CEO Albert Bourla, who is under attack from activist investor Starboard Value, got a much-needed victory on Tuesday as Pfizer reported that third-quarter revenue and adjusted profit beat the analysts’ consensus.
With a $1 billion stake in Pfizer, activist investor Starboard Value has recently criticized CEO Albert Bourla and senior management for “dramatically” underperforming peers and the market. However, the company on Tuesday reported its third consecutive quarter of positive results, handily beating Wall Street’s expectations.
In Q3, Pfizer secured revenue of $17.7 billion compared to the consensus estimate of $14.92 billion, while reporting earnings per share of $1.06 that topped the analyst estimate of $0.62.
COVID-10 antiviral medication Paxlovid brought in $2.7 billion in the quarter, up from the $202 million that Pfizer posted in Q3 2023.
Guggenheim analyst Vamil Divan in a note to investors called Pfizer’s Q3 performance “very strong” and highlighted Paxlovid sales, “which beat our increased expectations by over $1B and consensus by more than $2B.”
BMO Capital Markets analyst Evan Seigerman called Tuesday’s financial results a “solid” Q3 for Pfizer with a top- and bottom-line beat.
The quarterly win comes at a critical time for Pfizer’s CEO, who is under pressure from Starboard Value. Analysts in recent weeks have rallied around Bourla in response to the Starboard challenge.
However, Guggenheim’s Divan on Tuesday warned that “investors will continue to look for more visibility into how management hopes to navigate the various challenges they face in the coming years as many of their top products either lose patent protection or face increased competition.”
Looking ahead, Pfizer on Tuesday raised its full-year 2024 revenue outlook to between $61 billion and $64 billion, up from a previous range of $59.5 billion to $62.5 billion. The company also raised its guidance on adjusted annual earnings per share to a range of $2.75 to $2.95 per share, an increase from a previous range of $2.45 to $2.65 per share.
Leerink analyst David Risinger in a note to investors said Pfizer’s new guidance ranges imply a “conservative” Q4. Assuming the company achieves the high end of its new guidances, Risinger contends revenue for the final quarter of 2024 would be $17.3 billion, which is 4% below current consensus of $18.1 billion.
Risinger in a separate note said that “likely in response to activist investor Starboard engagement,” Pfizer plans to showcase the company’s pipeline on Nov. 1, starting with ponsegromab—a monoclonal antibody directed against growth differentiation factor-15 (GDF-15), which showed positive results in a Phase II study in patients with cancer cachexia and elevated levels of GDF-15. The candidate is also being investigated in a Phase II study in patients with heart failure and elevated serum GDF-15 concentrations.
“We learned from a clinicaltrials.gov update that Pfizer recently upsized and delayed ponsegromab’s Ph2 trial, including changing the estimated primary completion date from March 2025 to March 2026,” according to Risinger. While he awaits management comments on the rationale behind the heart failure trial changes, Risinger continues to view ponsegromab as having “multi-billion-dollar blockbuster potential in cancer cachexia due to lack of approved therapies plus potentially other indications.”
