NEW YORK–(BUSINESS WIRE)–Pfizer Inc. (NYSE: PFE) reported financial results for the second quarter of 2024 and raised its full-year 2024 guidance(1) for both Revenues and Adjusted(2) diluted EPS.
The second-quarter 2024 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: “We are driving progress toward our 2024 strategic priorities through solid execution across the company. I am pleased with the strong performance of our product portfolio in the second quarter led by several of our acquired products, key in-line brands and recent commercial launches. Notably, we achieved exceptional growth in our Oncology portfolio, with strong revenue contribution from our legacy-Seagen products.
“Overall, I am encouraged by our performance in the first half of 2024 and we remain focused on making a difference in the lives of patients as we continue to advance and strengthen our company.”
David Denton, Chief Financial Officer and Executive Vice President, stated: “This was Pfizer’s first quarter of topline revenue growth, on a year-over-year basis, since the fourth quarter of 2022 when our COVID revenues peaked. Importantly, the strong 14% operational revenue growth of our non-COVID products in the second quarter demonstrates our continued focus on commercial execution. In support of our stated strategic priority to realign our cost base, we continue to progress our cost realignment program. Additionally, with our more recent announcement of the first phase of our Manufacturing Optimization Program, we believe we are setting the foundation for future margin expansion.”
OVERALL RESULTS
In the first quarter of 2024, Pfizer reclassified royalty income (substantially all of which is related to our Biopharma segment) from Other (income)/deductions––net to revenues and began presenting Royalty revenues as a separate line item within Total revenues in our consolidated statements of operations. Prior-period amounts have been recast to conform to the current presentation.
At the beginning of 2024, Pfizer made changes in our commercial organization to incorporate Seagen Inc. (Seagen) and improve focus, speed and execution. Specifically, within our Biopharma reportable segment Pfizer created the Pfizer Oncology Division, the Pfizer U.S. Commercial Division, and the Pfizer International Commercial Division. See the Item 1. Business––Commercial Operations section of Pfizer’s 2023 Annual Report on Form 10-K (available at www.pfizer.com).
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).
Results for the second quarter and first six months of 2024 and 2023(8) are summarized below.
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($ in millions, except per share amounts) |
Second-Quarter |
Six Months |
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2024 |
2023 |
Change |
2024 |
2023 |
Change |
||||
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Revenues |
$ |
13,283 |
$ |
13,007 |
2% |
$ |
28,162 |
$ |
31,492 |
(11%) |
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Reported(4) Net Income |
|
41 |
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2,327 |
(98%) |
|
3,156 |
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7,870 |
(60%) |
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Reported(4) Diluted EPS |
|
0.01 |
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0.41 |
(98%) |
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0.55 |
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1.38 |
(60%) |
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Adjusted(2) Income |
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3,400 |
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3,839 |
(11%) |
|
8,074 |
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10,876 |
(26%) |
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Adjusted(2) Diluted EPS |
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0.60 |
|
0.67 |
(11%) |
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1.42 |
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1.90 |
(25%) |
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REVENUES
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($ in millions) |
Second-Quarter |
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Six Months |
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2024 |
2023 |
% Change |
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2024 |
2023 |
% Change |
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Total |
Oper. |
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Total |
Oper. |
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Global Biopharmaceuticals Business (Biopharma) |
$ |
12,991 |
$ |
12,690 |
2% |
4% |
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$ |
27,595 |
$ |
30,863 |
(11%) |
(10%) |
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Pfizer CentreOne (PC1) |
|
278 |
|
307 |
(10%) |
(9%) |
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535 |
|
615 |
(13%) |
(13%) |
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Pfizer Ignite |
|
15 |
|
10 |
47% |
47% |
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|
32 |
|
14 |
* |
* |
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TOTAL REVENUES |
$ |
13,283 |
$ |
13,007 |
2% |
3% |
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$ |
28,162 |
$ |
31,492 |
(11%) |
(10%) |
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* Indicates calculation not meaningful. |
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2024 FINANCIAL GUIDANCE(1)
Pfizer raises full-year 2024 revenue guidance by $1 billion at the midpoint to a range of $59.5 to $62.5 billion and raises Adjusted(2) diluted EPS guidance by $0.30 at the midpoint to $2.45 to $2.65. The company’s updated guidance for revenue includes approximately $8.5 billion in anticipated revenues for Comirnaty(3) and Paxlovid, approximately $5 billion and $3.5 billion, respectively. Including the contribution from Seagen and excluding revenues from Comirnaty(3) and Paxlovid, Pfizer now expects to achieve full-year 2024 operational revenue growth of 9% to 11% compared to 2023 revenues, up from 8% to 10% provided on January 30, 2024.
