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Pfizer (PFE) Q4 Earnings Top, Revenues Miss on COVID Sales Slump
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Pfizer (PFE - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 10 cents in contrast to the Zacks Consensus Estimate of a loss of 19 cents per share. In the year-ago quarter, the company had recorded earnings of $1.41 per share.
Revenues came in at $14.25 billion, down 41% from the year-ago quarter on a reported basis, reflecting an operational decline of 42% but a currency benefit of 1%. Total revenues missed the Zacks Consensus Estimate of $14.37 billion.
The revenue decline, as expected, was due to a steep drop in revenues from its COVID-19 products, Comirnaty and Paxlovid, on lower demand.
Pfizer records direct sales and alliance revenues from its partner, BioNTech (BNTX - Free Report) , for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.
International revenues declined 39% to $9.66 billion. U.S. revenues declined 46% to $4.59 billion.
Adjusted selling, informational and administrative (SI&A) expenses rose 1% (operationally) in the quarter to $4.47 billion. Adjusted R&D expenses declined 24% to $2.77 billion.
Segment Discussion
Pfizer reports its revenues under three broad sub-segments of its Biopharma operating segment — Primary Care, Specialty Care and Oncology. Sales of the Primary Care segment declined 60% operationally to $6.99 billion. The Specialty Care unit recorded sales of $3.95 billion, up 11%. Sales of Oncology declined 2% to $2.93 billion.
Primary Care
In Primary Care, direct sales and alliance revenues from BioNTech for Comirnaty were $5.36 billion in the quarter, down 54% year over year. Comirnaty sales declined 57% in the United States due to lower contracted deliveries to the U.S. government following the commercial transition in September 2023. Comirnaty sales declined 53% outside U.S. markets due to lower demand and contracted deliveries. Comirnaty sales missed our estimate of $5.57 billion.
Paxlovid revenues declined to negative $3.2 billion in the quarter due to a non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 for the return of an estimated 6.5 million U.S.-government EUA-labeled treatment courses.
Alliance revenues and direct sales from Bristol-Myers for blood-thinning treatment Eliquis rose 9% to $1.61 billion. Alliance revenues from Eliquis beat the Zacks Consensus Estimate of $1.51 billion as well as our model estimate of $1.49 billion.
Global Prevnar family revenues declined 7% to $1.61 billion due to lower demand for pediatric patients in certain emerging markets and unfavorable timing of customer orders. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult and pediatric). Prevnar revenues missed the Zacks Consensus Estimate of $1.89 billion as well as our model estimate of $1.76 billion.
Prevnar sales declined 3% in the United States and 14% in international markets.
Newly acquired product Nurtec ODT/Vydura contributed $282 million in the fourth quarter compared with $253 million in the previous quarter. Nurtec ODT/Vydura was added to Pfizer’s portfolio with the acquisition of the majority of Biohaven in 2022.
Among the new products, Pfizer’s RSV vaccine, Abrysvo, recorded sales of $515 million in the fourth quarter compared with $375 million in the previous quarter. Abrysvo was approved to help protect older adults and infants through maternal immunization in the United States as well as the EU in 2023. Abrysvo sales slightly beat our model estimate of $510 million.
Specialty Care
Global Vyndaqel family revenues of $961 million rose 39% year over year. Vyndaqel family includes global revenues from Vyndaqel as well as revenues for Vyndamax in the United States and Vynmac in Japan. Vyndaqel family sales beat the Zacks Consensus Estimate of $945.0 million as well as our model estimate of $921.0 million.
Xeljanz sales were flat at $493 million. Enbrel revenues declined 12% to $203 million due to continued biosimilar competition in key European markets and Japan.
New product, Oxbryta, generated sales of $96 million in the fourth quarter of 2023 compared with $85 million in the previous quarter. Oxbryta was added with the October 2022 acquisition of Global Blood Therapeutics.
Another new drug, Cibinqo, approved in 2022, recorded revenues of $37 million in the fourth quarter, the same as in the previous quarter.
Oncology
In Oncology, Ibrance revenues declined 13% year over year to $1.19 billion. Ibrance demand trends are being hurt globally due to competitive pressure. Ibrance revenues missed the Zacks Consensus Estimate of $1.21 billion.
Xtandi recorded alliance revenues of $314 million in the quarter, down 2% year over year. Inlyta revenues were $263 million in the quarter, up 9%.
The $43 billion acquisition of Seagen in December 2023 added four antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio. These drugs contributed $46 million, $52 million, $17 million and $4 million, respectively, to Pfizer’s oncology revenues in the fourth quarter, subsequent to the closing of the acquisition on Dec 14, 2023.
