By Michael Erman and Bhanvi Satija

(Reuters) -Pfizer reported a shock quarterly revenue on Tuesday, helped by value cuts and fewer returns of its COVID remedy Paxlovid by the U.S. authorities than it had anticipated, however gross sales of some excessive profile merchandise fell wanting Wall Road estimates.

The New York-based drugmaker earned 10 cents per share on an adjusted foundation for the fourth quarter. Analysts on common had anticipated a lack of 22 cents per share, based on LSEG information.

Pfizer (NYSE:) shares have been down 1.3% in morning commerce after opening greater than 2% larger.

Income within the quarter of $14.25 billion was shy of Wall Road estimates of $14.42 billion.

Buyers fled Pfizer final yr as pandemic worries declined and billions of {dollars} in COVID-19 vaccine and remedy gross sales disappeared. The corporate has responded with a latest buy of most cancers drugmaker Seagen, a $4 billion cost-cutting program, and inner restructuring.

Jeff Jonas, portfolio supervisor at Gabelli Funds, stated he was involved in regards to the firm’s non-COVID efficiency, after income for merchandise like breast most cancers remedy Ibrance and the Prevnar pneumonia vaccine have been lighter than anticipated.

“Traditionally I believed that they had top-of-the-line gross sales forces within the trade they usually’ve been capable of at the least promote and execute on medication fairly nicely, even when their R&D possibly wasn’t at all times the very best. However there have been some challenges there not too long ago,” Jonas stated.

Pfizer CEO Albert Bourla stated the corporate was seeking to leverage a “extra centered, environment friendly construction” to drive development of latest medication. Bourla beforehand expressed disappointment over the launch of the brand new RSV vaccine Abrysvo, which has considerably trailed a rival shot from GSK Ibrance, which is dealing with intense competitors from rival remedies, noticed gross sales fall 12.6% to $1.12 billion within the quarter, beneath analysts’ forecasts for $1.23 billion.

Prevnar introduced in gross sales of $1.61 billion, beneath estimates of $2 billion. The corporate cited decrease demand and “unfavorable timing of buyer orders” for the shortfall.

Income from COVID merchandise, the Paxlovid antiviral remedy and vaccine Comirnaty, got here in at $12.5 billion for 2023, assembly the corporate’s personal targets for the yr, however a far cry from the $57 billion peak racked up in 2022.

Pfizer in October renegotiated a contract, permitting the U.S. authorities to return unused Paxlovid stock. The corporate recorded a smaller-than anticipated $3.5 billion income reversal within the quarter because the U.S. returned about 6.5 million remedy programs. It had beforehand forecast a $4.2 billion income reversal based mostly on the anticipated return of round 7.9 million programs.

A Pfizer spokesperson stated there had been extra use of the two-drug remedy than it had forecast. Nonetheless, the window for U.S. authorities Paxlovid returns stays open, and the corporate might take one other monetary adjustment within the present quarter.

The corporate maintained its 2024 adjusted revenue and gross sales forecasts of $2.05 to $2.25 per share earnings, and income of $58.5 billion to $61.5 billion.

That features a $3.1 billion contribution from most cancers drugmaker Seagen and $8 billion in gross sales from Paxlovid and COVID-19 vaccine Comirnaty, which it makes with German associate BioNTech (NASDAQ:).

The corporate has been slashing analysis and improvement spending as a part of its value lower program. R&D bills have been down 22% within the quarter to $2.82 billion, pushed by decrease compensation spending, in addition to reductions in its vaccine and uncommon illness applications.