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Pfizer Reports Second-Quarter 2023 Results

NEW YORK–(BUSINESS WIRE)–Pfizer Inc. (NYSE: PFE) reported financial results for the second quarter of 2023. The company narrowed its 2023 revenue guidance(4) range to $67 to $70 billion, while maintaining its outlook for Adjusted diluted EPS(3) of $3.25 to $3.45.


The second-quarter 2023 earnings presentation and accompanying prepared remarks from management as well as the quarterly update to Pfizer’s R&D pipeline can be found at www.pfizer.com.

EXECUTIVE COMMENTARY

Dr. Albert Bourla, Chairman and Chief Executive Officer, stated: “Pfizer has made significant progress toward our goal to launch 19 new products and indications in an 18-month span, having executed eleven launches thus far. We continue to build momentum in 2023, recently attaining key milestones for several products, including the U.S. launches of Prevnar 20 in pediatric patients and Zavzpret; U.S. approvals and launches for Abrysvo in older adults, Litfulo and the Talzenna plus Xtandi combination; U.S. approvals for Ngenla (expected to be available for prescribing this month) and Paxlovid; and U.S. regulatory filing acceptance for fidanacogene elaparvovec (Hemophilia B Gene Therapy).

Supporting our expectation to deliver robust operational growth in 2025 and beyond, we also reported data from several exciting pipeline candidates we believe have the potential to be significant future value-drivers, including Phase 3 data from marstacimab, Pfizer’s novel, investigational anti-TFPI antibody being studied for the treatment of hemophilia A or B; further data from elranatamab, Pfizer’s investigational BCMA CD3-targeted bispecific antibody currently being investigated in multiple myeloma; and first-in-human data from our pipeline of potential next-generation breast cancer treatments, including our novel CDK4, CDK2, and KAT6 inhibitors.

Finally, we continue to make progress toward our proposed acquisition of Seagen, a global biotechnology company that discovers, develops and commercializes transformative oncology medicines. In addition to receiving approval of the transaction from Seagen shareholders and planning for the potential integration of the two companies, we continue to work closely with regulators, including the Federal Trade Commission (FTC) and the European Commission (EC), and are working diligently to fulfill requests for further information from the FTC.

We look forward to continuing our progress in the second half of 2023, driven by commercial execution, scientific innovation and our never-ending commitment to delivering breakthroughs for patients.”

David Denton, Chief Financial Officer and Executive Vice President, stated: “The second quarter of 2023 delivered solid 5% operational revenue growth, excluding our COVID-19 products, and our year-to-date results are in line with our expectations. Despite a few near-term individual product revenue challenges, we believe the company is well positioned for accelerated growth of our non-COVID products in the second half of 2023. The COVID environment continues to evolve rapidly and remains highly unpredictable. In spite of this uncertainty, the company is maintaining its focus on ensuring successful fall vaccinations during the respiratory infection season.

During the second quarter we successfully closed a $31 billion debt offering, the net proceeds of which we intend to use as part of the financing for Pfizer’s proposed acquisition of Seagen. We continue to expect the transaction to close in late 2023 or early 2024, subject to the satisfaction of customary closing conditions. As we de-lever our capital structure after the close, we expect our strong balance sheet will continue to provide the flexibility for future dividend increases and share repurchases, as well as additional business development activity.”

Results for the second quarter of 2023 and 2022(5) are summarized below.

OVERALL RESULTS

 

     

 

   

 

   

 

   

 

   

 

   

 

($ in millions, except

per share amounts)

     

Second-Quarter

   

Six Months

 

     

2023

 

 

2022

 

 

Change

 

 

2023

 

 

2022

 

 

Change

Revenues

     

$ 12,734

   

$ 27,742

   

(54%)

   

$ 31,015

   

$ 53,402

   

(42%)

Reported Net Income(2)

     

2,327

   

9,906

   

(77%)

   

7,870

   

17,769

   

(56%)

Reported Diluted EPS(2)

     

0.41

   

1.73

   

(77%)

   

1.38

   

3.10

   

(56%)

Adjusted(3) Income

     

3,839

   

11,656

   

(67%)

   

10,876

   

20,993

   

(48%)

Adjusted(3) Diluted EPS

     

0.67

   

2.04

   

(67%)

   

1.90

   

3.66

   

(48%)

 

     

 

   

 

   

 

   

 

   

 

   

 

 
 

REVENUES

 

     

 

   

 

   

 

   

 

 

 

   

 

   

 

   

 

($ in millions)

     

Second-Quarter

 

Six Months

 

     

2023

 

 

2022

 

 

% Change

 

2023

 

 

2022

 

 

% Change

 

     

 

 

 

 

Total

 

 

Oper.