Full-Year 2023 Results
Full-year 2023 sales declined 42% to $58.5 billion, beating the Zacks Consensus Estimate of $60.07 billion. Sales were within the guided range of $58.0 to $61.0 billion. On an operational basis, sales declined 41% in the year. Excluding COVID-19 products, Paxlovid and Comirnaty, revenues grew 7% operationally, within the full-year 2023 non-COVID operational revenue growth target of 6% to 8%.
Adjusted earnings for 2023 were $1.84 per share, down 72% year over year. Earnings beat the Zacks Consensus Estimate of $1.38 per share as well as the guided range of $1.45 to $1.65.
2024 Guidance
Pfizer maintained its revenue and profit guidance for 2024 that it had provided in December 2023. Pfizer’s guidance for 2024 includes its expectations from the acquisition of Seagen.
Pfizer expects total revenues to be in the range of $58.5 to $61.5 billion in 2024, almost flat from 2023 levels.
The 2024 revenue guidance includes $8 billion in potential combined revenues for Paxlovid and Comirnaty. The $8 billion combined guidance comprises $5 billion in sales from Comirnaty and $3 billion from Paxlovid.
The total revenue guidance also includes $3.1 billion in expected revenues from Seagen.
The total revenue guidance includes approximately $1 billion due to the reclassification of Pfizer’s royalty income from Other (Income)/Deductions into the Revenue line.
Excluding revenues from Seagen and the abovementioned reclassification, the revenue guidance for legacy Pfizer is $54.5 to $57.5 billion, which indicates a decline from the 2023 level.
Excluding COVID-19 products but including Seagen, Pfizer expects its revenues to rise 8% to 10% on an operational basis in 2024. Excluding the contribution from COVID-19 products as well as Seagen, operational sales are expected to increase 3%-5%.
Adjusted earnings are expected in the range of $2.05 to $2.25 per share, including the expected impact of financing costs related to the Seagen acquisition. This range includes the expected impact of 40 cents dilution from the Seagen acquisition. Adjusted earnings for legacy Pfizer are expected in the range of $2.45 to $2.65 per share.
Pfizer expects cost cuts and internal restructuring, including layoffs, to deliver savings of $4 billion in 2024. Research and development expense is expected in the range of $11.0 to $12.0 billion in 2024. SI&A spending is expected in the range of $13.8 to $14.8 billion. The adjusted tax rate is expected to be approximately 15% in 2024.
Our Take
Pfizer’s fourth-quarter results were mixed as it beat estimates for earnings while missing the same for sales. The company reaffirmed its 2024 sales and earnings guidance provided on Dec 13, 2023.
With the end of the pandemic, sales of Pfizer’s COVID-19 products declined steeply in 2023. However, sales of some key non-COVID products like Vyndaqel/Vyndamax and Eliquis alliance revenues, newly acquired products like Nurtec and new product launches like Abrysvo provided some top-line support. Revenues from Pfizer’s non-COVID products rose 8% operationally in the fourth quarter.
Pfizer’s shares were up more than 1% in pre-market trading. In the past year, Pfizer’s stock has declined 36.9% against an increase of 19.8% for the industry.
Image Source: Zacks Investment Research
Pfizer’s key new product approvals/launches are Abrysvo RSV vaccine, Velsipity (etrasimod), a once-daily pill for ulcerative colitis, Penbraya pentavalent meningococcal vaccine, Zavzpret nasal spray for migraine, Cibinqo for atopic dermatitis, Litfulo (ritlecitinib) for severe alopecia areata, Elrexfio (elranatamab) for relapsed/refractory multiple myeloma and Ngenla for pediatric growth hormone deficiency.
Pfizer expects better non-COVID operational revenue growth in the future quarters, driven by its in-line products like Vyndaqel family and Prevnar, new launches like Abrysvo, Velsipity, Penbraya, Zavzpret as well as newly acquired products, including those acquired from Seagen.
Zacks Rank and Stocks to Consider
Pfizer has a Zacks Rank #5 (Strong Sell) currently.
In the past 60 days, estimates for Regeneron’s 2024 earnings have risen from $41.60 per share to $44.23 per share. Regeneron’s stock has surged 29.8% in the past year.
Regeneron beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.34%.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.15 to $3.32 over the past 60 days. NVO’s stock has surged 56.8% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 0.58% on average.
