How to look at the market regarding Pfizer (PFE) earnings forecasts
In the company's 3Q (July-September) financial results for the fiscal year ending 2022/12, sales fell 6% from the same period last year to 22.64 billion dollars, and adjusted diluted EPS increased 40% to 1.78 dollars, which greatly exceeded market expectations (1.39 dollars). In terms of sales, sales of the novel coronavirus vaccine fell 66% from the same period to 4.4 billion dollars. In addition to delays in delivery of COVID-related products to developed countries resonated, exchange headwinds (about 1 billion dollars) etc. were factors in the decline in sales. Meanwhile, the oral remedy “Paxlovid” for the novel coronavirus vaccine approved at the end of last year was 7.5 billion dollars. Sales excluding COVID-related products only increased 2% from the same period. In terms of profit and loss, the ratio of cost of sales to sales was 26.7%, a decrease of 14.5 percentage points compared to the same period last year. This was due to favorable changes in the sales structure, such as a drastic increase in sales of “Paxlovid” and a decrease in sales of “COMIRNATY.” Research and development expenses only increased slightly, but in addition to cost increases for “Paxlovid” and “COMIRNATY,” net profit only increased 6% due to an increase in provisions for US health insurance reform costs, the elimination of deferred tax refunds, etc.
Sales guidance for the full fiscal year ending 22/12 is 99.5 billion to 102 billion dollars. The lower end of the range was revised upward from the previous $98 billion. The EPS forecast was also revised upward from the conventional 6.30 to 6.45 dollars, to 6.40 to 6.50 dollars. In connection with COVID-19, we received approval for Omicron-compatible vaccines, and vaccine sales were raised by 2 billion dollars to about 34 billion dollars. Sales of “Paxlovid” remained unchanged from previous forecasts at 22 billion dollars.
While the global COVID-19 infection has almost gone round, the “Inflation Control Law,” which incorporates measures to control the price of prescription drugs, was enacted in August '22. In addition to drug price cuts for the main cancer treatment drug “Evrance,” it is expected that “Evrance” patents will be lost after 25. The company stated at a briefing session for investors that it expects to lose 17 billion dollars in sales per year from 25 to 30 due to patent expiration. The company did not disclose the breakdown of sales forecasts for the mRNA vaccine under development, but it was explained that sales of RS virus vaccine candidates scheduled to be released in 23 peaked in 27, and there is a possibility that they will reach 2 billion dollars or more.
Sales guidance for the full fiscal year ending 22/12 is 99.5 billion to 102 billion dollars. The lower end of the range was revised upward from the previous $98 billion. The EPS forecast was also revised upward from the conventional 6.30 to 6.45 dollars, to 6.40 to 6.50 dollars. In connection with COVID-19, we received approval for Omicron-compatible vaccines, and vaccine sales were raised by 2 billion dollars to about 34 billion dollars. Sales of “Paxlovid” remained unchanged from previous forecasts at 22 billion dollars.
While the global COVID-19 infection has almost gone round, the “Inflation Control Law,” which incorporates measures to control the price of prescription drugs, was enacted in August '22. In addition to drug price cuts for the main cancer treatment drug “Evrance,” it is expected that “Evrance” patents will be lost after 25. The company stated at a briefing session for investors that it expects to lose 17 billion dollars in sales per year from 25 to 30 due to patent expiration. The company did not disclose the breakdown of sales forecasts for the mRNA vaccine under development, but it was explained that sales of RS virus vaccine candidates scheduled to be released in 23 peaked in 27, and there is a possibility that they will reach 2 billion dollars or more.
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