Pfizer Earnings: Mixed Results as COVID-19 Sales Fall, but Base Business Posts Steady Gains

Pfizer reported mixed second-quarter results that fell below our projections, but we don't expect a major change to the firm's fair value estimate. The lower-than-expected sales from COVID-19 vaccine Comirnaty and COVID-19 treatment Paxlovid still have the potential to rebound later in the year during the typically more robust fall respiratory season. Pfizer has contingency plans ready to significantly cut costs if the COVID-19-related sales don't improve in the third quarter. We project Pfizer COVID-19 sales above consensus expectations but are below management's implied long-term run rate. We think the new formulation of Comirnaty will support a more immediate rebasing of pricing close to $70 postpandemic (including rebates) from a close to $20 pandemic price. The price increase should help buoy Comirnaty sales, but we still expect the vaccine's sales to fall by over 60% in 2023.