With just one asset in weight loss moving through the clinic, Pfizer targets the space for potential dealmaking, as well as bringing assets over from China.
As Pfizer beat analyst expectations for 2024 with revenue of $63.6 billion, all eyes turned to the pipeline and the pharma’s obesity strategy for future growth.
Analysts have been eagerly awaiting news on Pfizer’s next-gen GLP-1 weight loss candidate danuglipron, which has a dose-optimization study expected to read out in the first quarter of the year. The earnings release passed without that data, with newly minted Chief Scientific Officer Chris Boshoff declining to speculate on whether the asset could be on the chopping block if it doesn’t meet expectations.
Boshoff did say that actual weight loss numbers will be a secondary endpoint. The focus of this readout will be on pharmacokinetics and nailing down a once-daily dose for the oral candidate. While the data may include weight loss, Boshoff cautioned that it’s a small trial and the numbers may not be reliable.
Without news still to come about that asset’s potential, analysts wondered if Pfizer might be looking to some deals or partnerships to build out a more robust obesity pipeline. Andrew Baum, chief strategy and innovation officer, agreed that “obesity is heterogeneous and [will] likely require a set of tools encompassing both different modalities and different delivery devices in order to manage.”
“These assets do exist. Some are scattered. Some have portfolios,” Baum said. “But you could imagine that, of course, we are looking at all the opportunities and trying to understand what delivers the most value to patients and obviously to Pfizer shareholders.”
As for business development more broadly, Pfizer could also follow its peers to China for potential new assets, according to Baum. “It has not escaped our attention, of course, the innovation from China across multiple therapeutic areas.”
The region previously was a leader in oncology but now that innovation has opened up. Baum said Pfizer continues to have “very fruitful discussions” regarding a potential deal in China.
CEO Albert Bourla said that the company will be strategic in any dealmaking. Over 2024, business development activity was restricted as planned as the company worked to absorb Seagen, which the pharma company bought in 2023 for $43 billion. CFO Dave Denton said the company will look for deals in the ballpark of $10 billion to $15 billion.
“Everything we do will be due for a strategic lens of building around our core competencies, or building competences in the areas that maybe we have not been in previously,” Baum said of potential dealmaking.
Strong Footing
The New York pharma reported the 7% increase in revenue for the full year and earnings per share of $1.41, according to a fourth quarter earnings release issued Tuesday morning. For the fourth quarter, the company saw revenue of $17.8 billion, a 21% year-over-year increase. The beat was driven by strong performance across Pfizer’s commercial operations, particularly from the COVID franchise which has proven to be a “predictable and durable” contributor to earnings, according to Bourla.
R&D expenses increased 8% as Pfizer funneled more money into developing candidates from theSeagen acquisition. The change was offset by a decrease in spending on the vaccine program and the cost alignment program. Pfizer kicked off about a dozen clinical trials in 2024, including eight key Phase III studies, according to Bourla.
Pfizer also reorganized its R&D leadership last year, welcoming Boshoff in November 2024 to replace Mikael Dolsten, who led the R&D organization through the COVID-19 pandemic. Boshoff had previously served as Pfizer’s chief oncology officer.
“The good news with Chris is that he knew really the Pfizer organization, and I’m very impressed with the speed and thoughtfulness that he’s deploying his changes already,” Bourla said. In his short time in the role, Boshoff has selected a number of new leaders for the R&D organization and aided in efforts to refocus the pipeline.
Boshoff said that the changes have allowed for more efficient handoff of candidates between early to late-stage development. Bourla said that Pfizer has a higher success rate of molecules, hitting about 17% compared to the industry average of 10–11%. The company has also been faster, moving assets to the market in five to six years compared to eight for the industry average. But Pfizer could have done better actually choosing the molecules to focus the R&D organization on, according to the CEO.
“So historically, when you look back, there’s no shortage of first in class breakthrough molecules that we’ve successfully shepherded through development,” said Baum. “However, some of those really have not delivered in terms of financial revenues and therefore to shareholders. And the key issue is really ensuring that we have successful portfolio prioritization, bringing that commercial lens to much earlier during the process.”
Pfizer also reported $2.9 billion in impairment charges in the fourth quarter, including $1 billion specifically for Seagen asset felmetatug vedotin. Pfizer has discontinued a Phase I trial of the antibody-drug conjugate in solid tumors.
Pfizer has been cutting costs for the past few quarters, realizing $4 billion in savings. That target has been revised to $4.5 billion by the end of 2025.
“Importantly, we believe the steps taken to right size our cost base will put us on a strong footing towards increased operational efficiency and support our goal to return to pre-pandemic operating margins,” Denton said.
