Pfizer is cutting at least another $1.2 billion from its spending while the company searches for its next big hit after the failure of its obesity pill.
The New York City-based drugmaker’s first quarter revenue of $13.7 billion fell short of analysts’ $14 billion average estimate, it said in a statement Tuesday. Adjusted earnings were 92 cents per share.
Pfizer is maintaining its 2025 outlook of between $61 billion and $64 billion and adjusted per-share earnings of $2.80 a share to $3 a share. The company’s Chief Financial Officer David Denton said the company is “currently trending towards the upper end” of the per-share earnings guidance range.
That wasn’t enough to encourage investors. Pfizer’s shares fell as much as 2.6% after the markets opened in New York.
The new cuts Tuesday come as the drugmaker struggles to find sources of growth amid declining demand for its vaccine and treatment for Covid. Pfizer is expected to lose more than $15 billion in revenue by the end of the decade as top products lose patent protection. A series of multibillion-dollar acquisitions has yet to yield new blockbusters, and Pfizer’s stable of drugs in development has failed to win over Wall Street.
“Investors are just not excited about the current Pfizer business or the pipeline,” Mizuho analyst Jared Holz said. “You could argue that nothing that they’ve done over the past few years has really worked, and to just watch your stock make new multi-year lows, that can’t be the endgame here.”
Pfizer’s shares were trading around $23 as of 9:36 a.m. in New York Tuesday, after surpassing $60 in December 2021, during the height of the pandemic.
The company didn’t give details on how existing tariffs imposed by President Donald Trump are impacting its business and said its guidance doesn’t account for the potential for future levies. Large competitors like Johnson & Johnson and Merck & Co. have warned existing tariffs will cost them hundreds of millions of dollars this year alone. Trump has threatened to impose additional tariffs on pharmaceuticals imported to the US.
Management announced it would reinvest some $500 million back into research and development. The new cuts announced Tuesday come on top of an already announced effort to save $6 billion by the end of 2027.
The recent failure of Pfizer’s obesity pill, the company’s best shot to break into a blockbuster market ruled by Eli Lilly & Co. and Novo Nordisk A/S, has intensified the pressure on Chief Executive Officer Albert Bourla.
Pfizer has said it can spend up to $15 billion on acquisitions this year, and analysts have speculated the company might take a look at smaller obesity players including Viking Therapeutics Inc. and Structure Therapeutics Inc.
Meanwhile, the company’s Covid business, which once drove annual revenue to $100 billion, has dramatically faded since the heights of the pandemic.
In the first quarter, Covid sales overall dragged on sales. Pfizer’s Covid vaccine revenue was $565 million, beating estimates of $325 million. But Paxlovid, the company’s pill for Covid, brought in $491 million, far below Wall Street’s $902 million forecast.
As for other drugs, sales of Eliquis, the company’s decade-old blood thinner and one of its top drugs, were $1.92 billion, roughly in line with estimates. The pneumonia vaccine Prevnar added $1.66 billion, meeting analysts’ average view.
Sales of the heart drug Vyndaqel were $1.49 billion on the quarter, beating estimates of $1.38 billion despite mounting competition from BridgeBio Pharma Inc. and Alnylam Pharmaceuticals Inc.
Pfizer, which relies on a global network of manufacturing sites to supply drugs to the US, could be significantly impacted by Trump’s promised tariffs on pharmaceuticals. Bourla has said the company could mitigate part of the impact by moving some overseas production into the US.
Last year, activist investor Starboard Value LP disclosed a $1 billion stake in the company, accusing management of squandering more than $20 billion of value and saying that replacing Bourla “could make sense.” Pfizer got a reprieve in January when Starboard didn’t nominate its own slate of directors to the company’s board, but the activist could still agitate for changes next year.
