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Pfizer (PFE) Q4 Earnings Top, 2023 View Disappoints, Stock Down

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Pfizer (PFE - Free Report) reported fourth-quarter 2022 adjusted earnings per share of $1.14, which significantly beat the Zacks Consensus Estimate of $1.03 per share as well as our estimate of $1.01 per share. Earnings rose 45% year over year.

Revenues came in at $24.3 billion, which slightly beat the Zacks Consensus Estimate of $24.20 billion. Sales rose 2% from the year-ago quarter on a reported basis, reflecting an operational increase of 13% and currency headwinds of 11%. More than half of Pfizer’s revenues comprised directsales 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 5% operationally. Higher sales of key brands like Vyndaqel/Vyndamax, globally and Eliquis and Prevnar family in the United States were partially offset by weaker sales of Xeljanz and Ibrance globally.

International revenues rose 14% to $15.81 billion. U.S. revenues rose 10% to $8.48 billion.

Adjusted selling, informational and administrative (SI&A) expenses rose 17% (operationally) in the quarter to $4.41 billion due to increased spending for Paxlovid and Comirnaty and new products. Adjusted R&D expenses rose 7% to $3.61 billion due to costs related to oncology and non-COVID-19 vaccine programs and costs to develop recently acquired programs.

Segment Discussion

Beginning the third quarter of 2022, Pfizer has started reporting its revenues under three broad sub-segments of its Biopharma operating segment, Primary Care, Specialty Care and Oncology. Sales in the Primary Care segment rose 20% operationally to $17.35 billion. The Specialty Care unit recorded sales of $3.6 billion, down 3%. Sales of Oncology declined 3% to $3.0 billion.

Primary Care

In Primary Care, direct sales and alliance revenues from BioNTech for Comirnaty were $11.33 billion in the quarter, up 3% year over year. Comirnaty sales rose 15% in the United States due to deliveries of the Omicron BA.4/BA.5-adapted bivalent booster. Comirnaty sales rose 1% outside U.S. markets. Pfizer witnessed lower demand for Comirnaty in emerging markets. Comirnaty sales were significantly better than our estimate of $7.57 billion.

Paxlovid contributed $1.83 billion to sales in the fourth quarter, compared with $7.5 billion in the previous quarter. Paxlovid sales significantly missed our estimate of $4.959 billion for the drug.

Alliance revenues from Bristol-Myers (BMY - Free Report) for Eliquis and direct sales rose 5% to $1.48 billion. Continued oral anti-coagulant adoption and market share gains in non-valvular atrial fibrillation benefited alliance revenues from Bristol-Myers for Eliquis sales in the United States. However, growth in the United States was offset by declines in certain emerging markets.

Global Prevnar family revenues rose 40% to $1.74 billion. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult). Prevnarrevenues beat the Zacks Consensus Estimate of $1.57 billion.

Prevnar sales rose 79% in the United States due to strong demand for Prevnar 20 for the adult indication and favorable timing of government purchases for the pediatric indication. Prevnar revenues rose 10% in international markets.

Specialty Care

Rare disease drug, Vyndaqel/Vyndamax recorded sales of $680 million in the quarter, up 31% year over year and better than the Zacks Consensus Estimate of $633 million.

Xeljanz sales declined 28% to $493 million due to lower prices and prescription volumes as doctors’ prescribing patterns shifted away from JAK inhibitors following label warnings.

Enbrel revenues declined 8% to $236 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 around 18% of product sales.


In Oncology, Ibrance revenues declined 4% year over year to $1.28 billion due to planned price decreases in some international developed markets and a continued increase in the proportion of patients accessing Ibrance through the U.S. Patient Assistance Program. Sales missed the Zacks Consensus Estimate of $1.29 billion.

Xtandi recorded alliance revenues of $320 million in the quarter, up 5% year over year. Inlyta revenues were $243 million in the quarter, down 2%.

Full-Year 2022 Results

Full-year 2022 sales rose 23% to $100.3 billion, beating the Zacks Consensus Estimate of $100.24 billion. Sales beat the guided range of $99.5 to $102.0 billion. On an operational basis, sales rose 30% in the year. Excluding COVID-19 products, Paxlovid and Comirnaty, revenues grew 2% operationally.

Adjusted earnings for 2022 were $6.58 per share, 62% year over year. Earnings beat the Zacks Consensus Estimate of $6.47 per share as well as the guided range of $6.40 to $6.50.

2023 Guidance

Pfizer issued its financial guidance for 2023.

Revenues are expected in the range of $67.0 to $71.0 billion, indicating an operational decline of 29%-33% from the 2022 level. Revenues were lower than the Zacks Consensus Estimate of $74.5 billion.

The revenue guidance includes approximately $13.5 billion in sales from Comirnaty, down 64% from the 2022 level and Paxlovid sales of approximately $8 billion, down 58%. Pfizer expects to launch both products in traditional commercial markets in the United States in the second half of 2023 as government demand for the products decline.

Adjusted earnings per share are expected to be in the range of $3.25 to $3.45, reflecting an operational decline of 48%-51% from the 2022 level. The Zacks Consensus Estimate for earnings is pegged at $4.41 per share.

Adjusted cost of sales, as a percentage of sales, is expected in the range of 28%-30%. Research and development expense is expected in the range of $12.4-$13.4 billion. SI&A spending is expected in the range of $13.8-$14.8 billion. Acquired IPR&D expenses are expected to be approximately $0.1 billion. The adjusted tax rate is expected to be approximately 15.0% in 2023.

Our Take

Pfizer’s fourth-quarter results were better than expected as it beat estimates for both earnings and sales. However, Pfizer’s 2023 outlook fell well below market expectations due to steep expected declines in revenues from its COVID-19 products on lower demand. Pfizer expects sales of its COVID products to reach the lowest point in 2023, before potentially rising again in 2024. Excluding COVID-19 products, Pfizer expects its revenues to rise 7% to 9% on an operational basis in 2023.

The expected decline in adjusted earnings is due to lower revenues from COVID products coupled with higher spending behind near-term launches and late-stage pipeline candidates. Albert Bourla, Pfizer’s chairman and chief executive officer, said that the company has the largest number of new product and indication launches planned for 2023.

The stock was down more than 2% in pre-market trading. In the past year, Pfizer’s stock has declined 17.4% against an increase of 9.7% for the industry.


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There are concerns about Pfizer’s long-term growth drivers beyond its COVID-related products due to competitive pressure and the receding impact of the pandemic.

Nonetheless, Pfizer is witnessing solid pipeline progress and expects to launch some key products in 2023 like its respiratory syncytial virus vaccine in older adults, etrasimod for ulcerative colitis, and its pentavalent meningococcal vaccine. All three products are under review in the United States and the EU. Pfizer acquired Biohaven and Global Blood Therapeutics in 2022, adding Nurtec ODT/Vydura for migraine and Oxbryta for haemolytic anaemia due to sickle cell disease, respectively, to Pfizer’s portfolio. Nurtec ODT/Vydura and Oxbryta generated sales of $211 million and $73 million, respectively, in the fourth quarter.

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 and EPS Surprise

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