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Pfizer (PFE) Q4 Earnings Top, Revenues Miss on COVID Sales Slump
Pfizer (PFE - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 10 cents in contrast to the Zacks Consensus Estimate of a loss of 19 cents per share. In the year-ago quarter, the company had recorded earnings of $1.41 per share.
Revenues came in at $14.25 billion, down 41% from the year-ago quarter on a reported basis, reflecting an operational decline of 42% but a currency benefit of 1%. Total revenues missed the Zacks Consensus Estimate of $14.37 billion.
The revenue decline, as expected, was due to a steep drop in revenues from its COVID-19 products, Comirnaty and Paxlovid, on lower demand.
Pfizer records direct sales and alliance revenues from its partner, BioNTech (BNTX - Free Report) , for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.
International revenues declined 39% to $9.66 billion. U.S. revenues declined 46% to $4.59 billion.
Adjusted selling, informational and administrative (SI&A) expenses rose 1% (operationally) in the quarter to $4.47 billion. Adjusted R&D expenses declined 24% to $2.77 billion.
Segment Discussion
Pfizer reports its revenues under three broad sub-segments of its Biopharma operating segment — Primary Care, Specialty Care and Oncology. Sales of the Primary Care segment declined 60% operationally to $6.99 billion. The Specialty Care unit recorded sales of $3.95 billion, up 11%. Sales of Oncology declined 2% to $2.93 billion.
Primary Care
In Primary Care, direct sales and alliance revenues from BioNTech for Comirnaty were $5.36 billion in the quarter, down 54% year over year. Comirnaty sales declined 57% in the United States due to lower contracted deliveries to the U.S. government following the commercial transition in September 2023. Comirnaty sales declined 53% outside U.S. markets due to lower demand and contracted deliveries. Comirnaty sales missed our estimate of $5.57 billion.
Paxlovid revenues declined to negative $3.2 billion in the quarter due to a non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 for the return of an estimated 6.5 million U.S.-government EUA-labeled treatment courses.
Alliance revenues and direct sales from Bristol-Myers for blood-thinning treatment Eliquis rose 9% to $1.61 billion. Alliance revenues from Eliquis beat the Zacks Consensus Estimate of $1.51 billion as well as our model estimate of $1.49 billion.
Global Prevnar family revenues declined 7% to $1.61 billion due to lower demand for pediatric patients in certain emerging markets and unfavorable timing of customer orders. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult and pediatric). Prevnar revenues missed the Zacks Consensus Estimate of $1.89 billion as well as our model estimate of $1.76 billion.
Prevnar sales declined 3% in the United States and 14% in international markets.
Newly acquired product Nurtec ODT/Vydura contributed $282 million in the fourth quarter compared with $253 million in the previous quarter. Nurtec ODT/Vydura was added to Pfizer’s portfolio with the acquisition of the majority of Biohaven in 2022.
Among the new products, Pfizer’s RSV vaccine, Abrysvo, recorded sales of $515 million in the fourth quarter compared with $375 million in the previous quarter. Abrysvo was approved to help protect older adults and infants through maternal immunization in the United States as well as the EU in 2023. Abrysvo sales slightly beat our model estimate of $510 million.
Specialty Care
Global Vyndaqel family revenues of $961 million rose 39% year over year. Vyndaqel family includes global revenues from Vyndaqel as well as revenues for Vyndamax in the United States and Vynmac in Japan. Vyndaqel family sales beat the Zacks Consensus Estimate of $945.0 million as well as our model estimate of $921.0 million.
Xeljanz sales were flat at $493 million. Enbrel revenues declined 12% to $203 million due to continued biosimilar competition in key European markets and Japan.
New product, Oxbryta, generated sales of $96 million in the fourth quarter of 2023 compared with $85 million in the previous quarter. Oxbryta was added with the October 2022 acquisition of Global Blood Therapeutics.
Another new drug, Cibinqo, approved in 2022, recorded revenues of $37 million in the fourth quarter, the same as in the previous quarter.
Oncology
In Oncology, Ibrance revenues declined 13% year over year to $1.19 billion. Ibrance demand trends are being hurt globally due to competitive pressure. Ibrance revenues missed the Zacks Consensus Estimate of $1.21 billion.
Xtandi recorded alliance revenues of $314 million in the quarter, down 2% year over year. Inlyta revenues were $263 million in the quarter, up 9%.
The $43 billion acquisition of Seagen in December 2023 added four antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio. These drugs contributed $46 million, $52 million, $17 million and $4 million, respectively, to Pfizer’s oncology revenues in the fourth quarter, subsequent to the closing of the acquisition on Dec 14, 2023.
