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Shares of Pfizer Inc. (NYSE: PFE ) rose on Tuesday even as the company reported mixed results for the fourth quarter of 2022 and provided underwhelming guidance for the year ahead. Earnings beat expectations while profits fell. The pharmaceutical giant’s outlook for fiscal year 2023 shows a decline in revenue and earnings compared to the previous year and is also below consensus targets.
Quarterly performance
Pfizer generated revenue of $24.3 billion for the fourth quarter of 2022, up 2% on a reported basis and 13% on an operational basis, compared to the same period a year ago. Excluding the contribution from Comirnaty and Paxlovid, operating profit increased by 5%. However, the top line missed market estimates. Adjusted EPS rose 45% year over year to $1.14, beating forecasts.
Update the pipeline
In its quarterly conference call, the company expects revenue from its business, excluding COVID products, to grow 7-9% operationally in 2023, with growth expected to be split between the contribution of new product launches, purchased products, and the in-line portfolio.
These projections include the launch of products such as the RSV vaccine for the elderly, the pediatric indication Prevnar 20, as well as products and candidates such as Nurtec and Oxbryta acquired by Pfizer through business development activities. The company is expected to have up to 19 new products or indications on the market within 18 months. 15 of these products will be from the internal pipeline.
The COVID Franchise
In the fourth quarter of 2022, Comirnaty generated revenues of $11.3 billion, which was down 9% on a reported basis but up 3% on an operational basis. Paxlovid outside the US contributed $1.8 billion in revenue.
For the full year 2023, Pfizer expects Comirnaty’s revenue to be around $13.5 billion, down 64% from 2022. Paxlovid’s revenue is expected to be around $8 billion, down 58% from last year.
Pfizer expects 2023 to be a transition year for its COVID products. In 2022, the dosage and treatment course for Comirnaty and Paxlovid sold at pandemic prices have not been finalized. This creates government inventory that the company anticipates will be absorbed in the second half of 2023.
At this time, Pfizer expects to begin selling these products at commercial prices through commercial channels. The company expects doses sold and used closer to 2024 and continue to stabilize commercial prices.
Outlook
For the 2023 fiscal year, Pfizer expects total revenue of $67-71 billion, which represents a 31% operational decline at the midpoint from the previous year. This range is also below the $74 billion that analysts had predicted for this year.
The decline in revenue is due to the product of COVID which, as the company said, is expected to rise from the peak in 2022 to the lowest point in 2023 before it can grow again in 2024 and beyond.
Pfizer expects adjusted EPS in FY2023 to be $3.25-3.45, which is down from the $6.58 reported for FY2022 and below the consensus estimate of $4.42.
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