Switch from selling COVID-19 drugs on market rather than to governments continues to sting at Pfizer

Pfizer heads into 2024 with a lower-than-expected sales forecast for its COVID-19 vaccine and treatment after weaker demand had already forced it to trim 2023 projections.

The drugmaker announced on Wednesday initial expectations for the new year that include about $8 billion in combined sales from its Comirnaty vaccine and the treatment Paxlovid. That falls more than $5 billion short of estimates on Wall Street.

The company’s forecast for overall earnings and revenue next year also missed consensus. Pfizer shares continued their largely year-long slide in midday trading.

Pfizer leaders told analysts Wednesday that they expect vaccination and treatment rates to be about the same next year as they were in 2023. But they wanted to be conservative and offer a “good floor” for expectations to avoid creating any more uncertainty, CEO Albert Bourla said.

In mid-October, Pfizer said sales of both the vaccine and treatment were turning out weaker than expected. The company cut revenue projections for this year by $9 billion. Two weeks later, Pfizer said sales of the treatment and vaccine had slid 97% and 70%, respectively, in the third quarter.

Comirnaty and Paxlovid combined to rake in more than $56 billion in sales last year, easily making them Pfizer's two top-selling products.

But a down year for both was widely expected as demand slid and drugmakers switched to selling on the commercial market instead relying on the more stable payout of bulk government contracts.

Bourla also noted Wednesday in a call with analysts that the virus that triggered a global pandemic in 2020 is no longer “top of mind,” and that there’s some COVID-19 fatigue and anti-vaccine rhetoric in the market.

Chief Financial Officer David Denton also called the virus unpredictable and said it was hard to model its performance. Even so, he said Pfizer expects both the market-leading treatment and vaccine to remain significant products.

“They meet a very large and high unmet need of the patient population around the globe,” he said.

The company said that it expects full-year revenue in 2024 of between $58.5 billion and $61.5 billion, short of the $62.7 billion that Wall Street was expecting, according to a survey of industry analysts by FactSet.

The New York drugmaker expects to post per-share earnings of between $2.05 and $2.25 next year. Wall Street was projecting earnings of around $3.17 per share.

Pfizer also said that it was expanding its cost-cutting program by $500 million. Company leaders noted that recently acquired cancer treatment developer Seagen will start contributing revenue in the new year.

The company said it had no plans to cut its quarterly dividend which now totals 41 cents per share.

Shares of Pfizer Inc. slid more than 8% to $26.12 in late-morning trading while broader indexes climbed.

The stock had already already shed more than 44% of its value so far this year.