Pfizer on Wednesday upped the target for its cost-cutting program, revealing the additional spending cuts alongside a sales forecast for 2024 that disappointed Wall Street analysts and sent shares down to their lowest levels in more than a decade.
Pfizer said it now aims to save $4 billion by the end of next year, $500 million more than what the company had announced in October. On a conference call, executives didn’t outline specific cost-cutting measures, such as layoffs. But they did state that 70% of the savings will come from research and development and the remainder from selling, informational and administrative functions.
The company is also forecasting between $58.5 billion and $61.5 billion in total revenue for 2024, similar to what it’s projecting in 2023 and well off the record numbers it brought in during the COVID-19 pandemic.
Earnings per share also missed expectations, with the company projecting anywhere from $2.05 to $2.25 apiece, far below consensus estimates of $3.13.
The main culprit for Pfizer’s lagging sales numbers is the sharp decline in demand for its COVID vaccine Comirnaty and the antiviral treatment Paxlovid. Already, slowing sales led Pfizer in October to cut its overall guidance by $9 billion.
On Thursday, Pfizer downgraded its expectations even further. The company now expects its COVID products to generate $8 billion in 2024, far less than the $12.5 billion figure analysts had penciled in. That projection is “realistic and conservative,” CEO Albert Bourla said in a conference call with analysts.
David Denton, Pfizer’s chief financial officer, noted the company set its sales forecast for Comirnaty below assumed vaccination rates in 2024, given “there is inherent variability in that portfolio of products.”
“Therefore, if there is an upside [to the guidance], you can think about it in those set of sets of products,” Denton said.
Pfizer is looking to its $43 billion buyout of Seagen, expected to close Thursday, to keep its revenue from falling further. The company expects the deal to add $3 billion to its top line next year and drive growth beyond that.
To help, the company is creating a dedicated oncology business unit that will handle everything from early development and research collaborations to the commercialization of approved products. It will be run by Chris Boshoff, currently the company’s head of oncology R&D.
The company is also changing the leadership of its commercial team, with Angela Hwang stepping down as chief commercial officer. She’ll be replaced by Aamir Malik in the U.S. and Alexandre de Germay internationally.
Bourla also told analysts that the company won’t release an interim look at results from a pivotal study of its gene therapy for Duchenne muscular dystrophy, a potential rival to Sarepta Therapeutics’ Elevidys. An interim check had been expected by the end of 2023. But delaying the readout will give “more opportunity for the product to be successful,” Bourla said.
Pfizer’s shares sank more than 7% on Wednesday morning, to trade at less than $27 apiece.
