Yahoo Finance Pfizer CEO: 2023 will be a 'pivotal year' as COVID-19 drug sales wane
Americans are moving on from COVID-19. Most public places, transit, and municipalities have gotten rid of mask mandates. Vaccine booster rates have plateaued, even with the introduction of a new “bivalent” shot targeting multiple variants, including Omicron.
Pfizer (PFE), the giant, legacy drugmaker, along with its partner BioNTech and rival, Moderna (MRNA), saved lives with messenger-RNA-based vaccines that also gave a big boost to profits. Now — to a degree — Pfizer has to move on, too.
“Next year for Pfizer is a pivotal year,” Chief Executive Albert Bourla said in an interview at Yahoo Finance’s All Markets Summit on Monday. “It is the year that we can prove to the world and prove to ourselves that we can do multiple launches. I believe in the strength of our commercial organization, and in the strength of our manufacturing organization.”
The company plans to bring more than 10 new medicines to market in 2023, far higher than its typical one or two annually. That’s because it’s looking to replace declining revenue from its COVID-19 vaccine, Comirnaty, and its viral treatment, Paxlovid. Pfizer has forecast those drugs will generate $32 billion and $22 billion of sales this year, respectively. That's more than half Pfizer's revenue.
Some analysts don’t think the drugs will meet those targets. Carter Gould at Barclays, for example, is modeling $31 billion in vaccine sales and $21.5 billion for Paxlovid. He wrote in a recent note that sales could then fall by 43% and 51%, respectively, in 2023.
Regardless of whether Pfizer meets coronavirus-related sales targets for 2022, the trend is downward thereafter. Bourla has laid out a plan to replace the revenue.
“We committed to bringing in $25 billion of risk-adjusted revenue by 2030 and we are already exceeding 10. Our internal pipeline, I think, is the biggest competitive advantage, and business development will provide growth over loss of exclusivity,” he said.
The prospect of revenue loss has haunted Pfizer before. Pre-2020, investors saw the biggest risk to Pfizer as being the so-called patent cliff, the loss of exclusive rights to some of its blockbuster medicines. Bourla, who joined Pfizer as CEO in 2019, was working to slim the company down and grow its pipeline of new drugs when the pandemic hit.
As Bourla tells it, the process of developing and producing Comirnaty showed Pfizer employees that they could indeed be nimble, and that they could meet seemingly insurmountable goals. He’s trying to use those lessons to foster pharmaceutical development internally and through partnerships (like the successful one with BioNTech). He’s also been making acquisitions to gain new drugs, including Biohaven for $11.6 billion (migraine medicine); Global Blood Therapeutics for $5.4 billion (sickle cell disease treatment); and Arena Pharmaceuticals for $6.7 billion (immuno-inflammatory disease therapies).
Bourla said he’ll continue on the same acquisition path: “We want to acquire science at early stages, that we can add value to by bringing our manufacturing capabilities, our clinical development capabilities.”
Shares of Pfizer surged 60% in 2021 as revenue almost doubled. They’ve fallen about 25% this year as investors questioned what would come next. Sell-side analysts, for their part, are evenly split between buy and hold ratings. Pfizer is due to report its third-quarter earnings on Nov. 1.
Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9am-11am ET. Follow her on Twitter @juleshyman, and read her other stories.
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