Pfizer shows profit growth from cost cuts and steadier COVID sales

By Bhanvi Satija, Michael Erman

(Reuters) -Drugmaker Pfizer posted a better than expected fourth quarter profit on Thursday, helped by cost cuts it began last year as it aims to show investors steadier execution and growth after large swings related to its COVID-19 vaccine.

Its COVID-19 vaccine, once a nearly $38 billion a year product, brought in sales of $3.38 billion in the quarter, beating expectations by about $280 million.

"Our revenue volatility is largely in the past as COVID-related uncertainties have diminished," Pfizer's finance chief David Denton said in prepared remarks. 

Total revenue for the quarter was $17.8 billion, up from $14.6 billion a year ago and above Wall Street analysts' estimates of $17.4 billion.

Pfizer's shares rose 2.6% in early trading. The stock fell nearly 8% last year, and trades at less than half its value at the peak of the COVID-19 pandemic.

On an adjusted basis, Pfizer earned 63 cents per share for the fourth quarter, compared with analysts' estimates of 47 cents per share.

The results are "unlikely to shock many investors, but we view another top- and bottom-line beat as positive for improving sentiment," BMO Capital Markets Evan Seigerman said in a note.

Seigerman said that Pfizer's consistent commercial progress drove the fourth-quarter beat, but investor focus will likely shift to its pipeline of drugs and for its 2023 acquisition of cancer drugmaker Seagen to bear fruit.

Quarterly sales of cancer therapy Padcev, acquired with Seagen, came in at $444 million, compared with estimates of $440 million.

The company implemented cost-cutting measures and expects to save $4.5 billion by the end of this year, and another $1.5 billion by simplifying its manufacturing operations by 2027.

Its costs from sales fell 22% in the quarter to $5.9 billion from $7.6 billion a year ago.

Revenue from COVID vaccine Comirnaty brought in sales of $3.38 billion, while antiviral treatment Paxlovid was $727 million for the quarter. Pfizer makes the Comirnaty vaccine with German partner BioNTech.

Analysts were expecting $3.10 billion for Comirnaty and quarterly sales of $794.33 million for Paxlovid, according to data compiled by LSEG. 

Demand for Comirnaty has been better than expected, according to Brian Mulberry, Portfolio Manager at Zacks Investment Management, which owns 2.4 million Pfizer shares.

He said the results show that Pfizer is likely benefiting from brand loyalty versus competitor Moderna.

Sales of its heart disease drug, sold as Vyndaqel and Vyndamax, came in at $1.55 billion, above estimates of $1.48 billion. 

(Reporting by Manas Mishra and Bhanvi Satija in Bengaluru and Michael Erman in New York; Editing by Saumyadeb Chakrabarty and Nick Zieminski)