Shares of Pfizer Inc. and other biotech drug makers fell in the extended session Friday after Pfizer slashed $ 9 billion in expected sales from its full-year outlook as it seeks to shift to commercial approval of its Paxlovid COVID treatment, and foreshadowed layoffs.
The company forecast full-year earnings of $ 1.45 to $ 1.65 a share on revenue of $ 58 billion to $ 61 billion. Pfizer PFE, -2.46% said the new outlook calls for a reduction in expected revenue for COVID treatment Paxlovid of $ 7 billion. It further foresees a $ 2 billion reduction in revenue for the Comirnaty COVID vaccine it makes with BioNTech BNTX, -4.89%. Pfizer also said it will have to take a $ 5.5 billion charge for COVID-product inventory write-offs.
Analysts surveyed by FactSet had expected full-year earnings of $ 3.29 a share on revenue of $ 65.96 billion.
In August, Pfizer’s stock came under fire when the drug maker reported a drop in earnings because of weaker demand for COVID vaccines and antiviral drugs. Even with that lower demand, Pfizer forecast in August full-year earnings of $ 3.25 to $ 3.45 a share on revenue of $ 67 billion to $ 70 billion.
Pfizer also launched a “cost realignment program” earmarked to save the company “at least” $ 3.5 billion, with $ 1 billion of that coming in 2023, and $ 2.5 billion in 2024, it said this week. Without providing further detail, Pfizer said costs will “primarily include severance and implementation costs.” Pfizer said it will hold a conference call with investors on Monday at 8 a.m. Eastern.
The new outlook comes as Pfizer seeks to shift its Food and Drug Administration emergency-use labeled Paxlovid to a commercially marketed version beginning in November. Pfizer said Medicare, Medicaid and uninsured patients will receive Paxlovid free of charge through 2024. Beginning next year, Pfizer plans to sell Paxlovid to privately insured patients, and offer a copay program through 2028, the company said.
The New York-based pharmaceuticals company said the U.S. government would return about 7.9 million emergency-use doses of Paxlovid at the end of 2023, and receive credit for future approved doses from Pfizer. The company said the amended supply agreement “removes a significant uncertainty” by providing a pathway to commercialization of Paxlovid on Jan. 1, 2024. Additionally, Pfizer said it would provide the U.S. a strategic national stockpile with one million treatment doses.
Pfizer shares dropped more than 7% after hours, following a 2.5% decline to close the regular session at $ 32.11. Shares of the Dow Jones Industrial Average component are down more than 37% year to date, while the Dow itself DJIA is up 1.6%, and the S&P 500 index SPX is up 12.7%.
The news had a far-reaching effect. Shares of BioNTech declined 2% after hours, following a 4.9% fall to close Friday at $ 103.58.
Shares of Moderna Inc. MRNA, -2.46% and Novavax Inc. NVAX, -5.37% also dropped in the extended session following Pfizer’s announcement. Moderna shares fell more than 4% after hours, following a 2.5% decline to close Friday at $ 98.30, and Novavax shares declined 1%, after a 5.4% drop to close at $ 7.05.