Stock prices for the pharmaceutical giant Pfizer fell after the company issued 2024 profit and revenue guidance that was short of Wall Street expectations due to a continued decline in demand for COVID-related products.
Pfizer shares tumbled to their lowest close in more than nine years, after the giant drugmaker overestimated Covid-19 vaccine use and the company was forced to warn about its prospects.Shares fell 6.7% on Wednesday because the company, which has lost $140 billion in market cap this year, said its revenue could fall next year and issued 2024 guidance below analyst expectations.The warning deepened Wall Street’s concerns about how one of the world’s biggest pharmaceutical companies would find new sources of sales growth and has set up a big test for Chief Executive Officer Albert Bourla.Pfizer—and Bourla—enjoyed heady performance during the pandemic, when the company’s Covid-19 vaccine Comirnaty and drug Paxlovid powered tens of billions of dollars in sales and turned the pharmaceutical giant into a world savior.But the end of the pandemic crisis has stung Pfizer, which counted on higher sales of the vaccine and drug while it rolled out a new cancer and other drugs.
Pfizer’s plans to parlay covid profits into profit-making vaccines for other respiratory illnesses doesn’t appear to be working out as hoped.
Pfizer used some of its COVID windfall to acquire companies, including a $43 billion deal for cancer drugmaker Seagen it expects to close this week, and began selling a new [respiratory syncytial virus] RSV vaccine. But the recent RSV launch has been disappointing, trailing a rival’s shot, and shares have fallen 44% so far this year.In addition, COVID vaccinations in the U.S. have dropped sharply with just about 17% of the eligible population getting the most recent updated boosters due in part to declining concern about the virus, as well as vaccine fatigue.The New York-based drugmaker also forecast 2024 adjusted profit in the range of $2.05 to $2.25 per share, lower than analysts’ expectation of $3.16.
Interestingly, the Centers for Disease Control and Prevention (CDC) has just issued a Health Alert Advisory to increase vaccination rates against the flu, COVID-19 and RSV (respiratory syncytial virus) as cases have increased and vaccination rates remain low.
The CDC issued a Health Alert Network Health Advisory, warning the low vaccination rates and increasing rates of respiratory illness could lead to capacity strain at hospitals in the coming weeks.The alert is directed at healthcare providers to make an increased push to get patients immunized, as well as increasing the use of antiviral medications for treatment.In a release, the CDC said hospitalizations among all age groups has increased by 200 percent for the flu, 51 percent for COVID-19 and 60 percent for RSV across the country over the past four weeks.A map of respiratory illness activity provided by the CDC shows much of that activity coming from states like California, New Mexico and southeastern states from Louisiana to South Carolina. In Iowa and much of the Midwest, the activity level is showing as low to minimal.
It is wise for Pfizer to be conservative in future projections. The covid vaccines were touted as stopping transmission and forced upon millions of healthy young adults and children who were not at risk of severe health effects from infection. This has led to massive distrust in all vaccines, especially new ones directed at respiratory viruses.
This alert is not going to be the successful ploy to boost Pfizer that the CDC is hoping for.
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