Full-Year 2023 Results
Full-year 2023 sales declined 42% to $58.5 billion, beating the Zacks Consensus Estimate of $60.07 billion. Sales were within the guided range of $58.0 to $61.0 billion. On an operational basis, sales declined 41% in the year. Excluding COVID-19 products, Paxlovid and Comirnaty, revenues grew 7% operationally, within the full-year 2023 non-COVID operational revenue growth target of 6% to 8%.
Adjusted earnings for 2023 were $1.84 per share, down 72% year over year. Earnings beat the Zacks Consensus Estimate of $1.38 per share as well as the guided range of $1.45 to $1.65.
2024 Guidance
Pfizer maintained its revenue and profit guidance for 2024 that it had provided in December 2023. Pfizer’s guidance for 2024 includes its expectations from the acquisition of Seagen.
Pfizer expects total revenues to be in the range of $58.5 to $61.5 billion in 2024, almost flat from 2023 levels.
The 2024 revenue guidance includes $8 billion in potential combined revenues for Paxlovid and Comirnaty. The $8 billion combined guidance comprises $5 billion in sales from Comirnaty and $3 billion from Paxlovid.
The total revenue guidance also includes $3.1 billion in expected revenues from Seagen.
The total revenue guidance includes approximately $1 billion due to the reclassification of Pfizer’s royalty income from Other (Income)/Deductions into the Revenue line.
Excluding revenues from Seagen and the abovementioned reclassification, the revenue guidance for legacy Pfizer is $54.5 to $57.5 billion, which indicates a decline from the 2023 level.
Excluding COVID-19 products but including Seagen, Pfizer expects its revenues to rise 8% to 10% on an operational basis in 2024. Excluding the contribution from COVID-19 products as well as Seagen, operational sales are expected to increase 3%-5%.
Adjusted earnings are expected in the range of $2.05 to $2.25 per share, including the expected impact of financing costs related to the Seagen acquisition. This range includes the expected impact of 40 cents dilution from the Seagen acquisition. Adjusted earnings for legacy Pfizer are expected in the range of $2.45 to $2.65 per share.
Pfizer expects cost cuts and internal restructuring, including layoffs, to deliver savings of $4 billion in 2024. Research and development expense is expected in the range of $11.0 to $12.0 billion in 2024. SI&A spending is expected in the range of $13.8 to $14.8 billion. The adjusted tax rate is expected to be approximately 15% in 2024.
Our Take
Pfizer’s fourth-quarter results were mixed as it beat estimates for earnings while missing the same for sales. The company reaffirmed its 2024 sales and earnings guidance provided on Dec 13, 2023.
With the end of the pandemic, sales of Pfizer’s COVID-19 products declined steeply in 2023. However, sales of some key non-COVID products like Vyndaqel/Vyndamax and Eliquis alliance revenues, newly acquired products like Nurtec and new product launches like Abrysvo provided some top-line support. Revenues from Pfizer’s non-COVID products rose 8% operationally in the fourth quarter.
Pfizer’s shares were up more than 1% in pre-market trading. In the past year, Pfizer’s stock has declined 36.9% against an increase of 19.8% for the industry.
Image Source: Zacks Investment Research
Pfizer’s key new product approvals/launches are Abrysvo RSV vaccine, Velsipity (etrasimod), a once-daily pill for ulcerative colitis, Penbraya pentavalent meningococcal vaccine, Zavzpret nasal spray for migraine, Cibinqo for atopic dermatitis, Litfulo (ritlecitinib) for severe alopecia areata, Elrexfio (elranatamab) for relapsed/refractory multiple myeloma and Ngenla for pediatric growth hormone deficiency.
Pfizer expects better non-COVID operational revenue growth in the future quarters, driven by its in-line products like Vyndaqel family and Prevnar, new launches like Abrysvo, Velsipity, Penbraya, Zavzpret as well as newly acquired products, including those acquired from Seagen.
Zacks Rank and Stocks to Consider
Pfizer has a Zacks Rank #5 (Strong Sell) currently.
Pfizer Inc. Price and Consensus
Pfizer Inc. price-consensus-chart | Pfizer Inc. Quote
Some better-ranked large drugmakers worth considering are Regeneron Pharmaceuticals (REGN - Free Report) and Novo Nordisk (NVO - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Regeneron’s 2024 earnings have risen from $41.60 per share to $44.23 per share. Regeneron’s stock has surged 29.8% in the past year.
Regeneron beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.34%.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.15 to $3.32 over the past 60 days. NVO’s stock has surged 56.8% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 0.58% on average.