Pfizer on Wednesday forecast 2024 sales that were as much as $5 billion below Wall Street expectations due mostly to declining demand for COVID vaccines and treatment, driving shares down seven per cent in premarket trading.
The lower forecasts come a day after the drugmaker said it would reorganize its cancer division to include the acquisition of Seagen. It also raised its cost-cut target by $500 million on Wednesday.
The drugmaker’s shares, which are already down over 44% this so far this year, were down seven per cent in premarket trading and set to erase over $10 billion in market capitalization, if losses continued during regular trading.
Shares of Moderna fell 4.1 per cent and Pfizer’s German partner in the vaccine BioNTech SE fell 3.9 per cent premarket.
The company has been under pressure from a steep fall in sales of its COVID-19 vaccine and its antiviral pill Paxlovid, which helped it bring in over $100 billion in revenue last year.
The company now expects the products to generate $8 billion in total sales in 2024. Analysts were expecting sales of Comirnaty alone to be over $8 billion, and another $5 billion from Paxlovid.
Analysts said the forecast represented a more conservative outlook for the company’s COVID-19 franchise after it was much too aggressive in its outlook for 2023.
The COVID-19 sales targets “likely represent a floor for 2024 sales,” said J.P. Morgan analyst Chris Schott.
The drop in COVID product sales had also forced Pfizer to launch a program to cut jobs and expenses, which is now expected to save least $4 billion a year.
Pfizer’s $43 billion deal for cancer drugmaker Seagen, which is expected to close on Thursday, is expected to add $3.1 billion to revenue next year.
The U.S. drugmaker expects annual revenue in the range of $58.5 billion to $61.5 billion, compared with analysts’ average estimate of $63.17 billion, according to LSEG data.
The company forecast adjusted profit in the range of $2.05 to $2.25 per share, lower than analysts’ expectation of $3.16.
(Reporting by Leroy Leo in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)