• Pfizer on Tuesday reported second-quarter adjusted earnings that topped Wall Street's expectations, but posted revenue that came in under estimates due to a steep drop in Covid product sales.
• Pfizer is in a transition period as it pivots away from its blockbuster coronavirus vaccine and Covid antiviral drug Paxlovid while the world emerges from the pandemic.
• The New York-based company will hold a conference call at 10 a.m. ET on Tuesday. 

Pfizer on Tuesday reported second-quarter adjusted earnings that topped Wall Street's expectations, but posted revenue that fell short of estimates due to a plunge in Covid product sales.

Pfizer reported second-quarter sales of $12.73 billion, down 54% from the same period a year ago.

The company's Covid vaccine raked in $1.49 billion in sales, down 83% from the year-ago quarter. Pfizer's Covid antiviral pill Paxlovid posted $143 million in revenue, a drop of 98%.

Together, the products pulled in $1.6 billion in revenue for the quarter. That compares with roughly $17 billion in sales during the same period a year ago.

"The contraction in revenues was driven by the anticipated decline in Paxlovid and Comirnaty sales," Pfizer CFO David Denton said during an earnings call on Tuesday. 

The decline isn't a surprise. Pfizer and rival drugmakers like Moderna have seen a steep drop in Covid-related sales this year as the world emerges from the pandemic and relies less on blockbuster vaccines and treatments that help protect against the virus.

Here's how Pfizer results compared with Wall Street expectations, based on a survey of analysts by Refinitiv:

• Earnings per share: 67 cents per share adjusted, vs. 57 cents per share expected
• Revenue: $12.73 billion, vs. $13.27 billion expected

Pfizer booked net income of $2.33 billion, or 41 cents per share. That fell from $9.91 billion, or $1.73 per share, during the same period a year ago. 

Excluding certain items, the company's earnings per share were 67 cents per share for the quarter. 

Looking ahead, the New York-based company narrowed its 2023 sales forecast to $67 billion to $70 billion, from a previous forecast of $67 billion to $71 billion. 

Pfizer reiterated its full-year adjusted earnings outlook of $3.25 to $3.45 per share.

The company expects Covid-related sales to decline for the year. Pfizer reaffirmed its forecast of $13.5 billion in Covid vaccine sales in 2023 and $8 billion in revenue for Paxlovid.

Pfizer noted that guidance for the products is based on both existing supply contracts with governments and sales from the commercial market in the U.S. The company will start selling Covid-related products directly to health-care providers this fall. 

Pfizer CEO Albert Bourla said during an earnings call Tuesday that there is clearly a "higher level of uncertainty" about demand projections for Covid products than for the rest of the company's business.

He noted that the second half of the year will "play a bigger role in informing our expectations for the long-term demand" of the company's Covid vaccine and Paxlovid. Utilization "follows very closely" with Covid infection rates, he said.

"We expect a new COVID-19 wave to start in the U.S. this fall, and this expectation is supported by the increase in infection rates we are already seeing," Bourla said, referring to a slight uptick in Covid cases reported to the Centers for Disease Control and Prevention over the last few weeks. 

Pfizer's stock price fell less than 1% in premarket trading. The company's shares have dropped nearly 30% this year, putting Pfizer's market value at roughly $203 billion.

Pfizer's non-Covid drugs

Pfizer is in a transition period as it navigates a post-pandemic world. The company is pinning its hopes on mergers and acquisitions and a record pipeline to pivot to new areas of growth. 

Excluding Covid products, drugs from recently acquired companies largely fueled revenue. 

Those sales include Biohaven Pharmaceuticals migraine drug Nurtec ODT and Global Blood Therapeutics' sickle cell disease treatment Oxbryta, which drew in $247 million and $77 million, respectively.

The company said revenue was also driven by strong sales of Vyndaqel drugs, which are used to treat a certain type of cardiomyopathy, a disease of the heart muscle. Those drugs booked $782 million in sales, up 42% from the second quarter of 2022.

Other drugs weighed on revenue, however. 

Inflectra, a monoclonal antibody used to treat a range of inflammatory autoimmune diseases, posted $74 million in sales. That total fell 46% from the same period a year ago. 

Pfizer's Ibrance, which treats a certain type of breast cancer, posted $1.24 billion in sales, down 6% from a year ago. 

Pfizer looks to drug pipeline, M&A

Pfizer is in a transition period as it navigates its post-pandemic boom. The company is pinning its hopes on mergers and acquisitions and a record pipeline to pivot to new areas of growth. 

Bourla noted that the company is halfway to its goal of launching 19 new products or drug indications in an 18-month span – a target set last year. Indications refer to using a drug for a different disease type.

Pfizer had six product approvals and four launches in the first six months of the year. The company expects six more approvals and six launches during the second half of the year. 

Bourla said Pfizer expects revenue from this year's new products to accumulate "largely in the second half of 2023 because the first-half launches occurred late in the second quarter."

Pfizer's upcoming launches include its updated Covid shot, which is designed to target the omicron subvariant XBB.1.5.

Bourla said the company expects to sell the Covid vaccine in the commercial market in September, assuming the Food and Drug Administration approves it and makes it available to the public by the end of August. 

Pfizer is also expected to roll out its vaccine for respiratory syncytial virus this fall. 

The FDA approved the shot in late May, and the Centers for Disease Control and Prevention recommended the jab to adults 60 and above. But the CDC says seniors should work with their health care providers to decide if taking a shot is right for them. 

Denton said that the guidance to consult with doctors first will likely "slow its uptake in the U.S." 

Pfizer executives also provided updates on the company's $43 billion acquisition of cancer therapy maker Seagen – a deal Pfizer believes could contribute more than $10 billion in risk-adjusted sales by 2030. 

Bourla said the company is working closely with regulators that are reviewing the deal, including the U.S. Federal Trade Commission and the European Commission, the European Union's executive body.

The FTC asked Pfizer and Seagen for more information on their proposed merger during the second quarter. The move came as the agency cracks down on similar deals in the pharmaceutical industry.