Pfizer Launches New COVID-19 Vaccine, Axes NASH Candidate in $27B Q2
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COVID-19 has been remarkably profitable for Pfizer over the last year-and-a-half, and this year’s second-quarter report is no different. The company’s revenue jumped by 47% to $27.7 billion compared to the same period in 2021.
The COVID-19 vaccine with partner BioNTech raked in $8.8 billion in revenue for the quarter alone and is projecting $32 billion for the year. And the company’s COVID-19 antiviral therapy, Paxlovid, is projected to bring in $22 billion this year, having brought in $8.1 billion for the quarter.
“In multiple meaningful ways, we made significant progress this quarter on our strategies to bring value to our patients and shareholders, while also making commitments to prioritize the broader needs of the world, including those of the environment and our most vulnerable populations,” Albert Bourla, Pfizer’s chairman and CEO stated. “For example, we set an ambitious goal for ourselves to achieve the Net-Zero Standard for greenhouse gas emissions by 2040, ten years ahead of the timeline described in the standard. We also launched an initiative to help bring all of our current and future patented medicines and vaccines to the 1.2 billion people living in 45 lower-income countries around the world at not-for-profit prices, a first in the industry.”
The focus on non-fiscal accomplishments makes it seem as if Bourla doesn't want to harp on the financial success of the company during the pandemic, noting that in the second quarter the company “recorded the largest amount of quarterly sales in our history.”
Even David Denton, the company’s chief financial officer and executive vice president, noted, “I am very pleased with the performance of our business this quarter, with strong operational revenue and earnings growth driven by multiple therapeutic areas across the company.” Denton focused less on the dollars and more on “our COVID-19 franchises continuing to serve patients in need while also propelling us to an all-time high in quarterly sales.”
Adjusted earnings for the quarter exceeded expectations, with stocks hitting $2.04 per share, a 92% increase from the same period the year before and significantly higher than the Wall Street consensus forecast of $1.79 per share. Revenue exceeded expectations as well, with $27.42 billion compared to analyst projections of $25.8 billion.
New COVID Vaccine Candidate Launched, NASH Treatment Axed
As reported Wednesday, Pfizer and BioNTech aren’t backing off on the vaccines, either. The U.S. government has decided the near-term strategy is bivalent vaccines that can stimulate immunity for the wild-type Wuhan strain as well as some variations of Omicron.
To that end, Pfizer and BioNTech launched a Phase II trial of an "enhanced" COVID-19 vaccine, a next-generation bivalent candidate, BNT162b5, made up of mRNA coding for enhanced prefusion spike proteins for the Wuhan strain and an Omicron variant. The spike protein has been modified to increase immune response. In June, they reported pivotal data on two Omicron-adapted vaccine candidates, which they have already begun manufacturing at risk so they can begin delivery as soon as authorized.
Despite the heady financial news, Pfizer, as many companies do in their quarterly reports, gave a pipeline update on which drugs they abandoned. In this case, a drug for nonalcoholic steatohepatitis (NASH), called danuglipron, has been axed.
NASH is a fatty-liver disease that has been a tough nut to crack for the industry. It can lead to cirrhosis of the liver, but in people who drink little or no alcohol. It is also associated with obesity and diabetes. In the case of this drug, a GLP1 agonist, the company reported it had abandoned the drug program for NASH, although it appears to still be in development for obesity and diabetes.
M&A and Reinvestment
With such a large jump in revenue, it’s no surprise Pfizer is finding uses for the funds. Broadly, this split into two categories, reinvesting into new initiatives and returning money to shareholders.
For the first category, it has invested $5.1 billion in internal R&D projects, and $7 billion was used to complete deals, including $6.3 billion to buy Arena Pharmaceuticals. On the shareholder end, the company spent $4.5 billion on a cash dividend or $0.80 per share of common stock, and $2.0 billion was used to repurchase 39.1 million shares on the open market.
Investors are always interested in merger-and-acquisition (M&A) activity, and in addition to the Arena buyout, Pfizer has announced acquisitions in the last six months of ReViral, which closed in the third quarter, and Biohaven Pharmaceutical Holding Company. Together, they will require an upfront capital of $13.3 billion.
The deal was originally announced in September 2021, when Pfizer granted an exclusive license for brepocitinib and ropsacitinib to Priovant. Pfizer holds a 25% equity ownership interest in Priovant.
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