Pfizer Forecasts Lower Sales for 2024, Shares Drop
Pfizer, the pharmaceutical giant, has announced lower sales forecasts for 2024, causing its shares to drop by 7 percent in premarket trading. The decline in sales is primarily attributed to the decreasing demand for COVID-19 vaccines and treatments. This news comes shortly after Pfizer’s announcement of the reorganization of its cancer division, including the acquisition of Seagen, and an increase in its cost-cutting target by $500 million.
Impact on Pfizer’s Market Capitalization
Pfizer’s shares have already experienced a significant decline of over 44 percent this year. With the additional drop in premarket trading, the company is at risk of erasing over $10 billion in market capitalization if losses continue during regular trading. This decline is a result of the sharp decrease in sales of Pfizer’s COVID-19 vaccine and antiviral pill Paxlovid, which generated over $100 billion in revenue last year.
Expectations for 2024 Sales
Pfizer now expects its products to generate $8 billion in total sales in 2024. However, analysts had higher expectations, with projections of over $8 billion for Comirnaty (Pfizer’s COVID-19 vaccine) alone and an additional $5 billion from Paxlovid. The lower forecast indicates a more conservative outlook for Pfizer’s COVID-19 franchise after an overly optimistic projection for 2023.
Reactions from Analysts
Analysts believe that Pfizer’s forecast represents a minimum estimate for 2024 sales. J.P. Morgan analyst Chris Schott stated that the COVID-19 sales targets likely serve as a floor for next year’s sales. The decline in COVID-19 product sales has prompted Pfizer to implement a program to reduce jobs and expenses, aiming to save at least $4 billion annually.
Future Revenue and Profit Expectations
Pfizer’s acquisition of cancer drugmaker Seagen, expected to be finalized soon, is projected to contribute $3.1 billion to the company’s revenue in the next year. Pfizer anticipates annual revenue in the range of $58.5 billion to $61.5 billion, falling short of analysts’ average estimate of $63.17 billion. The company also forecasts an adjusted profit per share between $2.05 and $2.25, lower than analysts’ expectation of $3.16.
Overall, Pfizer’s lower sales forecasts for 2024 have raised concerns among investors, leading to a decline in share prices. The company’s focus on cost-cutting measures and the acquisition of Seagen will play a crucial role in its future financial performance.
