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Pfizer, Inc. (PFE - Free Report) reported second-quarter 2022 adjusted earnings per share of $2.04, which beat the Zacks Consensus Estimate of $1.75 per share. Earnings rose 92% year over year.
Revenues came in at $27.7 billion, which beat the Zacks Consensus Estimate of $26.3 billion. Sales rose 47% from the year-ago quarter on a reported basis, reflecting operational growth of 53% and currency headwinds of 7%. The top-line growth was mainly driven by direct sales and alliance revenues from its partner, BioNTech (BNTX - Free Report) for the COVID-19 vaccine, Comirnaty and revenues from Pfizer’s oral antiviral pill for COVID, Paxlovid.
Excluding revenues from Pfizer/BioNTech’s Comirnaty and Paxlovid, sales rose 1% operationally. Higher sales of brands like Eliquis and Vyndaqel/Vyndamax globally and improved Prevnar vaccine sales in the United States were partially offset by weaker sales of Chantix globally, Xeljanz in the United States and Sutent globally.
International revenues rose 56% to $16.52 billion. U.S. revenues rose 49% to $11.2 billion.
Adjusted selling, informational and administrative (SI&A) expenses rose 1% (operationally) in the quarter to $2.9 billion. Adjusted R&D expenses rose 27% to $2.8 billion due to costs related to several late-stage pipeline medicines and the development of COVID-19 treatment programs.
Segment Discussion
Oncology revenues increased 1% (on an operational basis) to $3.09 billion. Vaccine revenues were $10.46 billion, up 20% from the year-ago quarter. Internal Medicine rose 5% to $2.41 billion. The Inflammation & Immunology franchise declined 14% to $850 million. The portfolio of Rare Disease rose 7% to $909 million. The Hospital sub-segment’s sales were $9.71 billion compared with $1.75 billion in the year-ago quarter.
Sales of Key Drugs
Direct sales and alliance revenues from BioNTech for Comirnaty were $8.85 billion in the quarter, up 20% year over year, driven by strong growth in international markets, which offset the slower pace of deliveries in the United States.
Paxlovid contributed $8.1 billion to sales in the second quarter, much higher than $1.47 billion in the first quarter, backed by launches in several countries in 2022. Demand for this medicine has risen in the United States as well as some other countries recently due to rise in infections.
In Oncology, Ibrance revenues declined 3% year over year to $1.32 billion. However, sales improved in the United States, rising 1% in the quarter.
Xtandi recorded alliance revenues of $290 million in the quarter, down 4% year over year. Inlyta revenues were $274 million in the quarter, up 11%. Sutent sales declined 47% to $97 million due to the loss of patent exclusivity in the United States in August 2021 and Europe in January 2022.
In Vaccines, Global Prevnar family revenues rose 18% to $1.43 billion. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult).
Prevnar sales rose 41% in the United States due to strong stocking and increasing demand for Prevnar 20 for the adult indication, which offset the unfavorable timing of purchases of Prevnar 13 for the pediatric indication. Prevnar revenues declined 7% in international markets.
In Internal Medicine, alliance revenues from Bristol-Myers (BMY - Free Report) for Eliquis and direct sales rose 23% to $1.75 billion. Continued increased adoption in nonvalvular atrial fibrillation as well as oral anticoagulant market share gains benefited alliance revenues from Bristol-Myers for Eliquis sales in the quarter.
Rare disease drug Vyndaqel/Vyndamax recorded sales of $552 million in the quarter, up 16% year over year.
In Inflammation & Immunology, Xeljanz sales declined 24% to $430 million. Sales declined 35% in the United States due to lower prescription volumes as doctors’ prescribing patterns shifted away from JAK inhibitors following label warnings. In addition, unfavorable wholesaler inventory buying patterns and lower prices in the United States hurt sales.
Enbrel revenues declined 1% to $257 million due to continued biosimilar competition in key European markets and Japan. Pfizer has exclusive rights to Amgen’s (AMGN - Free Report) blockbuster RA drug, Enbrel, outside the United States and Canada.
Amgen markets Enbrel in North America. Enbrel is Amgen’s largest product, accounting for 21% of product sales.
Total biosimilar revenues were $580 million, up 7% year over year. Sterile injectables global revenues declined 5% operationally to $1.29 billion.
2022 Guidance
Pfizer maintained its previously issued sales guidance for 2022 while raising the lower end of its earnings per share expectations.
