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A Pfizer research and manufacturing facility in Andover, Mass.
Sophie Park/Bloomberg
When
Pfizer
discloses its quarterly earnings on Tuesday morning, investors will be watching to see whether the company’s big moves are starting to pay off.
The big pharma company has been busy over the past few months. Since late May, it has won Food and Drug Administration approval for at least five different medicines as it prepares for patent expirations expected to hit seven of its key products by the end of the decade.
Pfizer (ticker: PFE) says those patent expirations will erase $17 billion in annual revenues by 2030. The company has laid out a plan to replace those annual revenues with $20 billion from new drug launches, plus $25 billion from companies Pfizer buys.
That plan is already well underway. The second-quarter financial results, due before the open, will show how successful it has been so far. Investors will be listening for updates on whether the moves are translating into cash.
Pfizer shares have performed poorly this year, down 30% through the close on Monday, trailing behind the
S&P 500 Pharmaceuticals
industry index, which had fallen 3.4%. The broader
S&P 500
was up almost 20%.
“[Investors] really need to start seeing a bigger contribution from new drug launches including those acquired via recent deals,”
Mizuho
healthcare equity strategist Jared Holz wrote in an email to investors on Sunday evening.
Analysts expect Pfizer to report earnings of 57 cents a share on Tuesday, from sales of $13.4 billion, according to FactSet. That is down sharply from $22.6 billion in the same quarter last year, partly because expectations for sales of the company’s blockbuster Covid-19 vaccines continue to drop.
Pfizer’s earnings and sales exploded during the pandemic, but the figures are now coming back to earth. Analysts expect Pfizer to have sold $1.5 billion worth of its Covid-19 vaccine in the second quarter, down from $8.8 billion in the second quarter last year.
Another key point on Tuesday will be the progress of the company’s proposed acquisition of
Seagen
(SGEN), which develops cancer medicines. Pfizer announced a $43 billion deal to buy Seagen in March, but the deal hasn’t closed.
The Federal Trade Commission, which in May sued to block
Amgen
’s
(AMGN) $27.8 billion proposed acquisition of
Horizon Therapeutics
(HZNP), has requested more information from the companies.
Seagen
shares are trading at a 16% discount update post close? to Pfizer’s proposed sale price of $229, suggesting investors are doubtful the deal will close.
The company could also face questions about a tornado strike on an important Pfizer plant that manufactures 8% of sterile injectables used in U.S. hospitals. While the FDA has moved to soothe worries about the disaster creating an immediate shortage of important drugs, questions remain about its potential impact on the supply chain.
Recent Pfizer FDA approvals include Litfulo, a treatment for alopecia areata, and a combination of the drugs Talzenna and Xtandi for metastatic prostate cancer.
The company is also preparing to launch Abrsyvo, a vaccine to prevent respiratory syncytial virus in older adults. The Centers for Disease Control and Prevention gave a more-tepid-than-expected endorsement of both the Pfizer RSV shot and a competing RSV shot from
GSK
(
GSK
) in June, raising questions about whether the vaccine’s sales will meet expectations.
Pfizer is hosting an investor call at 10 a.m.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
