Pfizer lays out post-Covid plans for growth and possible cost cuts

As the Pfizer behemoth continues chugging along post-pandemic, the drugmaker is starting to clarify how its Covid-19 profits will turn into future growth.

For the first time Tuesday morning, Pfizer broke down detailed growth expectations from its slew of acquisitions made over the last year and a half. By 2030, Pfizer set a goal for at least $10 billion in Seagen-related revenue. It expects another $10.5 billion out of its deals for Biohaven, Arena, Global Blood Therapeutics and ReViral.

In total, Pfizer has targeted $25 billion by 2030 from its BD deals, and in Tuesday’s second-quarter earnings update another $5 billion is labeled as the “remaining gap,” making clear there is more to do. Pfizer CEO Albert Bourla didn’t face many questions on this topic, but when asked by Credit Suisse analyst Trung Huynh about whether non-Covid mid-term sales would hit high-single-digit growth ahead of that timeframe, Bourla said he remains confident.

“We’ll continue and we are at 6% right now. All these years we’re right here,” Bourla said. “The non-Covid business, the success of the [upcoming] launches is very important, so we’ll see a lot of things coming ahead of us.”

Pfizer’s Covid-19 vaccines, booster shots and its antiviral drug have been huge sellers, but are in decline. Its Covid-19 vaccine generated $36.8 billion in 2021 sales and $37.8 billion last year, while Paxlovid pulled in $18.9 billion in 2022 revenue — accounting for $93.5 billion in total.

Its deal spending, meanwhile, has added up to $67.2 billion: $43 billion for Seagen, $11.6 billion for Biohaven, $6.7 billion for Arena, $5.4 billion for Global Blood Therapeutics and $525 million for ReViral. That suggests the company may have at least $10 billion or more to spend to make up the last piece of its revenue goal.

David Denton

But with Covid vaccine sales expected to be down 64% compared with 2022, and Paxlovid revenue expected to decline 58%, both Bourla and CFO Dave Denton cautioned that cost-cutting measures may be coming, depending on revenue this fall.

“If our Covid-19 revenues are less than what we assumed, we are prepared to launch an enterprise-wide cost improvement program aligned with the longer-term revenue projections for our business,” Denton said.

Bourla added that Pfizer is expecting a new wave of Covid-19 cases in the second half of the year. Vaccine and Paxlovid demand are expected to increase in response, after which Pfizer will be able to more accurately predict sales.

“We expect the vaccination and treatment rates from the upcoming respiratory disease season to be a reliable predictor of trends in subsequent years,” Bourla said.

Several analysts asked Bourla and Denton for clarity on where specifically such measures will take place. Though they declined to divulge too many specifics, saying the details would come after the fall, Denton noted the cuts would likely be balanced between SI&A and R&D.

Overall, Pfizer reported $12.7 billion in revenue in the second quarter, down 53% from the same period a year ago. Covid-19 products made up the vast majority of that decline, Pfizer said; non-Covid revenues rose by 5%. The company also narrowed its projected full-year revenue from $67-$71 billion reported in the first quarter, to $67-$70 billion Tuesday.

therapeutics
vaccines