On Tuesday, Wall Street issued a guidance well below consensus figures for fiscal 2023, softening investor expectations before Covid-19 expected a sharp drop in product sales.
Shares were down 3% in premarket trading.
The company said it expects Covid-19 vaccine sales to fall from $37.8 billion in 2022 to $13.5 billion in 2023.
(ticker: PFE) expects sales of the Covid-19 antiviral Paxlovid to fall to $8 billion in 2023 from $18.9 billion in 2022.
Based on those estimates,
It said total revenue would fall to $67 billion to $71 billion in 2023 from $100.3 billion in 2022, short of the FactSet consensus estimate of $72.9 billion. The company expects adjusted diluted earnings of between $3.25 and $3.45 per share in 2023, below the FactSet consensus estimate of $4.33.
“We expect 2023 to be a transition year in the U.S.,” CEO Albert Bourla said in a prepared statement on Tuesday for the company’s investor call on the Covid-19 vaccine market. “In 2022, we sold more doses than were ultimately used at pandemic prices. This has resulted in a government inventory build that we expect to be absorbed sometime in 2023 – probably in the second half.”
In detailed forecasts issued on Tuesday, Pfizer said it expects the Covid-19 vaccine to have about 64% market share in the US in 2023, with about 65 million doses. Pfizer said it expects the proportion of the US population receiving the Covid-19 vaccine to drop to 24% in 2023 from 31% in 2022.
The company also said that each vaccinated person will receive an average of 1.3 doses per year in 2023, up from 1.4 in 2022; The company attributes the decline to fewer people taking the two-dose core series.
“The decline in the company’s overall revenue is entirely attributable to our Covid products,” Pfizer Chief Financial Officer David Denton said in prepared statements. “While patient demand for our Covid products is expected to remain strong through 2023, most of that demand is expected to be met by products delivered to governments in 2022 and recorded as revenue last year.”
In a note published on Tuesday, Cantor Fitzgerald analyst Louise Chen wrote that investors expect the company to release below-consensus guidance. “We believe the release of the 2023 guidance was highly anticipated, which is why PFE shares were weak ahead of earnings,” Chen wrote.
The company reported fourth-quarter 2022 revenue of $24.3 billion, in line with FactSet’s consensus estimate of $24.4 billion. Adjusted diluted earnings for the fourth quarter were $1.14 per share, beating the FactSet consensus estimate of $1.05.
The company is hosting an investor call at 10 a.m. ET.
Johnson & Johnson
( JNJ ), Pfizer’s first major drug company to report earnings this season, beat Wall Street expectations for 2023 despite warnings earlier in the month.
Johnson & Johnson
‘s CEO said the broader economic picture remains uncertain.
The uncertainties for Pfizer extend beyond the broader economy. Like other firms that have seen revenue rise during the pandemic, Pfizer is poised to bottom out in 2023.
In a sign of continued demand for vaccines, the Food and Drug Administration announced last week that it plans to switch to an annual booster schedule, similar to the annual schedule for the flu shot. The agency’s advisers have voted to support a proposal to streamline current vaccination efforts by recommending that all Covid-19 vaccine doses administered in the United States use the same strain composition.
Also on the minds of investors are the looming patent cliff; Pfizer said it expects to lose $17 billion in annual revenue from patent expirations by 2030. The company has planned to more than cover these losses through a series of near-term launches and business developments.
For now, the market is not convinced. Pfizer shares trade at 10 times expected earnings over the next 12 months, well below peers such as Johnson & Johnson, which trade at 16 times earnings, and
(LLY), trades at 40 times earnings.
Pfizer shares are down 15% this year and 17.9% over the past 12 months on Tuesday.
Email Josh Nathan-Kazis at email@example.com