Pfizer Stock Faces Pivotal 2024 As Covid Tailwinds Fade; Can New Drugs And Deals Reignite Growth?

John Smith

Pfizer heads into 2024 facing a critical inflection point, as the pharmaceutical giant seeks to reignite growth following the immense success of its Covid-19 vaccine and treatment.

With sales of its pandemic products plummeting back to earth, Pfizer is positioning its pipeline, new drug launches and strategic deals to drive the next leg of growth.

However, risks remain amid patent expirations and uncertainty around its growth trajectory.

Fading Covid Tailwinds Create Growth Gap

The coming year is shaping up as a transitional one for Pfizer after seeing massive top-line growth the past two years on the back of its Covid-19 vaccine Comirnaty and antiviral treatment Paxlovid.

In 2021, Comirnaty generated a staggering $36 billion in sales as Pfizer rapidly scaled up production to meet intense global demand.

However, with vaccination rates slowing and the acute phase of the pandemic waning, Comirnaty sales have fallen off a cliff. Pfizer 2022 sales dropped 64% from 2021 to around $13.5 billion. That figure could fall as low as $5 billion in 2024 as the market for boosters declines.

Paxlovid, which hit nearly $8 billion in 2022 sales, is also set to fall dramatically. With less severe Covid waves, Pfizer projects Paxlovid sales sinking 82% next year to just $1 billion.

This leaves a massive hole in Pfizer’s top line, which the company urgently needs to fill over the next 12-24 months.

New Launches And Deals To Reignite Growth

To reaccelerate growth, Pfizer is counting on a robust slate of new drug launches, supplemented by mergers and acquisitions like its recent buyout of cancer drug maker Seagen.

Over the next 18 months, Pfizer expects over 90 new product launches across multiple therapeutic areas such as cardiovascular, inflammation & immunology, oncology, and rare diseases.

Key launches in 2024 include obesity drug candidate danuglipron, heart failure therapy sotatercept, and late-stage cancer drugs like etrasimod and ritlecitinib. Pfizer also hopes to expand labels for existing blockbusters like Vyndaqel for transthyretin amyloid cardiomyopathy.

The $5.4 billion acquisition of Seagen adds promising new oncology drugs that Pfizer aims to accelerate with its commercial infrastructure and global scale.

Seagen’s flagship drug Adcetris and late-stage candidate tisotumab vedotin could see rapid peak sales growth under Pfizer’s umbrella beginning in 2024.

2024 Revenue And EPS Outlook

For 2024, Pfizer has forecast revenue of $58.5 billion to $61.5 billion, representing a 40% drop from 2021’s $100 billion Covid-driven peak.

At the midpoint, this implies around 2% year-over-year growth from 2023’s guided range of $58 billion to $61 billion. Pfizer sees adjusted EPS of $2.05 to $2.25 in 2024.

However, Wall Street analysts have a slightly more upbeat outlook, projecting 2024 revenue of around $60 billion and adjusted EPS of $2.27.

This indicates analysts see scope for Pfizer to exceed guidance, delivering high single-digit revenue growth and mid-single-digit EPS growth next year.

Risks: Growth Trajectory Uncertainty, Patent Cliff

While Pfizer aims to reignite growth, uncertainties around its trajectory persist. It remains unclear whether new launches and deals can fully offset lost Covid sales and the upcoming patent cliff for drugs like Ibrance, Xeljanz and Eliquis. If new products underperform, revenue could stagnate through 2025.

Setbacks in clinical studies or regulatory delays could also hamper critical new drug launches intended to power growth.

And while unlikely, the emergence of a dangerous new Covid variant could lead to unexpected new demand for Comirnaty and Paxlovid. This would delay Pfizer’s transition beyond pandemic reliance.

With growth questions unresolved, analysts expect Pfizer shares to remain volatile in 2024 absent more compelling pipeline data or M&A moves.

But with its vast resources and newfound focus, Pfizer has potential to return to growth and reward patient investors. The coming year will determine whether Pfizer can successfully navigate the post-Covid landscape.

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John Smith is a veteran stock trader with over 10 years of experience in the financial markets. He is a widely followed market commentator known for his astute analysis and accurate predictions. John has authored multiple bestselling books explaining complex market concepts in simple terms for novice investors looking to grow their wealth through strategic trading and long-term investments.
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