Pfizer, which is under pressure from activist investor Starboard, on Tuesday (Oct 29) topped third-quarter estimates as sales of its Covid-19 treatment Paxlovid blew past Wall Street expectations.
The US drugmaker has struggled with a sharp fall in sales of its Covid vaccine and antiviral pill Paxlovid from pandemic levels, prompting it to launch a cost-cutting programme last year and focus on deals to bolster its business.
On Tuesday, the company said the better-than-expected growth for Paxlovid reflected higher infection rates and “strong commercial execution.”
“The demand for Paxlovid seems to have stabilised at the current levels and appears to be closely correlated with each wave of Covid-19,” CEO Albert Bourla said in prepared remarks.
Shares rose 1.5% to US$29.30 in premarket trading after the company also raised its annual profit and sales forecast.
Its shares trade at roughly half of their pandemic peaks. Activist hedge fund Starboard Value, investors and analysts have said they want to see improved profitability from the cost cuts and revenue growth powered by its recent deals.
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Revenue from Paxlovid was US$2.7 billion in the quarter, compared with analysts’ expectations of US$456.40 million.
JP Morgan analyst Chris Schott said that the antiviral benefited from an earlier Covid season and what appears to be higher-than-expected commercial pricing. The US experienced a late summer spike in Covid-19 cases this year.
Covid vaccine Comirnaty, which Pfizer makes with German partner BioNTech, brought in quarterly sales of US$1.42 billion, compared with expectations of US$870 million, according to estimates compiled by LSEG.
The blockbuster quarter also encouraged Pfizer to bump up its annual revenue expectations from Comirnaty and Paxlovid to US$10.5 billion, from its previous forecast of US$8.5 billion.
Analysts expect sales of about US$9 billion from both the products this year.
Pfizer now expects annual profit to be in the range of US$2.75 to US$2.95 per share, compared with its prior forecast of US$2.45 to US$2.65.
On an adjusted basis, Pfizer earned US$1.06 per share in the third quarter, compared with the average analyst estimate of 62 US cents.
Total revenue of US$17.70 billion beat estimates of US$14.96 billion. REUTERS
