Pfizer beats earnings estimates, targets $2.5 billion in additional cost cuts

Pfizer reported better-than-expected second-quarter results on Tuesday, powered by strong demand for blood thinner Eliquis and recently acquired drugs, and announced plans for an additional $2.5 billion in cost-cutting. The New York-based drugmaker expects $9.7 billion in total net savings from its cost reductions through 2029 as it seeks to offset declining COVID-related revenue and restore sustainable growth. The company is counting on newer medicines to lessen its dependence on aging blockbuster drugs, while investors are watching for signs that its $10 billion acquisition of Metsera can help establish a meaningful foothold in the fast-growing obesity market that some analysts see topping $150 billion annually in the coming decade. Pfizer has said it expects to return to stronger growth after 2028. Its shares rose 2.3%. Pfizer's longer-term growth ambitions suffered a setback in June, when sigvotatug vedotin, one of the key drugs picked up in the $43 billion Seagen acquisition, failed to improve overall survival in a late-stage trial of previously treated lung cancer patients. The company has said it is confident in the potential of the drug in patients who received only one prior course of treatment. It is also testing sigvotatug vedotin in a late-stage trial in combination with Merck's blockbuster immunotherapy Keytruda as a first-line treatment. Pfizer's once-monthly weight-loss injection berobenatide, the most advanced candidate from its Metsera acquisition, has produced up to 12.3% weight loss in patients without diabetes in a trial, but raised tolerability questions. In June, the drug showed a side-effect profile similar to Novo Nordisk's Wegovy injection in a mid-stage trial. "The near term Pfizer story remains challenging given the multiple large patent expirations the company is facing, but we believe continued progress both commercially and with the pipeline should help increase investor interest," Guggenheim analysts said in a note. The company now expects full-year sales of $60.5 billion to $62.5 billion, up from $59.5 billion to $62.5 billion forecast previously. It reaffirmed its 2026 profit forecast of $2.80 to $3.00 per share despite the $650 million upfront payment in May for a licensing deal with China's Innovent Biologics to develop a dozen cancer medicines. Sales of Eliquis, which Pfizer shares with Bristol Myers Squibb, rose about 21% to $2.43 billion in the quarter, above analysts' estimates of $1.93 billion. Sales of cancer therapy Padcev rose 23% to $667 million, above expectations of about $634 million. Higher sales of Eliquis and Padcev helped offset lower demand for COVID products. Pfizer reported a net loss of four cents per share for the quarter due to charges related to drug acquisitions and a $3.8 billion impairment on experimental lung cancer therapy sigvotatug vedotin. On an adjusted basis, the company reported a profit of 77 cents per share, topping analysts' estimates by 9 cents. Chief Executive Albert Bourla said in an interview that through its restructuring programs, the company has cut administrative, sales and marketing expenses 3% in the first half of the year, but it is spending 12% more on research and development year over year. "We are creating efficiencies, particularly in areas of enabling functions like finance, legal, HR ... and we reinvest in R&D," Bourla said. He said the company has already made its big M&A moves in areas such as cancer and obesity. Pfizer has roughly $6 billion of dealmaking capacity remaining and will now focus on smaller bolt-on deals across a range of therapeutic areas, he said. Bourla said Pfizer plans to maintain its dividend and resume dividend increases after working through a wave of upcoming patent expirations. The company is seeking a new chief financial officer as Dave Denton is set to depart later this month.

Pfizer beats earnings estimates, targets $2.5 billion in additional cost cuts

Quarterly results and cost cuts

Pipeline, guidance and analyst view

Sales performance and earnings details

CEO comments on restructuring and dealmaking

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