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PI

PFIZER INC (PFE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue grew 22% year over year to $17.8B, with adjusted EPS of $0.63 (vs. $0.10 in Q4 2023) as non‑COVID products rose 11% operationally to $13.7B; GAAP EPS was $0.07, reflecting $2.9B in non‑cash intangible impairments and higher net interest expense .
  • Mix headwinds persisted: Comirnaty fell 38% YoY to $3.38B, while Paxlovid printed $0.73B (lapping a 2023 non‑cash revenue reversal); growth was led by Vyndaqel (+60% op), Eliquis (+13% op), Nurtec (+39% op), Xtandi (+24% op), and $915M from legacy Seagen products .
  • Pfizer reaffirmed all components of FY2025 guidance: revenue $61–64B and adjusted EPS $2.80–$3.00; adjusted SI&A $13.3–$14.3B; adjusted R&D $10.7–$11.7B; ~15% adjusted ETR. No 2025 buybacks are assumed .
  • Management highlighted cost discipline (delivered $4.0B net savings in 2024; targeting ~$4.5B by end‑2025) and expects initial savings from the Manufacturing Optimization Program to begin late 2025; CFO reiterated a path back to pre‑pandemic operating margins over time .

What Went Well and What Went Wrong

  • What Went Well

    • Non‑COVID portfolio momentum: ex‑COVID revenues up 11% operationally in Q4; growth drivers included legacy Seagen ($915M), Vyndaqel (+60% op), Eliquis (+13% op), Nurtec (+39% op), and Xtandi (+24% op) .
    • Cost actions and margin roadmap: Pfizer delivered $4.0B 2024 net savings and raised its total target to ~$4.5B by end‑2025; CFO: “we remain confident in our ability to return to pre‑pandemic operating margins in the coming years” .
    • Pipeline/catalysts: Positive Braftovi+Erbitux+mFOLFOX6 BREAKWATER OS/PFS results; PCV‑25 heading to Phase 3; ELREXFIO uptake broadening, with earlier‑line Phase 3 readouts expected to expand addressable population .

  • What Went Wrong

    • COVID normalization and RSV headwinds: Comirnaty down 38% YoY to $3.38B; Abrysvo down 62% YoY given a narrower U.S. older‑adult opportunity per ACIP recommendations; oncology biosimilars down 35% YoY on supply and pricing pressures .
    • Margins mixed: Q4 adjusted cost of sales rose to 32.3% of revenue (implying ~68% adjusted gross margin) due to COVID mix (BioNTech profit split/royalties), consistent with CFO’s “~68%” comment for the quarter .
    • $2.9B non‑cash intangible impairments (B7H4V, Medrol, Zavzpret, Tukysa, disitamab‑vedotin, others) plus higher net interest expense weighed on GAAP profitability .

Financial Results

Summary vs. Prior Quarters (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($B)$13.283 $17.702 $17.763
GAAP Diluted EPS$0.01 $0.78 $0.07
Adjusted Diluted EPS$0.60 $1.06 $0.63
Adjusted Cost of Sales (% Rev)20.8% 27.5% 32.3%
Adjusted SI&A ($B)$3.669 $3.219 $4.275
Adjusted R&D ($B)$2.671 $2.561 $2.986

Segment and Key Product Revenue – Q4 2024 vs. Q4 2023

Segment/ProductQ4 2024 ($M)Q4 2023 ($M)YoY %
Biopharma (segment)17,413 14,186 23%
Pfizer CentreOne325 364 (11%)
Pfizer Ignite26 20 30%
Comirnaty3,383 5,361 (37%) total; (38% op)
Paxlovid727 (3,135) n/m (laps 2023 non‑cash reversal)
Vyndaqel family1,545 961 61% total; 60% op
Eliquis1,832 1,612 14% total; 13% op
Nurtec ODT/Vydura392 282 39% total & op
Xtandi565 457 24% total & op
Abrysvo198 515 (62%) total & op
Oncology biosimilars209 322 (35%) total & op

KPIs

KPIQ4 2024 Value
Non‑COVID revenue (ex‑Comirnaty/Paxlovid)$13.7B (op +11% YoY)
Comirnaty revenue$3.383B
Paxlovid revenue$0.727B
Adjusted gross margin (mgmt)~68% (CFO commentary)
Net cost savings delivered 2024$4.0B; target ~$4.5B by end‑2025
Diluted weighted‑avg shares (Q4)5.703B

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$61.0–$64.0B $61.0–$64.0B Reaffirmed
Adjusted EPSFY 2025$2.80–$3.00 $2.80–$3.00 Reaffirmed
Adjusted SI&AFY 2025$13.3–$14.3B $13.3–$14.3B Reaffirmed
Adjusted R&DFY 2025$10.7–$11.7B $10.7–$11.7B Reaffirmed
Adjusted ETRFY 2025~15% ~15% Reaffirmed
Share repurchasesFY 2025None assumed None assumed Reaffirmed

