Pfizer covid product sales fall more than expected

Pfizer and other drug and medical device giants play outsized role in Irish economy.

Pfizer has said that it will launch a cost-cutting programme if demand for its covid  products keeps underperforming expectations this autumn, the US drugmaker giant has said, after quarterly sales for the vaccine and pill fell short of analysts' targets.

Pfizer and other drug giants based here play an outsized part in the Irish economy, with medical and pharma exports accounting for around 40% by value of all Irish goods exported, and for a huge number of jobs. 

The company employs 5,000 people at major sites in west Dublin, Co Kildare, and Cork, including 820 jobs ay Ringaskiddy. Pfizer had as recently as late 2021 announced a project to expand its Dublin Grange Castle facility for a range of treatments. Grange Castle employs 2,210 people. 

However, all the pharma giants have been in the spotlight this year after a large slide in the value of their exports. Total pharma and medical exports in the first five months of the year fell to €30.6bn, down €5.5bn from the same period in 2022, according to Central Statistics Office figures.          

Pfizer in its latest earnings report said it expects 2023 to be a low point for covid product sales following strong demand at the peak of the pandemic before a potential return to growth in 2024.

"Clearly, there is a higher level of uncertainty regarding the demand projections for our covid-19 products than for the rest of the business," chief executive Albert Bourla said.

Sales of Comirnaty, the vaccine brand name, declined 83% to $1.49bn (€1.35bn) in the second quarter and antiviral treatment Paxlovid revenue tumbled 98% to $143m. However, the company maintained its forecast for annual covid revenues at about $21.5bn. 

Second-quarter revenue of $12.7bn fell 54% from a year ago, which Pfizer attributed to fading covid demand. Other top sellers like blood-thinner Eliquis and pneumococcal vaccine Prevnar also missed analysts’ estimates for the quarter. 

Revenue forecast

Pfizer also trimmed the upper end of its annual revenue forecast by $1bn to $70bn while retaining the low end at $67bn. Pfizer is also preparing for declining revenues in coming years as some of its top-selling drugs are soon set to face competition from cheaper generic treatments.

The company has responded through billion-dollar acquisitions, headlined by the $43bn deal for cancer-therapy specialist Seagen, as well stepped up spending on research and development. Total revenue for the second quarter fell 54% to $12.73bn. 

The company’s shares have fallen by nearly a third over the past year, far more than any of its industry rivals. While second-quarter sales missed Wall Street estimates, earnings of 67 cents a share beat analysts expectations of 58 cents.

JP Morgan analyst Chris Schott doesn’t expect the shares to fall much from here, but also doesn’t “see a clear path for shares to recover given continued uncertainty surrounding the company’s covid franchise and the recent setback for the company’s once-daily oral GLP-1”, a weight-loss product that may struggle to keep up with rivals.

Additional reporting Reuters and Bloomberg