Pfizer Cuts Annual Revenue Guidance By $9B Amid COVID-19 Vaccine Sales Slump, BioNTech Warns €900M Write-Offs

Friday, Pfizer Inc PFE slashed its full-year earnings and revenue guidance, citing decreasing demand for its COVID-19 products.

The privatized COVID-19 vaccine distribution system has led to upfront payment requests, which the government previously covered during the public health emergency declaration. 

Some pharmacy chains and distributors have reported ongoing delivery delays from their wholesalers.

The company now expects 2023 sales of $58 billion-$61 billion, down from its previous guidance of $67 billion-$70 billion versus consensus of $66.0 billion.

Pfizer said it cut its revenue outlook "solely due to its Covid products."

The U.S. pharma giant cut its FY23 adjusted EPS to $1.45-$1.65 from $3.25-$3.45 compared to the consensus of $3.30.

The reduced guidance for Paxlovid by approximately $7.0 billion includes a $4.2 billion non-cash revenue reversal for the return of approximately 7.9 million doses labeled for emergency use by the U.S. government.

It also said it anticipates sales of its vaccine, Comirnaty, will be $2 billion lower than expected because of lower-than-expected vaccination rates.

In addition, in Q4 2023, Pfizer launched a cost realignment program that is expected to deliver targeted savings of at least $3.5 billion, of which $1.0 billion is expected to be realized in 2023, and an additional $2.5 billion is expected to be realized in 2024. 

The one-time costs to achieve the savings associated with the new cost realignment program are expected to be approximately $3.0 billion, of which the majority is expected to be cash.

Pfizer said it would take a non-cash charge of $5.5 billion in Q3 to write off $4.6 billion of Paxlovid and $900 million of inventory write-offs and other charges for the vaccine.

BioNTech SE BNTX flagged write-downs of up to €900 million, reflecting similar charges to Pfizer.

BioNTech will likely "recognize the effect of Pfizer's inventory write-offs and other charges related to Comirnaty in Q3 2023 up to €0.9 billion, which represents BioNTech's half of the gross profit-sharing agreement with Pfizer," it said in a statement.

Price Action: PFE shares are down 1.21% at $31.72, and BNTX shares are down 6.82% at $96.52 during the premarket session on the last check Monday.