Sometimes no news is good news.
On Tuesday, Pfizer delivered an uneventful update to investors with its second-quarter earnings results. It was a welcome reprieve from the New York drugmaker’s volatile recent history, in which it’s dealt with declining Covid-19 sales, been pushed into cost-cutting, and tangled with inflated expectations around the obesity market.
Instead, the drugmaker delivered few major updates and issued beat-and-raise financial results, boosting its 2024 revenue expectations by $1 billion while enjoying its first year-over-year quarterly revenue growth — even if a modest 3% bump — since the end of of 2022.
“2024 is clearly a foundation year for Pfizer,” CFO Dave Denton told investors on Tuesday’s earnings call, saying that the company “will methodically build off this base.”
And it was a sharp contrast to Merck, whose shares $MRK were down almost 10% after the company cut its guidance and warned of trouble with vaccine sales in China.
Still, Pfizer is not out of the storm. There are more costs to be cut and debts to paid down. Obesity remains a quandary, with Pfizer executives swatting away repeated attempts from Wall Street analysts for further granularity on what’s to come with its oral GLP-1 candidate danuglipron and other early research programs. And there’s always a chance the company could toss in a surprise, as it did earlier in May after indicating it was largely done cutting, then weeks later announcing another round of savings.
But shareholders seemed relieved on Tuesday. The stock $PFE was up about 2% by early afternoon. And after a bruising 2023, where the company’s value fell nearly 50%, Pfizer is trading up about 5% year-to-date.
Jefferies analyst Akash Tewari called it a “solid” result, highlighting quarterly revenue beats for the cancer drug Padcev, the heart treatment Vyndaqel, and the migraine drug Nurtec. Vyndaqel, in particular, came in 24% above Wall Street’s expectations, bringing in over $1.3 billion in quarterly revenue.
Headed into this year, CEO Albert Bourla had to walk a fine line in turning the page on Covid uncertainties. As one investor put it last December, “there is a path, but it’s not going to be easy.”
Big decisions lie ahead, including choosing a successor to Mikael Dolsten, the outgoing chief scientific officer, a go or no-go call on placing a hefty bet on danuglipron entering Phase 3, and if the balance sheet can support more dealmaking to further pad the pipeline. And Bourla and his team endeavored to keep excitement for its obesity work in check, seemingly having internalized the painful lessons of managing investor expectations through the Covid heyday. Tuesday’s earnings call shed little new insight on how Pfizer’s executives are thinking through those big decisions.
“We are driving progress with solid execution as we continue to help patients and grow our business,” Bourla said. “Execution makes the difference.”