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Shares of global pharma giant Pfizer (PFE) slipped in the first trading session after the company cut its full-year revenue outlook by $9 billion acknowledging a sharp slump likely after the fall in demand for COVID-related products.
The New York-based company has reversed its August prediction of a rebound in the second half of 2023, an Associated Press report says. The firm says that the global usage of Paxlovid, the company's oral COVID vaccine, is trending slightly above last year. But it was still below expectations.
Prizer stock price slipped about 3 percent before the opening bell on Monday and Moderna (MRNA), another pharma company that competes with Prizer also suffered a downward price movement.
Although the fall vaccination season has gotten underway, Prizer thinks its too early to predict the demand, according to the report.
The AP report adds:
Full-year revenue for Paxlovid and Comirnaty is expected to be approximately $12.5 billion, short $9 billion of what it had expected.
Pfizer is lowering its full-year revenue expectations for Paxlovid by approximately $7 billion. That number also accounts for delayed commercialization of the product, which was pushed to January 2024 from the company's previous expectation of commercialization in the second half of this year. Pfizer is also lowering its 2023 revenue expectations for Comirnaty by approximately $2 billion due to lower-than-expected vaccination rates.
Pfizer Inc. now foresees 2023 revenue in a range of $58 billion to $61 billion, down from its prior forecast for $67 billion to $70 billion. It now projects full-year adjusted earnings between $1.45 and $1.65 per share due to lower-than-anticipated revenue for COVID-19-related products and inventory write-offs.
That is short of the full-year revenue of $63.61 billion and earnings of $2.77 per share that Wall Street was expecting, and far short of the company's previous projections of per-share earning between $3.25 and $3.45.
JPMorgan said the company's update solves an ongoing U.S. Paxlovid inventory debate and it anticipates the company's bigger-than-expected cuts to its sales projections will help put a floor under per-share earnings expectations for next year.