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Why Is Pfizer (PFE) Down 1.4% Since Last Earnings Report?

A month has gone by since the last earnings report for Pfizer (PFE). Shares have lost about 1.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Pfizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Q3 Loss Narrows, Sales Miss on COVID Slump

Pfizer’s third-quarter results were mixed as it beat estimates for earnings while missing the same for sales. The company reaffirmed its 2023 sales and earnings guidance provided on Oct 13, 2023.

Pfizer reported third-quarter 2023 adjusted loss per share of 17 cents, which was narrower than the Zacks Consensus Estimate of a loss of 32 cents per share. In the year-ago quarter, the company had recorded earnings of $1.78 per share.

In the third quarter, Pfizer recorded a non-cash charge of $5.6 billion for COVID-19 product inventory write-offs and other charges in the cost of goods sold line, which significantly hurt earnings growth.

Revenues came in at $13.23 billion, down 42% from the year-ago quarter on a reported basis, reflecting an operational decline of 41% and currency headwinds of 1%. Total revenues missed the Zacks Consensus Estimate of $13.77 billion.

The decline, as expected, was due to a steep drop in revenues from its COVID-19 products, Comirnaty and Paxlovid on lower demand.

While sales of COVID products are declining due to lower demand, some key non-COVID products like Vyndaqel/Vyndamax and Prevnar, newly acquired products like Nurtec ODT/Vydura and Oxbryta and new product launches are providing top-line support. Revenues from Pfizer’s non-COVID products rose 10% operationally in the third quarter.

International revenues declined 37% to $5.43 billion. U.S. revenues declined 44% to $7.8 billion.

Adjusted selling, informational and administrative (SI&A) expenses declined 1% (operationally) in the quarter to $3.21 billion. Adjusted R&D expenses were flat at $2.68 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 $6.29 billion. The Specialty Care unit recorded sales of $3.76 billion, up 12%. Sales of Oncology declined 5% to $2.89 billion.

Primary Care

In Primary Care, direct sales and alliance revenues from Comirnaty were $1.31 billion in the quarter, down 70% year over year. Comirnaty sales declined 66% in the United States due to lower contracted deliveries to the U.S. government.

Comirnaty sales declined 79% outside U.S. markets due to lower demand and contracted deliveries in anticipation of transition to commercial markets as well as for new variant vaccines. Comirnaty sales missed our estimate of $1.79 billion.

Paxlovid contributed $202 million to sales in the quarter, compared with $7.5 billion in the year-ago quarter. Paxlovid sales missed our estimate of $614.9 million. There were no Paxlovid sales in the United States in the third quarter in anticipation of commercial transition. Lower contractual deliveries in most international markets also hurt sales.

Alliance revenues and direct sales from Eliquis rose 3% to $1.5 billion. Alliance revenues from Eliquis missed the Zacks Consensus Estimate of $1.52 billion but came in line with our model estimate.

Global Prevnar family revenues rose 15% to $1.85 billion. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult and pediatric). Prevnar revenues beat the Zacks Consensus Estimate of $1.69 billion as well as our model estimate of $1.71 billion.

Prevnar sales rose 20% in the United States, primarily driven by strong patient demand for Prevnar 20 for adults and the U.S. approval of Prevnar 20 for the pediatric patient population and associated stocking. Prevnar sales rose 5% in international markets, driven by the growth of Prevenar 13 for pediatric patients in certain emerging markets. However, the company witnessed lower market share for Prevnar (pediatric) in the United States due to competitive pressure.

Newly acquired product Nurtec ODT/Vydura contributed $233 million in the third quarter compared with $247 million in the previous quarter. Nurtec ODT/Vydura was added to Pfizer’s portfolio with the acquisition of most of Biohaven in 2022.

Among the new products, Pfizer’s RSV vaccine, Abrysvo, recorded sales of $375 million in the quarter. Abrysvo sales were above management expectations, driven by demand as well as some stocking benefit. Abrysvo was approved to help protect older adults and infants through maternal immunization in the United States as well as EU in 2023.

Specialty Care

Rare disease drug, Vyndaqel/Vyndamax recorded sales of $892 million in the quarter, up 47% year over year, driven by continued strong uptake of transthyretin amyloid cardiomyopathy indication, primarily in the United States and developed Europe. Vyndaqel/Vyndamax sales beat the Zacks Consensus Estimate of $815.0 million as well as our model 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 model estimate of $454.3 million.

Enbrel revenues declined 7% to $208 million due to continued biosimilar competition in key European markets and Japan.

New product, Oxbryta, generated sales of $85 million in the third quarter of 2023 compared with $77 million in the previous quarter. Oxbryta was added with the October 2022 acquisition of Global Blood Therapeutics.

The new drug Cibinqo, approved last year, recorded revenues of $37 million in the third quarter compared with $38 million in the year-ago quarter.


In Oncology, Ibrance revenues declined 3% year over year to $1.24 billion. Ibrance demand trends are being hurt globally due to competitive pressure. Ibrance revenues missed the Zacks Consensus Estimate as well as our estimate of $1.26 billion.