The updated 2024 Adjusted(2) diluted EPS guidance takes into consideration our strong first half performance as well as our continued confidence in the underlying strength of our business.
Pfizer’s updated financial guidance(1) is presented below.
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Revenues |
$59.5 to $62.5 billion |
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(previously $58.5 to $61.5 billion) |
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Adjusted(2) SI&A Expenses |
$13.8 to $14.8 billion |
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Adjusted(2) R&D Expenses |
$11.0 to $12.0 billion |
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Effective Tax Rate on Adjusted(2) Income |
Approximately 13.0% |
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(previously approximately 15.0%) |
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Adjusted(2) Diluted EPS |
$2.45 to $2.65 |
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(previously $2.15 to $2.35) |
Changes in foreign exchange rates have had a minimal incremental impact since full-year 2024 guidance was updated on May 1, 2024. Please refer to Press Release Footnote (1) for additional information.
CAPITAL ALLOCATION
During the first six months of 2024, Pfizer deployed its capital in a variety of ways, which primarily include the following two categories:
- Reinvesting capital into initiatives intended to enhance the future growth prospects of the company, including:
- $5.2 billion invested in internal research and development projects, and
- Approximately $200 million invested in business development transactions.
- Returning capital directly to shareholders through $4.8 billion of cash dividends, or $0.84 per share of common stock.
No share repurchases were completed to date in 2024. As of July 30, 2024, Pfizer’s remaining share repurchase authorization is $3.3 billion. Current financial guidance does not anticipate any share repurchases in 2024.
Second-quarter 2024 diluted weighted-average shares outstanding used to calculate Reported(4) and Adjusted(2) diluted EPS were 5,696 million shares.
QUARTERLY FINANCIAL HIGHLIGHTS (Second-Quarter 2024 vs. Second-Quarter 2023)
Second-quarter 2024 revenues totaled $13.3 billion, an increase of $277 million, or 2%, compared to the prior-year quarter, reflecting an operational increase of $447 million, or 3%, primarily due to growth contributions from several of our acquired products, key in-line products, and recent commercial launches, which more than offset both an expected decline in Comirnaty(3) revenues globally and an unfavorable impact of foreign exchange of $170 million, or 1%. Excluding contributions from Comirnaty(3) and Paxlovid, revenues totaled $12.8 billion, an increase of $1.6 billion, or 14%, operationally compared with the prior-year quarter.
Second-quarter 2024 Comirnaty(3) revenues of $195 million declined $1.3 billion, or 87%, operationally compared with the prior-year quarter, driven largely by lower contractual deliveries and demand in international markets, reflecting the anticipated seasonality of demand for vaccinations and as certain markets, including the U.S., transition to traditional commercial market sales.
Second-quarter 2024 Paxlovid revenues of $251 million increased $112 million, or 79%, operationally compared with the prior-year quarter, driven primarily by no second quarter 2023 U.S. sales in anticipation of transition to commercial markets in the second half of 2023, as well as increases in infections and demand in certain international markets in the second quarter of 2024.
Excluding contributions from Comirnaty(3) and Paxlovid, second-quarter 2024 operational revenue growth was driven primarily by:
- Global revenues of $845 million from legacy Seagen, which was acquired in December of 2023;
- Vyndaqel family (Vyndaqel, Vyndamax, Vynmac) globally, up 71% operationally, driven largely by continued strong demand, primarily in the U.S. and international developed markets;
- Eliquis globally, up 8% operationally, driven primarily by continued oral anti-coagulant adoption and market share gains in the non-valvular atrial fibrillation indication in the U.S. and certain markets in Europe, partially offset by declines due to loss of patent-based exclusivity and generic competition in certain international markets; and
- Nurtec ODT/Vydura globally, up 44% operationally, driven primarily by strong demand in the U.S. as well as recent launches in international markets;
partially offset primarily by lower revenues for:
- Xeljanz globally, down 34% operationally, driven primarily by decreased prescription volumes globally resulting from ongoing shifts in prescribing patterns related to label changes, as well as lower net price in the U.S. due to unfavorable changes in channel mix and the impact of regulatory exclusivity expiry in Canada; and
- Ibrance globally, down 8% operationally, driven primarily by lower demand due to competitive pressure globally and price decreases in certain international developed markets, partially offset by increased clinical trial supply orders in certain international developed markets versus prior year.