Notes: Guidance assumes no unannounced BD; includes ~$0.6B generic/biosimilar headwind and 1.6% IRA Part D redesign revenue headwind ($1B) in 2025; ~5.74B diluted shares .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q4 2024)Trend
Cost discipline & marginsLaunched Manufacturing Optimization Program; targeting ~$1.5B COGS savings by 2027; 14% ex‑COVID growth; raised 2024 EPS guidance Delivered $4.0B net savings; target ~$4.5B by end‑2025; initial MOP savings in late 2025; aiming to return to pre‑pandemic margins Positive execution; margin rebuild underway
COVID portfolio durabilityQ3 benefitted from PAXLOVID demand in summer wave; COMIRNATY earlier season start; COVID transitioning to “normal” business Management sees stabilizing patterns; multi‑year ex‑US contracts; tailored resource model; durable revenues expected Stabilizing
RSV/Abrysvo & ACIPFDA expanded adult 18–59 at‑risk label; ACIP expanded PCV20 (Prevnar 20) to 50+ Abrysvo U.S. older‑adult market smaller vs. 2023; share gains and maternal strength; potential mid‑term catalysts (year‑round, revaccination, risk expansion) Mixed near‑term; mid‑term optionality
Oncology momentum (incl. Seagen)Strong Q3 Oncology growth; Padcev, Xtandi, Lorbrena, Braftovi/Mektovi momentum Legacy Seagen $915M; ELREXFIO adoption broadening; BREAKWATER PFS/OS positive; multiple Phase 3 starts/readouts expected 2025 Strengthening
R&D reorg/productivityQ3: pipeline breadth; pending CSO transition New R&D leadership; four end‑to‑end TA units; sharpened prioritization; PCV‑25 to Phase 3; danuglipron QD optimization update in Q1’25 Productivity focus
IRA headwindContext provided; modeling considerations flagged ~$1B 2025 revenue headwind; heavier GTN early‑year calendarization; Vyndaqel/IBRANCE/XTANDI/Xeljanz to hit catastrophic earlier Manageable headwind
Capital allocation/BDDeleveraging via Haleon sales; guidance raised; activist dialogue Delevering continuing; 2025 BD capacity ~$10–15B; rebalanced capital allocation post‑delevering Increasing flexibility

Management Commentary

  • CEO: “2024 was a strong year of execution and performance… growth across our product portfolio… including $3.4 billion in revenue from our legacy Seagen portfolio” .
  • CFO: “we… increased our overall savings target to approximately $4.5 billion by the end of this year… remain on track to deliver $1.5 billion of net cost savings from the first phase of our Manufacturing Optimization Program by the end of 2027… confident in our ability to return to pre‑pandemic operating margins” .
  • CEO on COVID: “stabilizing patterns in the disease burden… assumptions for 2025 are on par with 2023 and 2024 patterns” .
  • CEO on pipeline: “at least 4 regulatory decisions, up to 9 potential Phase III readouts and 13 potential pivotal program starts” expected in 2025 .

Q&A Highlights

  • Obesity franchise: Danuglipron QD dose‑optimization and formulation PK readout targeted for Q1 2025; weight loss is a secondary endpoint in a small in‑unit study; oral GIPR antagonist in Phase 2 may enable fixed‑dose combinations; Pfizer evaluating multi‑asset BD to build a broader obesity toolkit .
  • COVID durability: PAXLOVID utilization tracks outbreaks; multi‑year international contracts support predictability; COMIRNATY share improved; tailored field resourcing and pricing models in place .
  • IRA impacts: ~$1B 2025 revenue headwind; earlier catastrophic coverage for higher‑priced brands; heavier early‑year gross‑to‑net .
  • BD capacity: ~$10–15B in 2025 if desired; deleveraging remains priority; intention to prudently monetize remaining Haleon stake during 2025 .
  • RSV outlook: U.S. market volumes lower YoY; Pfizer gained dose‑shipment and retail administration share; maternal uptake tripled season‑to‑date; international reimbursement/tender wins progressing .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue could not be retrieved at this time due to data access limits. As a result, explicit “vs. consensus” comparisons are not included. Values would ordinarily be sourced from S&P Global consensus.

Key Takeaways for Investors

  • The ex‑COVID growth engine is working: Q4 ex‑COVID revenues rose 11% operationally, led by Vyndaqel, Eliquis, Nurtec, Xtandi, and legacy Seagen; oncology assets and migraine/CV franchises underpin medium‑term growth .
  • COVID is now a steady, seasonal contributor, but mix still pressures margins; management sees durability with multi‑year ex‑U.S. contracts and tailored U.S. resourcing .
  • Cost program execution reduces risk: $4.0B savings delivered in 2024, $4.5B target by end‑2025, and a defined COGS program with initial benefits in late 2025; path back toward pre‑pandemic margins reiterated .
  • 2025 outlook intact: Guidance reaffirmed (rev $61–64B; adj EPS $2.80–3.00), absorbing an estimated ~$1B IRA headwind; no buybacks assumed as deleveraging continues .
  • Oncology optionality expanding: Positive BREAKWATER results, growing ELREXFIO adoption with earlier‑line readouts expected, and multiple Phase 3 starts/readouts in 2025 support a richer medium‑term pipeline .
  • RSV near‑term headwind, but levers exist: U.S. older‑adult market smaller, yet Pfizer is gaining share and sees mid‑term catalysts (revaccination cadence, risk‑based expansions, non‑U.S. reimbursement) .
  • Capital allocation flexibility improving into 2025: Deleveraging aided by Haleon monetizations; BD capacity cited at ~$10–15B for 2025 .

Additional Relevant Q4 2024 Press/Context

  • FDA approved Abrysvo in adults 18–59 at risk (Oct 2024); ACIP expanded adult PCV recommendations (Oct 2024), supporting PCV/RSV franchise positioning .
  • EC approved HYMPAVZI (marstacimab) for severe hemophilia A/B (Nov 2024), broadening the Specialty Care base .
  • Reaffirmed FY2025 guidance and explained baseline adjustments vs. non‑recurring 2024 items (Dec 2024) .

References:

  • Q4 2024 press release and financials .
  • Q4 2024 Form 8‑K (Item 2.02, exhibits and tables) .
  • Q4 2024 earnings call transcript (prepared remarks and Q&A) .
  • Q3 2024 press release and call for trend context .
  • Q2 2024 press release for trend context .