Revenues are still expected in the range of $98.0 billion to $102.0 billion. The mid-point of the revenue guidance indicates operational growth of 29% from the 2021 levels.
The revenue guidance includes approximately $32.0 billion in sales from Comirnaty and $22 billion from Paxlovid, the same as the previous expectations. The guidance for Comirnaty and Paxlovid reflects doses/treatment courses to be delivered under supply contracts signed as of mid-Jul 2022.
Adjusted earnings per share are expected to be in the range of $6.30 to $6.45 compared with the prior expectation of $6.25 to $6.45. The mid-point of the earnings guidance indicates a 65% increase over the 2021 actual results.
Adjusted cost of sales, as a percentage of sales, is expected in the range of 32%-34% (maintained). Research and development expense is expected in the range of $11.5-$12.0 billion versus $11.0-$12.0 billion previously. SI&A spending is expected in the range of $12.2-$13.2 billion versus $12.5-$13.5 billion previously. Acquired IPR&D expenses are expected to be approximately $0.9 billion. The adjusted tax rate is expected to be approximately 15.5% (previously 16%) in 2022.
Our Take
Pfizer’s second-quarter results were better than expected as it beat estimates for both earnings and sales. Pfizer maintained its previously issued sales guidance for 2022 as well as its forecast for Comirnaty and Paxlovid. Pfizer’s better expectations for operational growth were offset by incremental potential headwinds from currency impact, forcing management to keep the 2022 sales guidance intact.
However, the company lifted the lower end of its adjusted earnings per share guidance
The stock was up 1.2% in pre-market trading. This year so far, Pfizer’s stock has declined 12% against an increase of 9.2% for the industry.
Image Source: Zacks Investment Research
We believe that no company is as strongly placed in the COVID vaccines/treatment market as Pfizer right now. The vaccine, together with the Paxlovid pill, is expected to generate a combined $54 billion in sales in 2022 out of Pfizer’s total revenue expectations of slightly more than $100 billion. However, there do remain concerns about Pfizer’s top-line drivers beyond its COVID products in the future due to increased competitive pressure.
Image: Bigstock
Pfizer (PFE) Q2 Earnings Top, COVID Products Drive Sales
Pfizer, Inc. (PFE - Free Report) reported second-quarter 2022 adjusted earnings per share of $2.04, which beat the Zacks Consensus Estimate of $1.75 per share. Earnings rose 92% year over year.
Revenues came in at $27.7 billion, which beat the Zacks Consensus Estimate of $26.3 billion. Sales rose 47% from the year-ago quarter on a reported basis, reflecting operational growth of 53% and currency headwinds of 7%. The top-line growth was mainly driven by direct sales and alliance revenues from its partner, BioNTech (BNTX - Free Report) for the COVID-19 vaccine, Comirnaty and revenues from Pfizer’s oral antiviral pill for COVID, Paxlovid.
Excluding revenues from Pfizer/BioNTech’s Comirnaty and Paxlovid, sales rose 1% operationally. Higher sales of brands like Eliquis and Vyndaqel/Vyndamax globally and improved Prevnar vaccine sales in the United States were partially offset by weaker sales of Chantix globally, Xeljanz in the United States and Sutent globally.
International revenues rose 56% to $16.52 billion. U.S. revenues rose 49% to $11.2 billion.
Adjusted selling, informational and administrative (SI&A) expenses rose 1% (operationally) in the quarter to $2.9 billion. Adjusted R&D expenses rose 27% to $2.8 billion due to costs related to several late-stage pipeline medicines and the development of COVID-19 treatment programs.
Segment Discussion
Oncology revenues increased 1% (on an operational basis) to $3.09 billion. Vaccine revenues were $10.46 billion, up 20% from the year-ago quarter. Internal Medicine rose 5% to $2.41 billion. The Inflammation & Immunology franchise declined 14% to $850 million. The portfolio of Rare Disease rose 7% to $909 million. The Hospital sub-segment’s sales were $9.71 billion compared with $1.75 billion in the year-ago quarter.
Sales of Key Drugs
Direct sales and alliance revenues from BioNTech for Comirnaty were $8.85 billion in the quarter, up 20% year over year, driven by strong growth in international markets, which offset the slower pace of deliveries in the United States.
Paxlovid contributed $8.1 billion to sales in the second quarter, much higher than $1.47 billion in the first quarter, backed by launches in several countries in 2022. Demand for this medicine has risen in the United States as well as some other countries recently due to rise in infections.
