In relief for investors, Pfizer 2025 profit forecast in line with estimates

Pfizer on Tuesday forecast 2025 profit roughly in line with estimates, offering some relief to investors after the drugmaker came under fire from shareholders including hedge fund Starboard over its turnaround strategy. 

Shares of the drugmaker rose nearly 3 per cent to $25.98 in premarket trading after the company also said it was expecting 2025 sales of its Covid-19 vaccine and drug to be consistent with current-year levels. 

After the immense success of its Covid products during the pandemic years, the company is facing pressure to bring new drugs to the market to make up for the potential revenue loss from some of its top sellers that are likely to go off patent soon. 

 

Shares have fallen nearly 12 per cent this year and trade at less than half their value at the peak of the Covid-19 pandemic. 

Analysts over the past few weeks have also cut their estimates for Pfizer's profit. 

That has left the company open to investor criticism, with Starboard in October saying its management has overspent on big acquisitions and failed to produce profitable new drugs from those deals or from its internal research and development. 

Pfizer CEO Albert Bourla, however, has defended his turnaround strategy as the company launches cost-cutting programs and sheds non-core businesses to pay down debt. 

"While we see several assets in Pfizer's pipeline (particularly in oncology) that could make the story more interesting, we believe that further advancement ... will be necessary to change the current narrative on shares which would primarily occur 2026+," JP Morgan analyst Chris Schott wrote in a research note. 

The company expects adjusted profit of $2.80 to $3 per share, compared with analysts' average estimate of $2.88 per share, according to data compiled by LSEG. 

Pfizer forecast 2025 revenue in the range of $61 billion to $64 billion, compared with the estimates of $63.26 billion. 

Recent setbacks include disappointing data for a closely watched experimental obesity drug, a weak launch of its respiratory syncytial virus (RSV) vaccine, and the withdrawal of sickle cell disease treatment Oxbryta due to deaths in clinical trials. 

Pfizer's forecast was "reasonable and achievable," BMO Capital Markets analyst Evan Seigerman said, adding that the outlook leaves some room for Pfizer to raise it through the year. 

The company is slated to hold a conference call with analysts later in the day to discuss the forecast. 

The company also estimated a roughly $1 billion hit to its revenue from changes to Medicare's Part D prescription program under President Biden's Inflation Reduction Act. 

Pfizer said the addition of new manufacturer discounts and other changes would more than offset expected benefits from the $2,000 out-of-pocket spending cap that will be introduced for seniors who have the prescription drug plan next year.   

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