 

 

 

 

 

Total

 

 

Oper.

Global Biopharmaceuticals Business (Biopharma)(6)

     

$ 12,418

   

$ 27,425

   

(55%)

   

(54%)

 

$ 30,389

   

$ 52,748

   

(42%)

   

(40%)

Primary Care(6)

     

5,810

   

20,979

   

(72%)

   

(72%)

 

17,315

   

39,830

   

(57%)

   

(55%)

Specialty Care(6)

     

3,653

   

3,358

   

9%

   

12%

 

7,264

   

6,863

   

6%

   

10%

Oncology(6)

     

2,956

   

3,088

   

(4%)

   

(3%)

 

5,811

   

6,055

   

(4%)

   

(2%)

Business Innovation

     

$ 316

   

$ 317

   

   

 

$ 626

   

$ 655

   

(4%)

   

(3%)

TOTAL REVENUES

     

$ 12,734

   

$ 27,742

   

(54%)

   

(53%)

 

$ 31,015

   

$ 53,402

   

(42%)

   

(40%)

 

     

 

   

 

   

 

   

 

 

 

   

 

   

 

   

 

 

Beginning in the third quarter of 2022, Pfizer made several organizational changes to further transform its operations to better leverage its expertise in certain areas and in anticipation of potential future new product and indication launches. These changes included establishing a new commercial structure within Biopharma focused on three broad customer groups (primary care, specialty care and oncology)(6), optimizing Pfizer’s end-to-end R&D operations and further prioritizing its internal R&D portfolio, as well as realigning certain enabling and platform functions across the organization to ensure alignment with this new operating structure.

In addition, in the first quarter of 2023, Pfizer established an operating segment, Business Innovation, that includes Pfizer CentreOne (PC1), the company’s global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients; and Pfizer Ignite, a recently launched offering that provides strategic guidance and end-to-end R&D services to select innovative biotech companies that align with Pfizer’s R&D focus areas.

Prior period amounts have been revised to conform to the current period presentation for all changes discussed above.

Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts. References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates(7).

CAPITAL ALLOCATION

During the first six months of 2023, Pfizer deployed its capital in a variety of ways, which primarily include the following two categories:

No share repurchases have been completed to date in 2023. As of August 1, 2023, Pfizer’s remaining share repurchase authorization is $3.3 billion. Current financial guidance does not anticipate any share repurchases in 2023.

Second-quarter 2023 diluted weighted-average shares outstanding used to calculate Reported(2) and Adjusted(3) diluted EPS were 5,713 million shares.

2023 FINANCIAL GUIDANCE(4)

Pfizer narrowed its 2023 revenue guidance range to $67 to $70 billion, while maintaining its guidance for Adjusted diluted EPS(3). The Company’s updated guidance is presented below.

Revenues

$67.0 to $70.0 billion

(previously $67.0 to $71.0 billion)

Adjusted(3) Cost of Sales as a Percentage of Revenues

28.0% to 30.0%

Adjusted(3) SI&A Expenses

$13.8 to $14.8 billion

Adjusted(3) R&D Expenses

$12.4 to $13.4 billion

Acquired IPR&D Expenses(4)

Approximately $0.1 billion

Adjusted(3) Other (Income)/Deductions

Approximately $1.5 billion of income

Effective Tax Rate on Adjusted(3) Income

Approximately 15.0%

Adjusted(3) Diluted EPS

$3.25 to $3.45

Changes in foreign exchange rates have had a minimal incremental impact since full-year 2023 guidance was issued. Please refer to Press Release Footnote (4) for additional information.