Xtandi recorded alliance revenues of $313 million in the quarter, down 2% year over year. Inlyta revenues were $252 million in the quarter, up 1%.

2023 Guidance

On Oct 13, Pfizer slashed its revenue guidance for 2023 due to lower-than-expected demand for Comirnaty and Paxlovid. The revenue guidance was lowered from $67.0 to $70.0 billion to $58.0 to $61.0 billion. Pfizer maintained this guidance along with the earnings release. The $58.0 to $61.0 billion guidance range indicates a year-over-year decline in the range of 39 and an operational decline in the range of 38.

The guidance cut included a $7 billion drop in Paxlovid revenues and a $2 billion reduction in Comirnaty revenues. The earlier revenue guidance included approximately $13.5 billion in sales from Comirnaty and Paxlovid sales of approximately $8 billion. Full-year 2023 combined revenues of Paxlovid and Comirnaty are now expected to be approximately $12.5 billion compared with $21.5 billion expected previously. Comirnaty revenues are expected to be approximately $11.5 billion in 2023, down 70% from 2022 levels, while Paxlovid sales are expected to be about $1 billion, down 95% from 2022 levels.

Pfizer reduced its 2023 outlook for Paxlovid due to the $4.2 billion non-cash revenue reversal for the return of an estimated 7.9 million of U.S.-government EUA-labeled treatment courses of Paxlovid at the end of 2023. The Comirnaty guidance was lowered due to lower-than-expected vaccination rates.

Excluding COVID-19 products, Pfizer continues to expect its revenues to rise 6% to 8% on an operational basis in 2023 as sales from non-COVID drugs remain strong.

As a result of the lower-than-expected COVID revenues and the inventory write-offs, the adjusted EPS guidance was lowered from the range of $3.25 to $3.45 to $1.45 to $1.65 earlier this month. The new guidance range was maintained at the time of the earnings release. This guidance range indicates a reported decline in the range of 75 year over year and an operational decline in the range of 72.

Pfizer expects to launch both Comirnaty and Paxlovid in traditional commercial markets in the United States as government demand for the products declines. While the U.S. market for Comirnaty transitioned to commercially available products in September 2023, the commercial transition for Paxlovid is expected in November 2023.

With the demand for COVID products being lower than expected, Pfizer announced cost cuts, including layoffs, on Oct 13. The cost cuts are expected to deliver 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 realized in 2024.

Adjusted cost of sales, as a percentage of sales, is expected in the range of 41 of total revenues (previously 28). Research and development expense is expected in the range of $11.9 to $12.9 billion (previously $12.4-$13.4 billion). SI&A spending is expected in the range of $13.3 to $14.3 billion (previously $13.8-$14.8 billion). The SI&A and R&D guidance was lowered due to Pfizer’s expectation of $1.0 billion of cost savings in 2023.

Acquired IPR&D expenses are expected to be approximately $0.1 billion. The adjusted tax rate is expected to be approximately 12% in 2023 (previously 15%).

Adjusted other (income)/deductions are expected to be approximately $1.9 billion of income compared with the previous expectation of $1.5 billion of income.

Pipeline Update

Pfizer announced data from the 18- to 64-year-old cohort of the phase III study, evaluating its first-generation modFlu mRNA influenza vaccine candidate. The study met both primary endpoints by demonstrating non-inferiority and superiority to a licensed flu vaccine at the time of the primary analysis. Safety was similar to the standard flu vaccine. The antibody responses were significant for flu A-strains but weak for B-strains. Moreover, the vaccine efficacy was non-inferior at the end of season secondary endpoint analysis. Pfizer expects data from the 65+ old cohort by the end of 2023.

Progress on Seagen Acquisition

Pfizer offered to buy cancer drugmaker Seagen for $229 per share in cash or a total enterprise value of approximately $43 billion in March.

Seagen’s acquisition is expected to strengthen Pfizer’s portfolio of cancer drugs by adding a class of antibody-drug conjugates. Seagen currently markets four cancer drugs — Adcetris, Padcev, Tukysa and Tivdak. The Pfizer/Seagen transaction is expected to be closed in late 2023 or early 2024 subject to customary closing conditions, including clearance by the U.S. FTC. The shareholders of Seagen have already approved the deal. Earlier this month, Pfizer received unconditional antitrust clearance from the European Commission for the proposed acquisition.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -658.82% due to these changes.

VGM Scores

At this time, Pfizer has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Pfizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Pfizer belongs to the Zacks Large Cap Pharmaceuticals industry. Another stock from the same industry, Novartis (NVS), has gained 2.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.

Novartis reported revenues of $11.78 billion in the last reported quarter, representing a year-over-year change of -6.1%. EPS of $1.74 for the same period compares with $1.58 a year ago.

Novartis is expected to post earnings of $1.66 per share for the current quarter, representing a year-over-year change of +9.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Novartis. Also, the stock has a VGM Score of B.

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