Pfizer 2023 outlook disappoints as Covid business drops off

Pfizer Inc.’s 2023 forecasts fell short of analysts’ expectations on precipitously declining demand for its blockbuster Covid vaccines and Paxlovid treatment.

The company is predicting 2023 adjusted earnings between $3.25 and $3.45 a share, well below analysts average estimate of $4.31 a share. Revenue for the year will be in the range of $67 billion to $71 billion, Pfizer said in a statement. Analysts had expected $71.7 billion.

Pfizer’s Covid-19 vaccine Comirnaty and virus pill Paxlovid have been transformative for the company, contributing more than half of the company’s $100 billion in sales last year. The company has been messaging for months that it wouldn’t be able to keep the pace, sharing forecasts for growth outside of Covid. Still, the downturn in its Covid business was more stark than analysts had been expecting, putting pressure on the drugmaker to show other avenues for growth.

For 2023, Pfizer said it expects sales of around $13.5 billion for Comirnaty, down 64 per cent from the year before and below the $16 billion forecast by analysts. Its 2023 sales guidance for its Covid pill Paxlovid was $8 billion, down 58 per cent from the year prior and below the $9.2 billion expected by Wall Street.

For the fourth quarter, Pfizer’s adjusted profit was $1.14 a share, beating analysts’ expectations for earnings of $1.05. Sales were $24.3 billion, in line with Wall Street’s expectations for $24.2 billion.

Pfizer did say it expects its Covid business to grow again in 2024 after “reaching a low point in 2023” due to governments having substantial supply of the products already, thereby negating the need for further orders.

Pfizer’s expenses are expected to be far higher in 2023, said Bloomberg Intelligence analyst John Murphy. That’s due to spending on the launches of potential new products as well as the shift of its Covid products to the private insurance market in the US, he said. Those may end up being a worthwhile investments: “If they can use that big incremental expense to drive sustainable top-line growth around that level of 7 per cent to 9 per cent this year, then many would view that incremental spend as justified,” Murphy said.

For its part, Pfizer has been clear that it’s looking ahead to find growth post-Covid. Last year “was a record-breaking year for Pfizer”, CEO Albert Bourla said in an earnings statement. “As proud as we are about what we have accomplished, our focus is always on what is next.”