The midpoint of the guidance range for revenues reflects a 31% operational decrease compared to 2022 revenues. Company revenues are anticipated to be lower in 2023 than in 2022 due to expected revenue declines for Pfizer’s COVID-19 products, partially offset by expected operational growth from our non-COVID-19 in-line portfolio, anticipated new product and indication launches and recently acquired products.

Excluding COVID-19 products, Pfizer is now expecting 6% to 8% operational revenue growth in 2023. This reduction of the Company’s previously stated expectation of 7% to 9% non-COVID operational revenue growth reflects certain short-term headwinds, such as the U.S. approval for the Talzenna plus Xtandi combination for the treatment of adult patients with homologous recombination repair (HRR) gene-mutated metastatic castration-resistant prostate cancer (mCRPC), versus an approval in the all-comers population; a shared clinical decision-making recommendation for Abrysvo from the U.S. Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP), versus a routine recommendation; and recent tornado damage to Pfizer’s manufacturing facility in Rocky Mount, N.C. Over the longer term, the Company expects these short-term headwinds to be resolved, with its revenue outlook remaining intact versus its 2030 ambitions.

Revenue guidance for Pfizer’s COVID-19 products is as follows:

The midpoint of the guidance range for Adjusted(3) diluted EPS reflects a 47% operational decrease compared to 2022, primarily driven by anticipated lower revenues from COVID-19 products, higher spending to support anticipated near-term launches and greater investment in certain late-stage pipeline projects.

Financial guidance for Adjusted(3) diluted EPS is calculated using approximately 5.72 billion weighted average shares outstanding, and assumes no share repurchases in 2023.

Pfizer’s 2023 financial guidance is based on estimates and assumptions that are subject to significant uncertainties, particularly with regard to the anticipated performance of Comirnaty(1) and Paxlovid. See the Overview of Our Performance, Operating Environment, Strategy and Outlook — Our 2022 Performance and — The Global Economic Environment sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in Pfizer’s 2022 Annual Report on Form 10-K; the Overview of Our Performance, Operating Environment, Strategy and Outlook — Our First Quarter Financial Performance and — The Global Economic Environment sections of MD&A in Pfizer’s Quarterly Report on Form 10-Q for the quarterly period ended April 2, 2023; and Pfizer’s fourth-quarter 2022 earnings press release (available at www.pfizer.com) for additional information.

QUARTERLY FINANCIAL HIGHLIGHTS (Second-Quarter 2023 vs. Second-Quarter 2022)

Second-quarter 2023 revenues totaled $12.7 billion, a decrease of $15.0 billion, or 54%, compared to the prior-year quarter, reflecting an operational decline of $14.7 billion, or 53%, primarily due to a decrease in Paxlovid and Comirnaty(1) revenues globally, as well as an unfavorable impact of foreign exchange of $283 million, or 1%. Excluding contributions from Comirnaty(1) and Paxlovid, company revenues grew $537 million, or 5%, operationally.

Second-quarter 2023 Paxlovid revenues declined $8.0 billion, or 98%, operationally compared with the prior-year quarter, primarily driven by no second quarter U.S. sales in anticipation of transition to traditional commercial markets in the second half of 2023, and lower contractual deliveries in most international markets.

Second-quarter 2023 Comirnaty(1) revenues declined $7.3 billion, or 82%, operationally compared with the prior-year quarter, largely driven by lower contracted deliveries and demand in international markets and lower U.S. government contracted deliveries, with anticipated transition to new variant vaccines globally and to traditional U.S. commercial market sales in the second half of 2023.

Excluding contributions from Comirnaty(1) and Paxlovid, second-quarter 2023 operational revenue growth was primarily driven by:

partially offset primarily by lower revenues for:

GAAP Reported(2) Income Statement Highlights

SELECTED REPORTED COSTS AND EXPENSES(2)

 

     

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

($ in millions)

     

Second-Quarter

 

 

Six Months

 

     

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

     

 

 

 

 

Total

 

 

Oper.

 

 

 

 

 

 

Total

 

 

Oper.

