Pfizer is implementing a “cost realignment program” expected to save the pharmaceutical giant at least $3.5 billion as it prepares for revenue drops for its Covid-19 vaccine and Paxlovid, a prescription pill for treating Covid-19, according to its updated full-year guidance.
Pfizer expects the cost-cutting program to realize approximately $1 billion in savings in 2023 and at least $2.5 billion next year.
The one-time costs incurred to launch the program, including severance and implementation costs, are expected to be approximately $3 billion, most of which will be cash.
The company also expects full-year revenues for its vaccine and Paxlovid to be about $12.5 billion—$9 billion lower than what was anticipated.
Paxlovid full-year revenue expectations were lowered by about $7 billion while vaccine revenue expectations were reduced by approximately $2 billion because of “lower-than-expected vaccination rates.”
Pfizer’s earnings per share is now expected to be in the range of $1.45 to $1.65—a stark adjustment from its original range of $3.25 to $3.45, according to the guidance report.
$58 billion to $61 billion. That’s the guidance range provided by Pfizer for total annual revenue in light of the decrease in Covid product sales.
Pfizer’s stock closed down more than 2% at $32.11 on Friday—another decline in the stock since the start of the year, when it was trading around $50.
Pfizer’s guidance provides a clear insight into Covid-19 vaccination rates, which the CDC stopped reporting on in May, when the healthcare agency reported 230.6 million Americans were fully vaccinated. Far fewer people, around 56 million, received the booster vaccine. Pfizer said in January it expected annual revenues for its Covid vaccine and Paxlovid pill to fall about 60% to $21.5 billion in 2023, according to early guidance. The company noted its expectation for Covid shot demand to drop 29% to about 65 million doses this year as the government peels back on vaccine funding.
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