In Oncology, Ibrance revenues declined 3% year over year to $1.32 billion. However, sales improved in the United States, rising 1% in the quarter.
Xtandi recorded alliance revenues of $290 million in the quarter, down 4% year over year. Inlyta revenues were $274 million in the quarter, up 11%. Sutent sales declined 47% to $97 million due to the loss of patent exclusivity in the United States in August 2021 and Europe in January 2022.
In Vaccines, Global Prevnar family revenues rose 18% to $1.43 billion. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult).
Prevnar sales rose 41% in the United States due to strong stocking and increasing demand for Prevnar 20 for the adult indication, which offset the unfavorable timing of purchases of Prevnar 13 for the pediatric indication. Prevnar revenues declined 7% in international markets.
In Internal Medicine, alliance revenues from Bristol-Myers (BMY - Free Report) for Eliquis and direct sales rose 23% to $1.75 billion. Continued increased adoption in nonvalvular atrial fibrillation as well as oral anticoagulant market share gains benefited alliance revenues from Bristol-Myers for Eliquis sales in the quarter.
Rare disease drug Vyndaqel/Vyndamax recorded sales of $552 million in the quarter, up 16% year over year.
In Inflammation & Immunology, Xeljanz sales declined 24% to $430 million. Sales declined 35% in the United States due to lower prescription volumes as doctors’ prescribing patterns shifted away from JAK inhibitors following label warnings. In addition, unfavorable wholesaler inventory buying patterns and lower prices in the United States hurt sales.
Enbrel revenues declined 1% to $257 million due to continued biosimilar competition in key European markets and Japan. Pfizer has exclusive rights to Amgen’s (AMGN - Free Report) blockbuster RA drug, Enbrel, outside the United States and Canada.
Amgen markets Enbrel in North America. Enbrel is Amgen’s largest product, accounting for 21% of product sales.
Total biosimilar revenues were $580 million, up 7% year over year. Sterile injectables global revenues declined 5% operationally to $1.29 billion.
2022 Guidance
Pfizer maintained its previously issued sales guidance for 2022 while raising the lower end of its earnings per share expectations.
Revenues are still expected in the range of $98.0 billion to $102.0 billion. The mid-point of the revenue guidance indicates operational growth of 29% from the 2021 levels.
The revenue guidance includes approximately $32.0 billion in sales from Comirnaty and $22 billion from Paxlovid, the same as the previous expectations. The guidance for Comirnaty and Paxlovid reflects doses/treatment courses to be delivered under supply contracts signed as of mid-Jul 2022.
Adjusted earnings per share are expected to be in the range of $6.30 to $6.45 compared with the prior expectation of $6.25 to $6.45. The mid-point of the earnings guidance indicates a 65% increase over the 2021 actual results.
Adjusted cost of sales, as a percentage of sales, is expected in the range of 32%-34% (maintained). Research and development expense is expected in the range of $11.5-$12.0 billion versus $11.0-$12.0 billion previously. SI&A spending is expected in the range of $12.2-$13.2 billion versus $12.5-$13.5 billion previously. Acquired IPR&D expenses are expected to be approximately $0.9 billion. The adjusted tax rate is expected to be approximately 15.5% (previously 16%) in 2022.
Our Take
Pfizer’s second-quarter results were better than expected as it beat estimates for both earnings and sales. Pfizer maintained its previously issued sales guidance for 2022 as well as its forecast for Comirnaty and Paxlovid. Pfizer’s better expectations for operational growth were offset by incremental potential headwinds from currency impact, forcing management to keep the 2022 sales guidance intact.
However, the company lifted the lower end of its adjusted earnings per share guidance
The stock was up 1.2% in pre-market trading. This year so far, Pfizer’s stock has declined 12% against an increase of 9.2% for the industry.
Image Source: Zacks Investment Research
We believe that no company is as strongly placed in the COVID vaccines/treatment market as Pfizer right now. The vaccine, together with the Paxlovid pill, is expected to generate a combined $54 billion in sales in 2022 out of Pfizer’s total revenue expectations of slightly more than $100 billion. However, there do remain concerns about Pfizer’s top-line drivers beyond its COVID products in the future due to increased competitive pressure.
Pfizer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pfizer Inc. Price, Consensus and EPS Surprise
Pfizer Inc. price-consensus-eps-surprise-chart | Pfizer Inc. Quote