Pfizer first-quarter results beat expectations despite COVID-19 vaccine sales plunge

By Eleanor Laise and Tomi Kilgore

New product launches expected to accelerate non-COVID sales later this year

Pfizer Inc. (PFE)'s first-quarter results beat Wall Street expectations Tuesday, as the pharmaceutical giant tees up new products to help replace plunging sales of its COVID-19 blockbusters.

Amid the expected decline in COVID-19 vaccine revenue, Pfizer reported net income of $5.54 billion, or 97 cents a share, down from $7.86 billion, or $1.37 a share, in the year-earlier period. Adjusted per-share earnings of $1.23, down 24% from a year earlier, beat the FactSet consensus of 98 cents. First-quarter revenue was $18.28 billion, down 29% from the year-earlier period but ahead of the FactSet consensus of $16.61 billion.

Sales of Pfizer's COVID-19 vaccine dropped to $3.06 billion, down 75% from a year earlier. For the full year, Pfizer expects its COVID-19 vaccine sales to decline about 64% versus 2022 and anticipates that sales of Paxlovid, its COVID-19 antiviral, will drop about 58%.

Those projections are weighing down Pfizer's total expected full-year 2023 revenues. The company reiterated its 2023 guidance, saying it expects revenues of $67 billion to $71 billion, compared with just over $100 billion in 2022, and adjusted per-share earnings of $3.25 to $3.45.

Excluding the COVID-19 products and foreign-exchange impacts, Pfizer said it is on track to deliver 7% to 9% revenue growth for full year 2023, with new product launches stacking up most of that growth in the second half of the year.

"We are in the midst of an 18-month period in which we expect to launch up to 19 potential new products and indications," Pfizer CEO Albert Bourla told analysts on a conference call Tuesday. Those anticipated launches include a new pediatric version of the pneumococcal vaccine Prevnar, which received Food and Drug Administration approval last week for infants and children six weeks through 17 years of age, and respiratory syncytial virus--or RSV--vaccines for older adults and pregnant individuals.

Pfizer on Tuesday shared new data on a next-generation COVID-19 antiviral that is designed to have fewer drug interactions than Paxlovid. Based on "encouraging data" from a phase 1 study, the company plans to advance to phase 2 in the first half of this year, and "pending data, possibly move quickly to phase 3," Mikael Dolsten, Pfizer's chief scientific officer, said on the conference call Tuesday. While the new antiviral is likely to be a very good drug, the development path may also be very long, Evercore ISI analyst Umer Raffat said in a research note Tuesday.

Longer-term, Pfizer said it also expects an uptick in COVID-19 vaccinations. Including assumptions based on the potential approval and launch of a combination COVID-19 and flu vaccine, the company estimated 98 million Pfizer vaccine doses could be administered in the U.S. in 2026, up from an expected 65 million this year.

Pfizer said it still expects its recently announced acquisition of biotech company Seagen (SGEN) to close late this year or in early 2024. The $43 billion deal is expected to strengthen Pfizer's position in oncology, which generated first-quarter revenues of $2.86 billion, or about 16% of Pfizer's total first-quarter biopharmaceuticals revenues, down from $2.97 billion a year earlier. Seagen has a focus on antibody-drug conjugates, which are designed to target cancer cells without harming healthy cells.

Following the close of that deal, "we expect our strong balance sheet will continue to provide the flexibility for future dividend increases and share repurchase activity," as well as additional business development, Pfizer chief financial officer David Denton said in a statement.

Pfizer stock has tumbled 24.5% in the year to date, while the S&P 500 has gained 6.9%.

-Eleanor Laise

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05-02-23 1352ET

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