Tuesday presented guidance for fiscal year 2023 well below Wall Street consensus figures, tempering investor expectations ahead of what it expects to be a sharp drop in sales of Covid-19 products.
Shares fell 3% in premarket trading on pessimistic forecasts.
The company said it expects Covid-19 vaccine sales to fall to $13.5 billion in 2023 from $37.8 billion in 2022.
(ticker: PFE) expects sales of Paxlovid, its Covid-19 antiviral, to fall to $8 billion in 2023 from $18.9 billion in 2022.
Based on these estimates,
said it expects total revenue of between $67 billion and $71 billion in 2023, up from $100.3 billion in 2022, and below FactSet’s consensus estimate of $72.9 billion . The company expects adjusted diluted earnings of between $3.25 and $3.45 per share in 2023, well below FactSet’s consensus estimate of $4.33.
“We expect 2023 to be a year of transition in the United States,” CEO Albert Bourla said in prepared remarks for the company’s investor call on Tuesday, talking about the Covid-19 vaccine market. “In 2022, we sold at pandemic prices more doses than those finally used. This has resulted in a build up of government inventories which we expect to be absorbed sometime in 2023, likely in the second half of the year.
In detailed projections released Tuesday, Pfizer said it expects its Covid-19 vaccine to have about 64% market share in the United States in 2023, or about 65 million doses. Pfizer said it expects the proportion of the US population receiving Covid-19 vaccines in 2023 to fall to 24%, from 31% in 2022.
The company also said it expects each vaccinated person to receive 1.3 doses per year, on average, in 2023, up from 1.4 in 2022; the company attributes this decrease to fewer people receiving the two-dose primary series.
“The total decline in company revenue is entirely due to our Covid products,” Pfizer Chief Financial Officer David Denton said in prepared remarks. “While patient demand for our Covid products is expected to remain strong through 2023, much of this demand is expected to be met by products that were delivered to governments in 2022 and recorded as revenue last year.”
In a note on Tuesday, Cantor Fitzgerald analyst Louise Chen wrote that investors expected the company to issue a forecast below consensus. “We believe the failure of the 2023 guide was widely anticipated, which is why PFE shares were weak ahead of earnings,” Chen wrote.
The company reported fourth-quarter 2022 revenue of $24.3 billion, roughly matching FactSet’s consensus estimate of $24.4 billion. Adjusted diluted earnings for the fourth quarter were $1.14 per share, beating FactSet’s consensus estimate of $1.05.
The company is hosting an investor call at 10 a.m. Eastern Time.
Johnson & Johnson
(JNJ), the first of Pfizer’s big pharma peers to report earnings this season, guided above Wall Street expectations for 2023, despite warnings issued earlier in the month by
Johnson & Johnson
‘s CEO that the broader economic situation remains uncertain.
For Pfizer, the uncertainties go beyond the broader economy. Like other companies that have seen revenue surge during the pandemic, Pfizer is preparing for a decline in revenue in 2023.
In a sign of continued demand for vaccines, the Food and Drug Administration last week announced plans to move to an annual booster schedule, similar to the annual flu shot schedule. Agency advisers voted to support a proposal to simplify the current vaccination effort by recommending that the same strain composition be used in all doses of Covid-19 vaccine administered in the United States.
Investors also have in mind the approaching patent cliffs; Pfizer said it expects to lose $17 billion in annual revenue by 2030 from expiring patents. The company has hatched a plan to more than make up for those losses through a series of near-term launches and business development.
So far, the market remains skeptical. Pfizer shares trade at 10 times expected earnings over the next 12 months, well below those of peers such as Johnson & Johnson, which trade at 16 times earnings, and
(LLY), which trades at 40 times earnings.
As of Tuesday, Pfizer stock is down 15% this year and 17.9% over the past 12 months.
Write to Josh Nathan-Kazis at email@example.com