Pfizer Inc. (PFE) exceeded Wall Street expectations in its fourth-quarter and full-year 2024 earnings report, bolstered by higher-than-anticipated sales of its COVID-19 products and aggressive cost-cutting measures. The pharmaceutical giant posted revenue of $17.76 billion for the quarter, surpassing analyst estimates of $17.36 billion, according to LSEG. Adjusted earnings per share came in at 63 cents, well above the expected 46 cents per share.
For the full year, Pfizer reported revenue of $63.6 billion, up 7% from 2023 and exceeding consensus estimates of $62.9 billion. Annual earnings per share reached $3.12, beating forecasts of $2.97. Despite the earnings beat, Pfizer shares remained relatively flat in early trading on Tuesday, reflecting investor concerns over the company's long-term revenue trajectory as demand for its COVID-related products wanes.
The earnings report marks a pivotal moment for Pfizer as it continues to manage the financial downturn from declining COVID-19 product sales. The company said it is on track to achieve net cost savings of approximately $4.5 billion by the end of 2025, with an additional $1.5 billion in savings expected by 2027 through downsizing manufacturing and reducing research and development expenses.
Pfizer's COVID antiviral treatment Paxlovid generated $727 million in revenue for the fourth quarter, exceeding analyst projections of $630.7 million, according to StreetAccount. The increase was attributed to heightened demand during a recent COVID wave in the U.S. and a one-time contract delivery of 1 million treatment courses to the federal government. Meanwhile, its COVID-19 vaccine generated $3.4 billion in revenue, surpassing expectations of $3 billion but reflecting a decline of $2 billion from the same period a year ago due to reduced global vaccinations and lower contracted doses.
Beyond COVID-related products, Pfizer's non-COVID portfolio also contributed to growth. Revenue from its newly acquired cancer drugs from Seagen, which Pfizer bought for $43 billion in 2023, reached $915 million for the quarter, up from just $132 million in the same period a year ago. Sales of Vyndaqel, a treatment for cardiomyopathy, surged 61% to $1.55 billion, exceeding estimates of $1.51 billion. Eliquis, the blood thinner co-marketed with Bristol Myers Squibb, generated $1.83 billion in revenue, surpassing expectations of $1.67 billion.
However, Pfizer faces several headwinds, including ongoing Medicare drug price negotiations. Following last year's negotiations for Eliquis, Medicare will set new pricing for additional Pfizer drugs in 2025, including breast cancer drug Ibrance and prostate cancer drug Xtandi. Additionally, potential policy shifts under the next administration could impact drug approvals and vaccine adoption, adding to market uncertainty.
Investor scrutiny remains focused on Pfizer's ability to sustain long-term growth, particularly as it integrates recent acquisitions and navigates patent expirations. The company's experimental weight-loss pill, danuglipron, initially expected to be a strong competitor in the GLP-1 market, has faced setbacks. While Eli Lilly's (LLY) GLP-1 pill has progressed in clinical trials, Pfizer has yet to release final weight-loss efficacy data following the conclusion of its Phase I trial in January.
Despite these challenges, CEO Albert Bourla remained optimistic about the company's strategic direction. "I'm excited for what's ahead and confident that we will enhance shareholder value as we sharpen our focus to improve the productivity of our R&D pipeline and advance the clear strategic priorities guiding our company in 2025," Bourla said in a statement.
Additionally, Pfizer has avoided a potential proxy battle with activist investor Starboard Value, which holds a $1 billion stake in the company. The deadline for nominating board members passed without a challenge, providing the pharmaceutical giant some stability amid broader industry turbulence.