GAAP Reported(4) Statement of Operations Highlights
SELECTED REPORTED(4) COSTS AND EXPENSES
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($ in millions) |
Second-Quarter |
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Six Months |
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2024 |
2023 |
% Change |
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2024 |
2023 |
% Change |
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Total |
Oper. |
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Total |
Oper. |
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Cost of Sales(4) |
$ |
3,300 |
$ |
3,237 |
2% |
5% |
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$ |
6,679 |
$ |
8,122 |
(18%) |
(15%) |
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Percent of Revenues |
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24.8% |
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24.9% |
N/A |
N/A |
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23.7% |
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25.8% |
N/A |
N/A |
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SI&A Expenses(4) |
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3,717 |
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3,497 |
6% |
7% |
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7,212 |
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6,914 |
4% |
5% |
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R&D Expenses(4) |
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2,696 |
|
2,648 |
2% |
2% |
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5,189 |
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5,153 |
1% |
1% |
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Acquired IPR&D Expenses(4) |
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6 |
|
33 |
(81%) |
(81%) |
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6 |
|
55 |
(88%) |
(88%) |
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Other (Income)/Deductions—net(4) |
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1,107 |
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(75) |
* |
* |
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1,787 |
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200 |
* |
* |
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Effective Tax Rate on Reported(4) Income |
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130.2% |
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(3.1%) |
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4.8% |
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7.5% |
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* Indicates calculation not meaningful. |
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Second-quarter 2024 Cost of Sales(4) as a percentage of revenues was relatively flat compared with the prior-year quarter, and reflects favorable changes in sales mix, primarily driven by lower sales of Comirnaty(3), which resulted in a lower related charge for the 50% gross profit split with BioNTech and applicable royalty expenses in the quarter; offset by the amortization of the fair value step-up of inventory related to the Seagen acquisition.
Second-quarter 2024 SI&A Expenses(4) increased 7% operationally compared with the prior-year quarter, driven primarily by an increase in marketing and promotional expenses for recently launched and acquired products.
Second-quarter 2024 R&D Expenses(4) increased 2% operationally compared with the prior-year quarter, primarily due to increased spending to develop certain medicines acquired from Seagen, partially offset by lower spending primarily as a result of our cost realignment program.
The unfavorable period-over-period change in Other deductions—net(4) of $1.2 billion for the second quarter of 2024, compared with the prior-year quarter, was driven primarily by net losses on equity securities in the second quarter of 2024 versus net gains on equity securities recognized in the prior-year quarter, higher net interest expense and intangible asset impairment charges in the second quarter of 2024.
Pfizer’s effective tax rate on Reported(4) income for the second quarter of 2024 increased compared to the prior-year quarter primarily due to the non-recurrence of tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years in the second quarter of 2023, partially offset by a favorable change in the jurisdictional mix of earnings in the second quarter of 2024.
Adjusted(2) Statement of Operations Highlights
SELECTED ADJUSTED(2) COSTS AND EXPENSES
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($ in millions) |
Second-Quarter |
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Six Months |
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2024 |
2023 |
% Change |
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2024 |
2023 |
% Change |
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Total |
Oper. |
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Total |
Oper. |
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Adjusted(2) Cost of Sales |
$ |
2,768 |
$ |
3,072 |
(10%) |
(6%) |
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$ |
5,804 |
$ |
7,818 |
(26%) |
(23%) |
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Percent of Revenues |
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20.8% |
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23.6% |
N/A |
N/A |
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20.6% |
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24.8% |
N/A |
N/A |
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Adjusted(2) SI&A Expenses |
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3,669 |
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3,419 |
7% |
8% |
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7,123 |
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6,769 |
5% |
6% |
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Adjusted(2) R&D Expenses |
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2,671 |
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2,627 |
2% |
2% |
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|
|
5,147 |
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5,118 |
1% |
1% |
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Adjusted(2) Other (Income)/Deductions—net |
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258 |
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(278) |
* |
* |
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555 |
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(601) |
* |
* |
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Effective Tax Rate on Adjusted(2) Income |
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12.9% |
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6.8% |
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15.1% |
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11.6% |
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* Indicates calculation not meaningful. |
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See the reconciliations of certain Reported(4) to non-GAAP Adjusted(2) financial measures and associated footnotes in the financial tables section of this press release located at the hyperlink below.
