Pfizer earnings and revenue top expectations despite Covid vaccine sales decline

Pfizer on Tuesday reported first-quarter revenue and adjusted earnings that topped Wall Street's expectations, despite a decline in sales driven by the lower demand for the company's Covid vaccine.

The pharmaceutical giant's stock was largely flat Tuesday. Shares are down more than 23% for the year through Monday's close, putting the company's market value at around $221.3 billion. 

Here's what Pfizer reported compared with Wall Street's expectations, based on a survey of analysts by Refinitiv:

Pfizer posted net income of $5.54 billion, or 97 cents per share. That compares with $7.86 billion, or $1.37 per share, for the first quarter of 2022.

The company reported first-quarter sales of $18.28 billion, down 29% over the same period a year ago.

Sales of the company's Covid vaccine declined $10 billion, or 75%, compared with the same quarter last year. Pfizer said this was primarily driven by lower contracted deliveries and demand in international markets.

The decline was also due to lower U.S. government contracted deliveries as the country prepares to shift Covid products to the commercial market later this year, according to Pfizer.

Sales of Pfizer's Covid antiviral pill Paxlovid increased $2.8 billion during the first-quarter compared with the same period last year. Pfizer said Paxlovid revenue was propelled by new launches in certain international markets and strong demand in China due to increased Covid cases.

Sales were also driven by final deliveries associated with a U.S. contract finalized in late December.

Paxlovid first entered the U.S. market under emergency use authorization in late December 2021. Pfizer hopes to win full Food and Drug Administration approval for the drug this year. Still, the company expects sales of Paxlovid to drop 58% for the full year compared with 2022.

Excluding Covid product sales, Pfizer said first-quarter revenue grew 5% over the same period a year ago.

That growth was fueled by products from recently acquired companies, according to Pfizer. That includes Biohaven Pharmaceutical's migraine drug Nurtec ODT and Global Blood Therapeutics' sickle cell disease treatment Oxbryta, which contributed $167 million and $71 million, respectively.

The company said the increase was also driven by strong sales of drugs like Sulperazon, an antibiotic for the treatment of urinary tract infections, and blood thinner medication Eliquis.

The New York-based company maintained its 2023 sales forecast of $67 billion to $71 billion. Pfizer also reiterated its full-year adjusted earnings outlook of $3.25 to $3.45 per share.

But Pfizer continues to expect Covid-related sales to decline this year. The company reaffirmed its forecast of $13.5 billion in Covid vaccine sales in 2023 and $8 billion in revenue for Paxlovid.

Pfizer CEO Albert Bourla said the company expects this year to be a "transition year" for Covid sales as the U.S. pivots to the commercial market for Covid products.

He said the company expects U.S. uptake of its Covid vaccine to decline this year and in 2024.

But Bourla noted that Pfizer expects vaccination rates to rebound starting in 2025 and "continuing in 2026 and beyond," assuming the company successfully launches several Covid combination vaccine treatments.

He said the company expects a similar trend outside the U.S., with some variations in certain countries.

Excluding Covid products, Pfizer said it expects 7% to 9% revenue growth this year.

Bourla said that's because the majority of the company's near-term product launches are expected to occur in the second half of this year. The company expects to launch 19 vaccines and treatments over the next 18 months, he noted.

"As such, we expect our non-Covid revenues to grow at a faster rate in the second half of the year than in the first," Bourla said during the call.

Pfizer and other drugmakers like Moderna and Johnson & Johnson have been bracing for a steep drop-off in Covid-related sales this year as the world emerges from the pandemic and relies less on blockbuster vaccines and treatments for the virus. 

But Pfizer is pinning its hopes on M&A and a record pipeline to help the company navigate its post-pandemic boom. 

That pipeline includes Pfizer's RSV vaccine for use in older adults, which could win FDA approval later this month.

The pipeline also includes the company's new pneumococcal vaccine for children and a treatment for ulcerative colitis from the recently acquired Arena Pharmaceuticals.

Pfizer also said last year it plans to add $25 billion in revenue through dealmaking by 2030.

The company already made strides toward that goal with the $43 billion acquisition of Seagen in March. Seagen could contribute more than $10 billion in risk-adjusted sales by 2030 with its cancer therapies, according to Pfizer.

Read the earnings release.

This is a developing story. Check back for updates.