The company raised both ends of its 2024 earnings forecast range by 10 cents and now expects earnings of $2.15 to $2.35 per share. Shares of the New York-based pharmaceutical company, which have lost 11% of their value this year, rose about 1% to $25.89 in pre-market trading.

Seagen's targeted cancer therapies, Padcev and Adcetris, generated combined sales of $598 million in the quarter for Pfizer, but Adcetris sales fell short of analysts' expectations.

“We believe stronger new launch performance and further progress in the pipeline will be necessary to change the current narrative for the stock,” JPMorgan analyst Chris Schott said.

Pfizer said it still expects combined sales of $8 billion for its Covid-19 products, the Commernaty vaccine it shares with BioNTech and the oral antiviral Baxlovid.

Baxlovid's sales fell 50% to $2.04 billion during the quarter, still well above analysts' expectations of $762.5 million.

Pfizer last year renegotiated a US contract, allowing the government to return unused stock of Baxlovid. It recorded a favorable adjustment of $771 million in the quarter related to the US government's return of certain courses of treatment.

COVID-19 vaccine sales fell 88% to $354 million, beating estimates of $496.5 million.

Pneumonia vaccines Prevnar had sales of $1.69 billion, beating estimates of $1.66 billion.

Sales of Pfizer's closely watched Apresvo vaccine to protect against respiratory syncytial virus (RSV) were just $145 million, well below the $353.3 million that analysts had expected.

Pfizer reported adjusted profit of 82 cents per share, while analysts on average expected it to earn 52 cents, according to LSEG data.

(Reporting by Bhanvi Satya and Sriparna Roy in Bengaluru; Editing by Arun Kuyur and Bill Berkrot)