The additional cuts, which will primarily occur between 2027 and 2029, will cost some $6 billion as the pharma tries to ride out a post-COVID headache while facing stiff patent headwinds for major products like the blood thinner Eliquis.
Pfizer is adding another $2.5 billion in cuts to an ongoing restructuring, with much of the new reduction coming in the form of “technology and simplification efforts” across the New York pharma’s commercial, R&D and manufacturing functions.
The cuts that fall under Pfizer’s Realigning Our Cost Base Program will save an anticipated $1 billion, Pfizer announced on Tuesday in its second quarter earnings release. The savings will primarily occur between 2027 and 2029.
Prior to Tuesday’s announcement, Pfizer had expected savings from this program to be $5.7 billion by the end of 2026. The new program extends that through 2029 with total savings of $6.7 billion.
Elsewhere, Pfizer is working to reduce the cost of goods sold across the organization. Here, the company has added another $1.5 billion in expected savings through “product portfolio enhancements and additional operational efficiencies,” according to Tuesday’s release. These savings will also be achieved from 2027 through 2029.
The first phase of this program was expected to save $1.5 billion through the end of 2027, bringing the anticipated total to $3 billion after today’s announcement.
Pfizer has been conducting the restructuring as a way to ride out a post-COVID headache. After going all in on vaccines and treatments for the pandemic disease and quickly offering one of the world’s top selling pharma products with the mRNA shot Comirnaty, the company has been struggling to redirect. Pfizer is also facing stiff patent headwinds for major products like the blood thinner Eliquis.
The cost savings program was originally launched in October 2023 after multiple quarters of declining revenue. It has since ratcheted up with billions in expected savings added each quarter.
The intended savings don’t come for free, of course. Under the Realigning Our Cost Base Program, Pfizer will incur a one-time cost of $2 billion, for “digital enablement, implementation and severance,” the pharma said. A company spokesperson declined to provide additional details on how the severance will be paid out, whether any jobs will be affected and what technological changes are being made.
Pfizer will have to spend even more to achieve the manufacturing savings expected. The program will come with a one-time $4 billion cost, which will include about 60% non-cash expenditures and asset write downs and 40% cash expenditures for severance, implementation and exit costs, the company said.
Pipeline cuts and mixed earnings
In addition to Pfizer’s post-COVID woes, the pharma’s pipeline has also suffered a series of high-profile blows, with much of the pharma’s obesity work failing to achieve success in the clinic. To replace that portion of the pipeline, Pfizer participated in a high-profile bidding war against Novo Nordisk for Metsera in 2025, ultimately winning the prize for around $10 billion.
On Tuesday, however, Pfizer revealed multiple pipeline cuts, including the Metsera asset MET-224o, renamed PF'6796 after the acquisition. The oral GLP-1 RA peptide had been undergoing a Phase 1 trial.
“We remain committed to exploring oral peptide and small molecule approaches for agonism of the GLP-1 receptor,” the spokesperson said.
The company will also discontinue the Phase 2 GIPR antagonist PF-07976016 after reviewing data from Novo’s liraglutide, a spokesperson confirmed, adding the Pfizer will continue to explore other ways to target the GIP receptor. Pfizer had been developing PF-07976016 in combination with Chinese biotech YaoPharma’s YP05002.
As for the company’s marketed products, the second quarter brought in a total of $15 billion in revenue—a number BMO Capital Markets dubbed a “mixed beat.” Eliquis and Comirnaty performed well against consensus, with revenue of $2.43 billion and $261 million, respectively. Oncology blockbuster Padcev also contributed $667 million for a 6% overperformance.
RBC Capital Markets was more positive, calling the 5% revenue increase, when excluding the COVID products, a “solid” beat.
The performance of Pfizer’s non-COVID products and the new $2.5 billion in savings announced today “should support improving sentiment,” BMO wrote.
Executives will host a conference call at 10 a.m. ET, where BMO expects the focus to be on loss of exclusivity headwinds, upcoming pipeline catalysts and the cost savings program.
