Pfizer (PFE) third-quarter losses narrow, missing due to COVID crash

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Pfizer PFE reported a percentage-adjusted loss of 17 cents in the third quarter of 2023, narrower than Zacks’ consensus estimate of a loss of 32 cents per percent. In the prior-year quarter, the company had posted a profit. of $1. 78 consistent with a consistent percentage.

In the third quarter, Pfizer recorded a $5. 5 billion non-cash rate for COVID-19 product stock cancellations and other charges on the goods sold load line, detracting from earnings growth.

Revenue of $13. 23 billion, down 42% from the prior year quarter as reported, reflecting a 41% operating decline and a 1% adverse currency impact. The total gain fell short of the Zacks consensus estimate of $13. 77 billion.

The drop, as expected, was due to a sharp drop in profits from its COVID-19 products, Comirnaty and Paxlovid, following a drop in demand.

Pfizer reports direct sales and earnings from the alliance of its partner, BioNTech BNTX, for the COVID-19 vaccine, Comirnaty, as well as product proceeds from its oral antiviral tablet for COVID, Paxlovid.

International fell 37% to $5. 43 billion. The U. S. fell 44% to $7. 8 billion.

Adjusted SG&A (SA) expenses

Pfizer reports earnings in 3 main sub-segments of its Biopharmaceuticals operating segment: Primary Care, Specialty Care, and Oncology. Primary Care sales decreased operationally 60% to $6. 29 billion. The Specialty Care unit reported a profit of $3. 76 billion, an increase of 12%. Oncology sales decreased 5% to $2. 89 billion.

First aid

In number one attention, direct sales and earnings from BioNTech’s alliance for Comirnaty were $1. 31 billion in the quarter, down 70% year-over-year. Comirnaty sales decreased 66% in the U. S. Due to declining contract deliveries to the U. S. government,U. S. Declined 79% outside of U. S. markets. due to the decrease in contract requests and deliveries in anticipation of the advertising transition. Comirnaty’s sales fell short of our estimate of $1. 79 billion.

Paxlovid contributed $202 million to sales in the quarter, up from $7. 5 billion in the year-ago quarter. Paxlovid sales fell short of our estimate of $614. 9 million. There were no sales of Paxlovid in the U. S. in the U. S. in the third quarter in anticipation of the trade transition. . Lower contract deliveries to most foreign markets also hurt sales.

Earnings from the alliance and direct sales of Bristol-Myers’ BMY blood-thinning treatment, Eliquis, rose 3% to $1. 5 billion. The Bristol-Myers alliance earnings for Eliquis met Zacks’ consensus estimate of $1. 52 billion, but are in line with our style estimate.

Prevnar’s global earnings rose 15% to $1. 85 billion. Prevnar earnings include the Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult and pediatric) earnings source. Prevnar’s earnings beat Zacks’ consensus estimate of $1. 69 billion, as well as our style estimate of $1. 71 billion.

Prevnar sales increased 20% in the U. S. , driven primarily by strong patient demand for Prevnar 20 for adults and U. S. approval. UU. de Prevnar 20 for the pediatric patient population and related compression stockings. Prevnar sales increased 5% in overseas markets, driven by expansion in Prevenar thirteen for pediatric patients in emerging markets.

The newly acquired Nurtec ODT/Vydura product contributed $253 million in the third quarter, compared to $247 million in the previous quarter. Nurtec ODT/Vydura joined Pfizer’s portfolio with the acquisition of Biohaven’s maximum in 2022.

Among the new products, the Pfizer RSV vaccine, Abrysvo, had sales of $375 million in the quarter. Abrysvo has been approved to help the elderly and infants by vaccinating mothers in the U. S. The U. S. and EU will be launched in 2023.

Specialty care

Rare disease drug Vyndaqel/Vyndamax posted sales of $892 million in the quarter, up 47% year-over-year. Vyndaqel/Vyndamax sales beat the Zacks consensus estimate of $815. 0 million, as well as our style estimate of $808. 9 million.

Xeljanz sales rose 1% to $503 million. Xeljanz sales beat the Zacks consensus estimate of $423. 3 million, as well as our style estimate of $454. 3 million.

Enbrel earnings declined 7% to $208 million due to the continued biosimilars festival in key markets in Europe and Japan.

The new product, Oxbryta, generated a profit of $85 million in the third quarter of 2023, up from $77 million in the previous quarter. Oxbryta joined with the acquisition of Global Blood Therapeutics in October 2022.

Last year, the new drug Cibinqo posted profits of $37 million in the third quarter, up from $38 million in the same quarter a year earlier.

Oncology

In oncology, Ibrance’s earnings declined 3% year-over-year to $1. 24 billion. Ibrance’s trends are affected globally due to competitive pressure. Ibrance’s earnings fell short of Zacks’ consensus estimate, as well as our estimate of $1. 26 billion.

