Pfizer stock surged Wednesday after the pharma giant walloped analysts' first-quarter earnings forecast and delivered better-than-expected sales on the back of Covid treatment Paxlovid.
Paxlovid brought in $2.04 billion in sales. Through sales tumbled 50% year over year, they crushed the Street's call for $878.2 million.
That was partly due to a one-time $771 million infusion after the U.S. government returned 5.1 million courses of the treatment. Excluding that, Paxlovid sales still topped expectations. Comirnaty, the Covid vaccine Pfizer developed with BioNTech brought in $354 million in sales, diving 88%. Aside from those two factors, Pfizer's sales climbed 11%.
On today's stock market, Pfizer stock jumped 6.1% to close at 27.18. Shares retook their 50-day moving average, MarketSurge shows. Shares had been trapped until that line since early April.
Pfizer Stock Sees 'Massive' Upside
There was "massive" upside in the first quarter, Leerink Partners analyst David Risinger said in a report. Sales toppled 20% to $14.88 billion, but easily topped projections for $13.87 billion, according to FactSet. Adjusted earnings came in at 82 cents per share, down 33%, but above calls for 51 cents.
In addition to strong Paxlovid sales, Risinger noted Vyndaqel generated $1.14 billion in sales, 25% above expectations. Vyndaqel is Pfizer's treatment for cardiomyopathy due to hereditary transthyretin-mediated amyloidosis. In this condition, abnormal protein builds up on the heart, causing problems.
The Vyndaqel results also bolstered BridgeBio Pharma stock. Shares jumped 5.5% to 27.03. BridgeBio is working on a treatment for the same condition. The market is "quite large" at an estimated $14 billion-plus, Mizuho Securities analyst Salim Syed said in a report.
"Today's first-quarter (Vyndaqel) print annualizes U.S. sales alone at about $3 billion and worldwide at about $4.5 billion," he said. Syed has a buy rating on BridgeBio stock, but doesn't rate Pfizer stock.
Less promisingly, revenue from migraine treatment Nurtec — which Pfizer bought when it acquired the former Biohaven Pharmaceuticals in 2022 — widely missed sales expectations at $178 million. Nurtec sales edged up 7% year over year.
Gross Marin Improvement
Evercore ISI analyst Umer Raffat noted Pfizer notched a nearly 80% gross margin in the first quarter — much higher than the 70% Pfizer projected for 2024 back in December.
Risinger, the Leerink analyst, says the stronger gross margin was boosted by a favorable sales mix, the adjustment to Paxlovid and cost efficiencies. By the end of the year, Pfizer says it's on track to save at least $4 billion in net costs.
That helped Pfizer boost its earnings outlook for the year. Pfizer now expects to earn an adjusted $2.15 to $2.35 per share. The midpoint of Pfizer's guidance came in just above forecasts for $2.21. Pfizer kept its sales guidance at $58.5 billion to $61.5 billion, vs. expectations for $59.94 billion.
Risinger reiterated his market perform rating on Pfizer stock. Raffat rates shares an outperform.
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