Covid vaccine sales of $32 billion are expected to help push Pfizer Inc. (PFE, Financial) past the $100 billion revenue mark this year, nearly double what the pharma giant brought in for 2021, the company said during its year-end earnings call. The mRNA vaccine Comirnaty added nearly $37 billion to Pfizer’s top line last year, far outpacing the best-ever yearly total for any single drug.
Further brightening the 2022 picture is the Covid antiviral Paxlovid. The good news is sales of the treatment are expected to reach $22 billion this year. The bad news is investors were hoping it would bring in $30 billion, which some still think it might.
Despite the spate of mostly positive developments, Pfizer’s shares are down 4% in the past week, and one reason is the company’s non-Covid business, which was described as “lackluster” by the pharma consulting group Evaluate. As a result, the drug firm issued disappointing earnings guidance for the year in the range of $6.35 to $6.55, far short of the $10.00 hoped for.
Sales of the Pfizer blockbuster Xeljanz are being affected by a more stringent safety warning for the drug as well as others in its class. Xeljanz generated more than $2.4 billion in revenue last year. The 2021 acquisition of Arena Pharmaceuticals for $6.7 billion does give Pfizer a drug that could offer a safer way to treat inflammatory diseases.
And even Comirnaty is a factor given the vaccine is dipping in profitability as Pfizer signs more contracts outside the U.S., according to Evercore ISI’s Umer Raffat. He estimated that Comirnaty’s profit margin has dropped to around 35%, from around 40% throughout 2021. Pfizer might have to look elsewhere as its Covid business begins to wind down. The company is not discounting making a big splash but said it wants to avoid any buyouts based on cost synergies, keeping with its stated position two years ago. The company’s executives emphasized that some of its biggest successes have been achieved by relatively inexpensive deals.
While the success of its Covid drugs gives Pfizer some breathing room, the company In general said it will be on the lookout for assets that represent significant advances. Its stated preference is to obtain drug candidates in areas in which it already has a position, including oncology, inflammation/immunology, rare diseases, vaccines and internal medicine, which includes cardiovascular and metabolic diseases.
Pfizer's sales in 2021 were up 95% to $81.3 billion, which was in the guidance parameters but below the Zacks consensus estimate of $81.6 billion. Adjusted earnings were $4.42 per share, which beat the Zacks consensus estimate and topped the guidance range.
The company expects sales in 2022 between $98.0 billion and $102.0 billion, short of the most recent estimates but higher than previous expectations. Adjusted earnings per share are expected to be in a range of $6.35 to $6.55 compared with the estimates of $6.41 per share. Pfizer is rated a buy by 22 analysts offering opinions, with 11 assigning the stock an average price target of $58.82 with a high of $70.00 and a low of $51.00.
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