Xtandi reported alliance profit of $313 million in the quarter, down 2% year-over-year. Inlyta’s profit was $252 million in the quarter, up 1%.

On Oct. 13, Pfizer cut its profit forecast for 2023 due to weaker-than-expected demand for Comirnaty and Paxlovid. Revenue direction dropped from $67. 0 billion to $70. 0 billion to $58. 0 billion to $61. 0 billion. Pfizer maintained those forecasts in the earnings release. The projected diversity of $58. 0 billion to $61. 0 billion indicates a year-over-year decrease in diversity from 39% to 42% and an operational decrease in diversity from 38% to 41%.

The guidance cut included a $7 billion decline in Paxlovid earnings and a $2 billion relief in Comirnaty’s earnings. The previous earnings direction included approximately $13. 5 billion in sales from Comirnaty and Paxlovid, amounting to approximately $8 billion. Paxlovid and Comirnaty’s combined full-year 2023 earnings are now expected to be about $12. 5 billion (Comirnaty, $11. 5 billion and Paxlovid, $1 billion), compared to the $21. 5 billion expected in the past.

Pfizer cut its 2023 outlook for Paxlovid due to the reversal of $4. 2 billion in non-cash gains from the return of about 7. 9 million U. S. government-labeled Paxlovid drugs. In the U. S. at the end of 2023. La Comirnaty guidance was downgraded due to a lower forecast. higher-than-expected vaccination rates.

Excluding COVID-19-like products, Pfizer continues to expect earnings to grow 6% to 8% on an operating basis in 2023 as sales of non-COVID drugs remain strong.

Due to lower-than-expected COVID earnings and stock redemptions, the adjusted EPS address was reduced from $3. 25 to $3. 45 to $1. 45 to $1. 65 earlier this month. The new diversity of direction was maintained at the time of the earnings release. This management diversity indicates a reported decrease in diversity from 75% to 78% year-over-year and an operational decrease in diversity from 72% to 75%.

Pfizer plans to launch Comirnaty and Paxlovid in classic U. S. advertising markets. U. S. demand for those products declines. While Comirnaty’s U. S. market transitioned to ad-supported products in September 2023, Paxlovid’s advertising transition is expected in November 2023. .

With weaker-than-expected COVID demand, Pfizer announced rate cuts, adding layoffs, on Oct. 13. Rate discounts are expected to generate targeted savings of at least $3. 5 billion, of which approximately $1. 0 billion is expected to be realized in 2023. and at least $2. 5 billion is expected to be learned by 2024.

Adjusted sales charge as a percentage of sales is expected to be between 41% and 43% of total sales (previously, 28% and 30%). Research and progression expenditures are expected to be between $11. 9 billion and $12. 9 billion (previously, $12. 4 billion to $13. 4 billion). IS Expenses

IPR Expenses

Pfizer’s third-quarter effects were mixed, beating earnings estimates but not doing the same for sales. The company reaffirmed its 2023 sales and earnings guidance provided on October 13, 2023.

While COVID sales are declining due to declining demand, some key non-COVID products, such as Vyndaqel/Vyndamax and Prevnar, recently acquired such as Nurtec ODT/Vydura and Oxbryta, and new product launches are offering top-notch support. Pfizer’s non-COVID profits are higher. 10% operationally in Q3.

Pfizer’s inventories declined in premarket trading. Year-to-date, Pfizer’s inventories are down 40. 3%, compared with a 0. 5% increase for the industry.

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Pfizer’s major new approved products/launches are Abrysvo RSV vaccine, Velsipity (etrasimod), once-daily tablet for ulcerative colitis, Penbraya pentavalent meningococcal vaccine, Zavzpret nasal spray for migraine, Cibinqo for atopic dermatitis, Litfulo (ritlecitinib) for severe alopecia areata. . , Elrexphium (elranatamab) for relapsed/refractory myeloma and Ngenla for pediatric expansion hormone deficiency.

Pfizer expects further expansion of non-COVID operating profit in the coming quarters, driven by its online products, new launches such as Abrysvo, Velsipity, Penbraya, Zavzpret, and recently acquired products.

Pfizer believes that new product launches, coupled with business progression activities, coupled with the proposed acquisition of Seagen SGEN, put it in a position for operational expansion in 2025 and beyond.

Pfizer announced the purchase of cancer drugmaker Seagen for $229 per percent in cash, for a total business of about $43 billion in March.

The acquisition of Seagen to Pfizer’s cancer drug portfolio is expected to add a number of antibody and drug conjugates. The Pfizer/Seagen transaction is expected to close in late 2023 or early 2024. Seagen’s shareholders have already approved the deal. Earlier this month, Pfizer obtained unconditional antitrust clearance from the European Commission for the proposed acquisition.

Pfizer lately has a No. 3 (hold) Zacks rank. You can see the full list of Zacks’ No. 1 rank (strong buy) stocks today here.

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