[NEW YORK] Pfizer raised its 2025 profit forecast for the second time this year, as ongoing cost cuts helped make up for slow sales growth that’s driving its battle for the obesity start up Metsera.
The drugmaker’s adjusted earnings for the year will be US$3 a share to US$3.15 a share, Pfizer said on Tuesday (Nov 4), up from an earlier range that topped out at US$3.10 a share, as it continues to slash costs. The company didn’t increase its annual sales expectations of US$61 billion to US$64 billion, the midpoint of which shows sales growth declining this year from last.
It was a “low quality” beat and raise, according to Mizuho health-care specialist Jared Holz. He said Pfizer’s cost-cutting strategy appears to be working, allowing the company to raise its profit outlook, but that many of Pfizer’s key products came in below Wall Street’s estimates.
The New York-based drugmaker is still trying to chart a path to growth years after the pandemic, with a more than US$7 billion cost-cutting programme and planned deals like the one for Metsera to drive future sales growth. Pfizer is working to rebuild after demand for Covid products rapidly evaporated, sending shares down around 60% from pandemic-era highs.
Many of the company’s top drugs are under pressure, pneumonia vaccine Prevnar and heart drug Vyndaqel both are facing increased competition, and Covid products don’t hold the allure they once did.
Pfizer is still trying to rebuild in the aftermath of the pandemic, with a cost-cutting programme and planned deals to drive future sales growth. The company’s performance was dented after demand for Covid products evaporated quicker than management expected, sending shares down around 60% from pandemic-era highs.
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Covid shot sales were largely in line with expectations, but down 20% in the quarter when compared with a year ago. The drugmaker said the declines were due to US regulators narrowing recommendations for who should get the shots and a delayed approval of the latest generation of the vaccine.
Sales of Pfizer’s pneumonia vaccines of US$1.74 billion in the quarter were in line with estimates. Pfizer’s dominance is being challenged by a new shot from Merck & Co. Studies have shown Merck’s vaccine protects against a higher percentage of disease-causing bacterial strains in adults than Pfizer’s. Merck’s shot outperformed expectations in the quarter.
Sales of Pfizer’s drug Vyndaqel, which treats a devastating form of heart failure, were US$1.59 billion. Analysts had expected US$1.68 billion in sales. The medication treats a disease called ATTR cardiomyopathy, which was once thought to be rare, but has since become a lucrative market for a handful of drugmakers.
For years, Pfizer has tried to get into the obesity space without success. The market, which is projected to reach US$95 billion by 2030, is currently dominated by Eli Lilly and Novo Nordisk.
Because Pfizer’s early attempts at developing an obesity treatment fell flat, the drugmaker reached a deal to pay US$4.9 billion for obesity startup Metsera in September, along with future payments.
Metsera is developing a handful of experimental weight-loss drugs, including a shot that could be taken less often than the market-leading drugs from Novo and Lilly.
Novo upended Pfizer’s buyout of Metsera with a rival bid last week. In recent days, Pfizer has filed two lawsuits challenging the Danish company’s offer.
On Monday, a judge put one of Pfizer’s cases on a fast-track schedule and is expected to hold a hearing on Tuesday on whether to grant the company’s request for a temporary order blocking Metsera from closing a deal with Novo. Novo’s offer started a four-day clock for Pfizer to offer a counterbid, but so far Pfizer has only responded with legal action instead of a higher price. BLOOMBERG