RECENT NOTABLE DEVELOPMENTS (Since May 1, 2024)
Product Developments
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Product/Project |
Recent Development |
Link |
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Adcetris |
July 2024. Pfizer’s supplemental Biologics License Application (sBLA) for Adcetris in combination with lenalidomide and rituximab for patients with relapsed/refractory large B-cell lymphoma was accepted for review by the U.S. Food and Drug Administration (FDA). The FDA has set a Prescription Drug User Fee Act (PDUFA) action date of March 2025. If approved, this would be the eighth FDA-approved indication for Adcetris. |
N/A |
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June 2024. Presented detailed overall survival (OS) results from the investigational Phase 3 ECHELON-3 study of Adcetris in combination with lenalidomide and rituximab for the treatment of patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL) at the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting. Detailed data from the study demonstrated the investigational Adcetris regimen reduced risk of death by 37 percent compared to chemotherapy alone, resulting in median OS of 13.8 months versus 8.5 months. The most frequently reported treatment-emergent adverse events Grade 3 or higher for the Adcetris versus placebo arms were neutropenia, thrombocytopenia and anemia. |
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June 2024. Takeda and Pfizer announced positive results from the Phase 3 HD21 trial evaluating Adcetris in combination with intensive chemotherapy. The four-year analysis conducted and presented by the German Hodgkin Study Group (GHSG) at the 2024 ASCO Annual Meeting and at the European Hematology Association (EHA) Annual Meeting showed superior progression-free survival (PFS) and improved tolerability for patients with newly diagnosed Stage IIb/III/IV classical Hodgkin Lymphoma compared to escalated doses of bleomycin, etoposide, doxorubicin, cyclophosphamide, vincristine, procarbazine, prednisone (eBEACOPP), a current standard of care regimen predominantly used in Europe in this setting. |
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Comirnaty(3) |
June 2024. Announced the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended marketing authorization for Pfizer and BioNTech’s Omicron JN.1-adapted monovalent COVID-19 vaccine (Comirnaty JN.1) for active immunization to prevent COVID-19 caused by SARS-CoV-2 in individuals 6 months of age and older. Subsequently, the European Commission (EC) authorized the vaccine on July 3, 2024. |
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Durveqtix |
July 2024. Announced the EC granted conditional marketing authorization for Durveqtix, a gene therapy for the treatment of severe and moderately severe hemophilia B (congenital factor IX deficiency) in adult patients without a history of factor IX inhibitors and without detectable antibodies to variant AAV serotype Rh74. This follows the EMA’s CHMP positive opinion adopted in May. Durveqtix has shown the potential to offer long-term bleed protection in a one-time dose, reducing or eliminating bleeds for appropriate patients with hemophilia B. The EC approval follows recent regulatory approvals by the FDA and Health Canada, where it is marketed as Beqvez. |
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Elrexfio |
June 2024. Presented detailed OS results from the Phase 2 MagnetisMM-3 study of Elrexfio in patients with heavily pretreated relapsed or refractory multiple myeloma (RRMM) who had not received prior B-cell maturation antigen (BCMA)-directed therapy (i.e., BCMA-naïve; Cohort A; n=123) at EHA 2024. With a median follow-up of 28.4 months (estimated by the reverse-Kaplan-Meier method), the study demonstrated a median OS of 24.6 months, with median PFS of 17.2 months for the full intent-to-treat cohort. The safety and tolerability of Elrexfio in MagnetisMM-3 were consistent with what have been previously observed. |
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Lorbrena |
May 2024. Presented longer-term follow-up results from the Phase 3 CROWN trial evaluating Lorbrena versus Xalkori (crizotinib) in people with previously untreated, anaplastic lymphoma kinase (ALK)-positive advanced non-small cell lung cancer (NSCLC) at the ASCO Annual Meeting that were simultaneously published in the Journal of Clinical Oncology. Updated results showed an unprecedented 60% of patients remain alive without disease progression after five years, along with continued 81% reduction in risk of progression or death and 94% reduction in progression of brain metastases compared to Xalkori. The safety profiles of Lorbrena and Xalkori in the five-year follow-up were consistent with previous findings, with no new safety signals reported for Lorbrena. |
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Pipeline Developments
A comprehensive update of Pfizer’s development pipeline was published today and is now available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of Pfizer’s research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.
