Pfizer (PFE) -) shares turned higher in early Monday trading after the drugmaker slashed its full-year sales and profits forecasts, while unveiling steep job cuts, linked to slowing demand for its Covid vaccines and treatments.
In a late Friday update that precedes a group conference call with analysts later today, Pfizer said full-year group revenues would likely come in between $58 billion and $61 billion, down from its early August forecast of between $67 billion and $70 billion, amid slumping sales of its Comirnaty covid vaccine and its Paxlovid antiviral treatment.
In response, Pfizer said it would write-off around $4.6 billion in Paxlovid inventories, while taking a further $5.5 billion non-cash charge against its third quarter earnings. It also unveiled plans for a $3.5 billion cost-cutting program, spread over two years, that will include a significant number of job cuts.
Pfizer also said adjusted earnings for the full-year will likely be within a range of $1.45 to $1.65 per share, well south of its August forecast of between $3.25 to $3.45 per share.
The group said it still expects around 17% of the U.S. population to get an updated Covid shot, however, a tally that is largely in-line with last year's levels.
Moving Paxlovid into the public sphere, from its current status as a government-distributed treatment, could also boost longer-term prices, Pfizer indicated, adding great predictability and transparency to its forecasts.
Vaccine rival Moderna (MRNA) -) also said its sees "improved visibility" in its Covid sales, and reaffirmed its full-year forecast for revenues in the region of $6 billion and $8 billion for Spikevax sales.
"Pfizer’s non-COVID product portfolio remains strong, and we continue to expect these products to achieve year-over-year operational revenue growth in the range of 6% to 8% in 2023," said CEO Albert Bourla.
"We remain proud that our scientific breakthroughs played a significant role in getting the global health crisis under control," he added. "We continue to expect our COVID-related revenues to contribute to our business in future periods, helping us to further invest in activities that drive Pfizer’s long-term growth potential.”
Pfizer shares were marked 5.3% higher in early Monday trading to change hands at $33.84 per share, a move that still leaves the stock down nearly 17% over the past six months.
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