Pfizer drops sales guidance after posting 47% jump in Q4 profits

New York-based pharmaceutical company’s net profit rose to nearly $5bn in the three months to the end of December

Pfizer's headquarters in New York. The company's fourth quarter revenue was up nearly 2 per cent yearly. Reuters

Pharmaceutical company Pfizer dropped its 2023 revenue guidance on declining Covid vaccine sales after posting a 47 per cent rise in last year's fourth-quarter net profit.

The New York-based company’s net profit jumped to nearly $5 billion in the three months to the end of December. Its October-December revenue rose roughly 2 per cent yearly to $24.29 billion, it said in a statement on Tuesday.

The drug maker’s net income for the past full financial year increased 43 per cent to more than $31.3 billion. Sales in 2022 jumped 23 per cent to more than $100.3 billion, an all-time high, driven by higher sales of Covid-19 vaccines, Pfizer said.

The company expects its full year sales to drop to between $67 billion and $71 billion, as the pandemic eases and sales for its Covid vaccines drop.

Pfizer's adjusted earnings per share rose 45 per cent yearly to $1.14 per share in the last quarter.

Sales of Pfizer’s Covid vaccine dropped almost 9 per cent on an annual basis to $11.3 billion in the fourth quarter.

Meanwhile, Paxlovid contributed $1.8 billion in global revenue in the last quarter. Paxlovid is a treatment for Covid-19 patients, but it does not prevent infection. It was found to reduce the risk of hospital admission or death from the virus by 90 per cent in a clinical trial of adults.

After the announcement, Pfizer's shares were trading about 0.15 per cent down at $43.47 each.

Albert Bourla, chairman and chief executive of Pfizer, said: “Our focus is always on what is next. As we turn to 2023, we expect to once again set records, with potentially the largest number of new product and indication launches that we have ever had in such a short period of time.

“We believe that the combination of these expected near-term launches, additional pipeline products that could potentially come to market in the medium-term, and anticipated contributions from business development, has the potential to set the company up for continued robust growth through the rest of this decade and beyond."

Mr Bourla said this should be a "transition year", representing a low point in the company’s Covid-related revenue.

However, he expects an increase in Covid-19 vaccination rates from 2025, assuming the successful development and approval of a Covid/flu combination product.

“A successful introduction of a Covid/flu combo could over time bring the percentage of Americans receiving the Covid-19 vaccine closer to the portion of people getting flu shots … outside the US, we expect these general trends to be similar,” he said.

The company expects $13.5 billion in Covid vaccine sales in 2023, a year-on-year decline of 64 per cent. It predicts a 58 per cent drop in revenue for Paxlovid to $8 billion.

Pfizer’s primary care unit — consisting of the former internal medicine and vaccines product portfolios, as well as Covid-19 products — accounted for almost 71 per cent of overall revenue. Its sales jumped 7 per cent on an annual basis to more than $17.3 billion in the fourth quarter.

The specialty care arm — consisting of the former inflammation and immunology departments, rare disease and hospital product portfolios — dropped 11 per cent to nearly $3.5 billion.

Meanwhile, oncology division revenue dropped 7 per cent to more than $3bn during the quarter.

The company spent more than $3.6 billion on research and development, about 14.8 per cent of its total sales in the quarter. This is nearly 5 per cent more than was spent on R&D in the same period in 2021.

“Looking forward to 2023, we expect strong top-line growth of 7 per cent to 9 per cent excluding our Covid-19 products and anticipated foreign exchange impacts,” said David Denton, chief financial officer and executive vice president of the company.

“We are also increasing our investments behind our launch products and pipeline in order to help realise our growth goals for 2023 and beyond."