Pfizer is keeping an eye on the cost-cutting scissors as COVID-19 revenues fluctuate, but mainly ebb.
According to Pfizer CEO Albert Bourla, Ph.D., “clearly, there is a higher level of uncertainty regarding the demand projections for our COVID-19 products than for the rest of our business,” on a conference call on Tuesday.
Uncertainty still exists
Although Paxlovid and Comirnaty’s transition to a conventional commercial market may be beneficial, uncertainty still exists. In response, the CEO stated that “we are also preparing to have the ability to adjust our 2024 total cost base” in order to meet evolving COVID requirements.
As a matter of fact, he stated, “We have already identified particular areas where we may make improvements, primarily within our COVID-19 cost base.
Just $143 million in global sales were produced by Paxlovid in the second quarter, which is a 98% decrease from the $8.1 billion it made during the same period in 2022. For its part, MRNA vaccine Comirnaty made $1.4 billion, down approximately 83% from the $8.8 billion it made in the second quarter of the previous year.
In light of this, company reported total revenues for the second quarter of $12.7 billion. Without contributions from Pfizer’s COVID portfolio, it is up 5%, but when Paxlovid and Comirnaty are included, it is down a startling 53% operationally.
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Defending and Growing level of profitability
On the call on Tuesday, Pfizer’s CFO David Denton gave more details about the cost-cutting plan. Denton stated that Pfizer is “committed to both defending and growing our overall level of profitability” and that the company is “well aware that our 2023 profit outlook is currently being dampened by incremental cost in support of our launches as well as higher R&D investments aligned with the company’s current revenue base.”
The business is “prepared to launch an enterprise-wide cost improvement program,” according to Denton if COVID-19 revenues fall short of Pfizer’s projections. This program will be created to help us achieve our goal of increasing our operating profit margin, and we anticipate seeing benefits in 2024, said Denton.
On upcoming earnings calls, the company will provide more information about the anticipated cost reductions, according to Denton. Whether these possible cost reductions are connected to a wave of Pfizer layoffs in Illinois is unknown. Pfizer recently said it would be eliminating 69 positions at a Wyeth facility in Lake Forest, Illinois, in a WARN notice.