Cost of Sales(2)

     

$ 3,237

   

$ 8,648

   

(63%)

   

(65%)

 

 

$ 8,122

   

$ 18,632

   

(56%)

   

(57%)

Percent of Revenues

     

25.4%

   

31.2%

   

N/A

   

N/A

 

 

26.2%

   

34.9%

   

N/A

   

N/A

SI&A Expenses(2)

     

3,497

   

3,048

   

15%

   

16%

 

 

6,914

   

5,642

   

23%

   

25%

R&D Expenses(2)

     

2,648

   

2,815

   

(6%)

   

(5%)

 

 

5,153

   

5,116

   

1%

   

2%

Acquired IPR&D Expenses(2)

     

33

   

1

   

*

   

*

 

 

55

   

356

   

(85%)

   

(85%)

 

     

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

Other (Income)/Deductions––net(2)

     

(347)

   

772

   

*

   

*

 

 

(277)

   

1,122

   

*

   

*

Effective Tax Rate on Reported Income(2)

     

(3.1%)

   

13.7%

   

 

   

 

 

 

7.5%

   

13.4%

   

 

   

 

 

     

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

Second-quarter 2023 Cost of Sales(2) as a percentage of revenues decreased by 5.8 percentage points compared with the prior-year quarter, primarily driven by favorable changes in sales mix, including lower sales of Comirnaty(1) and, to a much lesser extent, by lower write-offs for Comirnaty(1) inventory that exceeded or was expected to exceed its approved shelf life prior to being used; partially offset by lower sales of Paxlovid.

Second-quarter 2023 SI&A Expenses(2) increased 16% operationally compared with the prior-year quarter, primarily reflecting increased investments to support recently acquired and launched products and the expected Paxlovid commercial launch, as well as an increase in deferred compensation savings plan expenses, partially offset by a lower provision for U.S. healthcare reform fees associated with lower sales of Paxlovid and Comirnaty(1).

Second-quarter 2023 R&D Expenses(2) decreased 5% operationally compared with the prior-year quarter, primarily driven by lower spending on programs to prevent and treat COVID-19 and a decrease in the value of the portfolio performance share grants reflecting the decrease in the price of Pfizer’s common stock in the second quarter of 2023; partially offset by increased investments to develop recently acquired assets and certain vaccine programs, as well as activities to support upcoming product launches.

Pfizer recorded $347 million of other income––net(2) in the second quarter of 2023 compared with $772 million of other deductions––net(2) in the second quarter of 2022. The period-over-period change was primarily driven by:

Pfizer’s effective tax rate on Reported income(2) for the second quarter of 2023 is negative primarily due to tax benefits in the second quarter of 2023 related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years and a favorable change in the jurisdictional mix of earnings.

Adjusted(3) Income Statement Highlights

SELECTED ADJUSTED(3) COSTS AND EXPENSES

 

     

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

($ in millions)

     

Second-Quarter

 

 

Six Months

 

     

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

     

 

 

 

 

Total

 

 

Oper.

 

 

 

 

 

 

Total

 

 

Oper.

Adjusted(3) Cost of Sales

     

$ 3,072

   

$ 8,625

   

(64%)

   

(66%)

 

 

$ 7,818

   

$ 18,582

   

(58%)

   

(58%)

Percent of Revenues

     

24.1%

   

31.1%

   

N/A

   

N/A

 

 

25.2%

   

34.8%

   

N/A

   

N/A

Adjusted(3) SI&A Expenses

     

3,419

   

2,900

   

18%

   

20%

 

 

6,769

   

5,396

   

25%

   

28%

Adjusted(3) R&D Expenses

     

2,627

   

2,811

   

(7%)

   

(6%)

 

 

5,118

   

5,106

   

   

1%

 

     

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

Adjusted(3) Other (Income)/Deductions––net

     

(551)

   

(377)

   

46%

   

25%

 

 

(1,079)

   

(783)

   

38%

   

24%

Effective Tax Rate on Adjusted(3) Income

     

6.8%

   

15.4%

   

 

   

 

 

 

11.6%

   

15.1%

   

 

   

 

 

     

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

Reconciliations of certain Reported(2) to non-GAAP Adjusted(3) financial measures and associated footnotes can be found in the financial tables section of the press release located at the hyperlink below.

RECENT NOTABLE DEVELOPMENTS (Since May 2, 2023)

Product Developments

Contacts

Media
PfizerMediaRelations@Pfizer.com
212.733.1226

Investors
IR@Pfizer.com
212.733.4848

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