Pfizer’s 2022 outlook falls short of Wall Street’s lofty expectations

Pfizer’s full-year outlook has fallen short of Wall Street’s bullish expectations, sparking a sell-off in shares of the drugmaker that has been at the forefront of developing Covid-19 vaccines and treatment.

The US company said it expected to generate record revenues of between $98bn and $102bn this year, driven by $32bn sales of its Covid-19 vaccine and $22bn in sales of its antiviral pill. This missed consensus forecasts of $103.2bn, according to FactSet, with analysts expecting vaccine sales of $34bn in 2022.

Pfizer forecast earnings of $6.35 to $6.55 per share in 2022, below consensus forecasts of $6.71 per share when adjusted for acquisition-related costs and other significant items.

Pfizer shares fell as much as 7 per cent on Tuesday before trimming some losses as investors looked beyond the company’s better than expected fourth-quarter profits.

Analysts said the outlook highlighted the significant challenge Pfizer faces in meeting lofty growth expectations, with some experts predicting the pandemic has peaked.

Kevin Gade, portfolio manager at Bahl & Gaynor, said the missed guidance on Covid-19 products sales may reflect a conservative steer from Pfizer, as it tends to guide numbers on doses it has already contracted to sell. But it could also reflect that the pandemic had peaked and demand may be lower in the future for vaccines and boosters, he added.

“We applaud Pfizer for winning Covid, but can they take the dollars from here and improve the base business?” he said.

Pfizer has dominated the coronavirus vaccine market, with the messenger RNA jab that it developed with BioNTech grabbing 70 per cent market share in the US and EU. Its antiviral pill Paxlovid — a five-day oral treatment that significantly reduces the risk of death and hospitalisation from coronavirus — is now poised to become the top-selling Covid-19 treatment.

This success has transformed the company, boosting the share price more than 50 per cent over the past year and helping Pfizer pivot to become a science-driven drug development group. But with several high-profile drugs due to lose exclusivity in coming years, Pfizer faces a challenge to continue growing when Covid-related product sales begin to fade.

Albert Bourla, Pfizer’s chief executive, said the company would use the cash windfall from its Covid-19 treatments to pursue business development opportunities that could add at least $25bn in revenues to the company by 2030.

“We are going to intensify a lot our activity in that area . . . We think that now is the time science is at the state that you can find enough targets to be able to add value.”

Last year, Pfizer revised sales of its Covid-19 jab higher on several occasions due to surging global demand. But the company cautioned there was “less potential upside” to vaccine guidance in 2022, because far more people had been vaccinated by now.

However, Bourla said that sales of the company’s antiviral pill Paxlovid could be “way bigger” than forecast this year depending on how talks proceeded with more than 100 governments. Pfizer had capacity to make more than the 120mn courses of the drug planned for this year if there was demand, he added.

Pfizer said it was working on a “next-generation” antiviral pill that would counter potential drug resistance and would not need to be taken with ritonavir — a generic HIV medication that can interfere with other medications. Its Paxlovid pill needs to be taken with ritonavir, making the treatment unsuitable for some people with pre-existing medical conditions. Human trials on the new pill are expected to begin in the second half of the year.

Pfizer reported adjusted earnings of $1.08 per share for the fourth quarter, ahead of forecasts of 87 cents. Revenues of $23.8bn were slightly below forecasts of $24.2bn.

The company reported $81.3bn in revenue in 2021, up 95 per cent from the previous year.