Pfizer Inc. (NYSE: PFE) reported a robust third-quarter performance, driven by stronger-than-anticipated sales of its COVID-19 antiviral treatment Paxlovid.
The drugmaker’s total revenue reached $17.7 billion, a 31% increase compared to last year’s third quarter, surpassing analysts’ projections of $14.92 billion.
Adjusted earnings per share came in at $1.06, well above the expected $0.61.
Paxlovid Demand Boosts Revenue
Pfizer’s COVID-19 treatment Paxlovid brought in $2.7 billion this quarter, spurred by a recent COVID-19 wave and a U.S. government order to restock its national inventory.
Pfizer fulfilled a one-time shipment of one million Paxlovid courses for the U.S. Strategic National Stockpile, which significantly boosted the company’s revenue in the third quarter.
Additionally, sales of Pfizer’s COVID-19 vaccine, Comirnaty, increased by 9% to $1.4 billion.
Additional Revenue from New Acquisitions
Pfizer’s recent acquisition of Seagen, a biotech company known for its oncology products, contributed $854 million to the company’s total revenue this quarter.
The acquisition, completed last year, aligns with Pfizer’s strategy to diversify its portfolio beyond COVID-19 treatments, addressing the company’s goals of growth in new therapeutic areas.
Profitability Recovers Strongly
Pfizer’s profitability also saw a considerable recovery. The company’s Q3 net profit jumped to $4.47 billion, a significant increase compared to a loss of $2.38 billion in the same period last year.
In 2022, the company faced higher expenses and saw no U.S. Paxlovid sales as it transitioned from government to commercial market purchases.
Outlook for Full-Year 2024
Pfizer raised its 2024 adjusted earnings forecast, now expecting a range between $2.75 and $2.95 per share, up from its prior guidance in July.
Analysts, by comparison, are projecting full-year earnings of $2.66 per share. The company’s revised outlook reflects confidence in continued strong demand for Paxlovid and other key treatments, as well as a streamlined cost structure.
Challenges from Activist Investors
Pfizer has recently come under scrutiny from activist investor Starboard Value, which questions the returns from Pfizer’s recent acquisitions, funded in part by its pandemic-era windfall.
Starboard’s CEO Jeffrey Smith expressed intentions to collaborate with Pfizer’s board to create further shareholder value, potentially influencing future strategic decisions.
Pfizer’s Stock Performance
Following the strong quarterly results, Pfizer’s stock gained in early trading, increasing by $0.14 to $29 on Tuesday.
The stock’s recent performance reflects investor optimism toward the company’s improved earnings forecast and its strategic direction in high-demand treatments.
A Promising Outlook Amid Investor Pressure
Pfizer’s third-quarter earnings report highlights a solid recovery bolstered by COVID-19 treatment sales and strategic acquisitions.
While the company faces pressure from activist investors to optimize its portfolio and maximize returns, Pfizer’s raised earnings guidance suggests it is on a positive path for the remainder of 2024.
With strong product demand and a focus on expanding its therapeutic portfolio, Pfizer appears well-positioned for sustained growth.
