Pfizer shares sink after it resets 2024 COVID expectations

Pfizer on Wednesday forecast 2024 sales that could be as much as $5 billion below Wall Street expectations, a move top executives said provided a more reliable view of its COVID-19 business than it had this year, driving shares down 9% to a 10-year low.

Pfizer’s COVID-19 vaccines and treatments revenues, which peaked at $57 billion, are now expected to be $8 billion in 2024. That compares to the $13 billion analysts had foreseen and is down from Pfizer’s lowered forecast for $12.5 billion in 2023.

“We want to be conservative,” Pfizer Chief Executive Officer Albert Bourla said on a conference call with investors. “We want to be reliable so we won’t create uncertainty (again), which was the case, unfortunately, this year.”

It also forecast 2024 adjusted profit in the range of $2.05 to $2.25 per share, lower than analysts’ expectation of $3.16.

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The drugmaker’s shares, already down over 44% this so far this year, fell 8.7% in morning trading and were set to erase over $14 billion in market capitalization, if losses continued through the day.

Shares of Moderna and Pfizer’s German partner in the vaccine, BioNTech SE, fell 5% each.

The lower forecasts come a day after the drugmaker said it would reorganize its cancer division to include the acquisition of Seagen. It also raised its cost-cut target by $500 million on Wednesday.

The U.S. drugmaker expects annual revenue in the range of $58.5 billion to $61.5 billion, compared with analysts’ average estimate of $63.17 billion, according to LSEG data.

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The COVID-19 vaccine and antiviral pill Paxlovid helped Pfizer bring in over $100 billion in revenue in 2022. Pfizer had originally forecast sales of $21.5 million in COVID sales for 2023, but had to cut that forecast by more than 40% to around $12.5 billion.

The COVID-19 sales targets “likely represent a floor for 2024 sales,” said J.P. Morgan analyst Chris Schott.

The drop in COVID product sales had also forced Pfizer to launch a program to cut jobs and expenses, which is now expected to save at least $4 billion a year by the end of 2024.

Pfizer had said on Tuesday that Chief Commercial Officer Angela Hwang would step down, and the company would reorganize its commercial business, not including oncology, into two divisions, one focused on the United States and the other on the rest of the world.

Pfizer’s $43 billion deal for cancer drugmaker Seagen, which is expected to close on Thursday, is expected to add $3.1 billion to revenue next year.

Citi analyst Andrew Baum said that Pfizer’s management is acting with increasing urgency to address its weak stock performance. However, the absence of promising high-potential pipeline assets makes it difficult for the company as several Pfizer products are expected to go off patent in the next few years.