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Product/Project |
Recent Development |
Link |
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danuglipron |
July 2024. Announced advancement of development of once-daily formulation of oral glucagon-like peptide-1 (GLP-1) receptor agonist, danuglipron. Based on results from the ongoing pharmacokinetic study (NCT06153758), the company has selected its preferred once-daily modified release formulation for danuglipron. With these results, and following a thorough analysis of previous Phase 2b data and trial design, Pfizer plans to conduct dose optimization studies in the second half of 2024 evaluating multiple doses of the preferred modified release formulation to inform the registration enabling studies. |
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fordadistrogene |
June 2024. Announced CIFFREO, a Phase 3 global, multicenter, randomized, double-blind, placebo-controlled study evaluating the investigational mini-dystrophin gene therapy, fordadistrogene movaparvovec, in ambulatory patients with Duchenne muscular dystrophy (DMD) did not meet its primary endpoint of improvement in motor function among boys 4 to 7 years of age treated with the gene therapy compared to placebo. Key secondary endpoints also did not show a significant difference between participants treated with fordadistrogene movaparvovec and placebo. |
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giroctocogene |
July 2024. Announced positive topline results from the Phase 3 AFFINE study (NCT04370054) evaluating giroctocogene fitelparvovec, an investigational gene therapy for the treatment of adults with moderately severe to severe hemophilia A. The AFFINE study achieved its primary objective of non-inferiority, as well as superiority, of total annualized bleeding rate (ABR) from Week 12 through at least 15 months of follow up post-infusion compared with routine Factor VIII (FVIII) replacement prophylaxis treatment. Key secondary endpoints as defined by the trial protocol were met and also demonstrated superiority compared to prophylaxis. Giroctocogene fitelparvovec was generally well tolerated in the study. Pfizer will discuss these data with regulatory authorities in the coming months. |
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Pandemic |
May 2024. Announced that preliminary results from a subset of patients randomized in a Phase 1 study (NCT06179446) evaluating the safety, tolerability, and immunogenicity of multiple doses of a nucleoside-modified mRNA (modRNA) based pandemic influenza vaccine candidate illustrated notable increases in antibody responses against the avian strain [H5, Clade 2.3.4.4b] of H5 influenza virus. Pfizer continues to monitor all developments regarding the circulation and outbreaks of the A/H5N1 virus. If a vaccine is needed in an emergency pandemic situation, Pfizer anticipates that the modRNA vaccine platform could be leveraged to rapidly provide a vaccine candidate targeting the specific pandemic influenza strain. |
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Corporate Developments
|
Topic |
Recent Development |
Link |
|
Board Election |
July 2024. Announced Cyrus Taraporevala was elected to Pfizer’s Board of Directors. Mr. Taraporevala was also appointed to and will join the Audit Committee and Compensation Committee of Pfizer’s Board. |
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Executive |
July 2024. Announced the launch of a process to identify a successor for Dr. Mikael Dolsten, Chief Scientific Officer and President, Pfizer R&D, who will depart the company after a 15+ year stellar career. Dr. Dolsten will assist in the external search for a new Chief Scientific Officer and continue to serve in his current position until his successor is in place and any necessary transition is complete. |
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May 2024. Announced Andrew Baum, M.D., would join the company as Chief Strategy and Innovation Officer, Executive Vice President, effective June 3, 2024, and will become a member of Pfizer’s Executive Leadership Team reporting to Chairman and Chief Executive Officer, Dr. Albert Bourla. In his role, Dr. Baum will be responsible for Pfizer’s long-term corporate strategic plan, and Pfizer’s portfolio analysis and prioritization functions, business development activities, strengthening of partnerships with the biotech ecosystem, and the commercial evaluation of the company’s research pipeline. |
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Manufacturing |
May 2024. Announced the launch of the first phase of a multi-year, multi-phase cost reduction program (the “Manufacturing Optimization Program” or “the program”) to reduce our cost of goods sold. The program is expected to include operational efficiencies, network structure changes, and product portfolio enhancements. The first phase of the program is focused on operational efficiencies and is expected to deliver savings of approximately $1.5 billion by the end of 2027, some of which is expected to begin being realized in 2025. The one-time costs to achieve the savings associated with the first phase of the program are expected to be approximately $1.7 billion and primarily include severance and implementation costs. These costs will be recorded primarily in 2024, with cash outlays expected primarily in 2025 and 2026. |
