Pfizer's Covid Windfall Shrinks, Expands Cost-Cutting Efforts

On Tuesday, Pfizer Inc. PFE reported first-quarter 2025 adjusted EPS of 92 cents, compared to 82 cents a year ago, beating the consensus of 67 cents.

Pfizer’s sales fell 8% year over year to $13.71 billion, slightly below the consensus of $13.95 billion. This reflects an operational decrease of $908 million, or 6%, as well as an unfavorable impact of foreign exchange of $256 million, or 2%.

The operational decrease was primarily driven by a decline in Paxlovid revenues, partially offset by growth from the Vyndaqel family, Comirnaty, and several other products across categories despite the unfavorable impact of higher manufacturer discounts resulting from the Inflation Reduction Act (IRA) Medicare Part D Redesign.

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Quarterly Comirnaty revenues of $565 million increased 62% operationally compared with the prior-year quarter. Paxlovid revenue fell 75% operationally to $491 million.

Vyndaqel family drugs generated sales of $1.49 billion, up 33%. Eliquis, a blood thinner drug, generated sales of $1.92 billion, down 4%.

Nurtec ODT/Vydura sales jumped 40% to $248 million. Prevnar family pneumococcal vaccine sales dipped 1% to $1.66 billion, and Abrysvo RSV vaccine sales slumped 6% to $131 million.

In April, the Advisory Committee on Immunization Practices (ACIP) voted to expand its recommendation for the use of respiratory syncytial virus (RSV) vaccines approved for adults 50-59 years of age at increased risk of RSV-associated lower respiratory tract disease (LRTD)

Guidance: Pfizer reaffirms 2025 revenues of $61 billion-$64 billion compared to consensus of $62.93 billion. The company anticipates adjusted EPS of $2.80-$3.00 compared to consensus of $2.96.

Pfizer adds the guidance does not include the potential impact of future changes in trade and tariff policies.

Cost-Cutting Initiatives: Pfizer said it plans to save an extra $1.2 billion through its ongoing cost-cutting efforts, aiming to reach that goal by the end of 2027.

The savings will mainly come from lower spending on selling, informational, and administrative expenses (SI&A), thanks to more automation, use of AI, and simpler business processes.

To make these changes, Pfizer expects to spend around $1.6 billion through 2027, mostly on severance pay, tech upgrades, and implementation costs.

The company still plans to achieve $4.5 billion in savings by the end of 2025. With the new target, total program savings are expected to reach about $5.7 billion by 2027.

As part of the plan, Pfizer expects to save around $500 million by streamlining its R&D operations by the end of 2026, which will be reinvested into new research. Pfizer expects to spend about $600 million to implement these R&D changes.

Price Action: At the last check on Tuesday, PFE stock was up 3.41% to $23.84.

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