© Reuters. Pfizer logo is seen in this illustration taken, May 1, 2022. REUTERS/Dado Ruvic/Illustration
By Bhanvi Satija and Michael Erman
(Reuters) -Pfizer reported a surprise quarterly profit on Tuesday, helped by cost-cutting measures and fewer returns of its COVID treatment Paxlovid by the U.S. government than it had expected, but revenue fell short of Wall Street estimates.
Investors fled Pfizer (NYSE:) last year as pandemic worries declined and billions of dollars in COVID-19 vaccine and treatment sales disappeared. The company has responded with a recent purchase of cancer drugmaker Seagen, a $4 billion cost-cutting program, and internal restructuring.
The New York-based drugmaker earned 10 cents per share on an adjusted basis for the fourth quarter. Analysts on average had expected a loss of 22 cents per share, according to LSEG data.
Overall revenue in the quarter was $14.25 billion, shy of Wall Street estimates of $14.42 billion.
Jeff Jonas, portfolio manager at Gabelli Funds, said he was concerned about the company’s non-COVID performance, after revenue for products like breast cancer treatment Ibrance and the Prevnar pneumonia vaccine were lighter than expected.
“Historically I thought they had one of the best sales forces in the industry and they’ve been able to at least sell and execute on drugs pretty well, even if their R&D maybe wasn’t always the best. But there have been some challenges there recently,” Jonas said.
Ibrance, which is facing intense competition from rival treatments, saw sales fall 12.6% to $1.12 billion in the quarter, below analysts’ forecasts for $1.23 billion.
Prevnar brought in sales of $1.61 billion, below estimates of $2 billion.
Revenue from COVID products, the Paxlovid antiviral treatment and vaccine Comirnaty, came in at $12.5 billion for 2023, meeting the company’s own targets for the year, but a far cry from the $57 billion peak racked up in 2022.
Pfizer recorded a $3.5 billion revenue reversal related to Paxlovid during the fourth quarter for the return of about 6.5 million treatment courses.
Pfizer had forecast a non-cash $4.2 billion revenue reversal based on the return of around 7.9 million courses at the end of 2023.
The company maintained its 2024 adjusted profit and sales forecasts of $2.05 to $2.25 per share earnings, and revenue of $58.5 billion to $61.5 billion.
That includes a $3.1 billion contribution from cancer drugmaker Seagen and $8 billion in sales from Paxlovid and COVID-19 vaccine Comirnaty, which it makes with German partner BioNTech (NASDAQ:).
Pfizer recorded research expenses of $2.82 billion in the quarter, down 22% from a year earlier.
The company said the decline was driven by lower compensation-related expenses, as well as lower spending across its vaccine and rare disease programs.
Shares of the company rose marginally in premarket trading.