Pfizer Faces Pressure as Smaller U.S. Winter COVID Wave Hits Sales

A smaller U.S. winter COVID wave pressures Pfizer as COVID-related sales decline.

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Pfizer Faces Pressure as Smaller U.S. Winter COVID Wave Hits Sales

The winter season has traditionally been a peak period for COVID-19 cases in the United States. However, recent data suggests that this year’s winter surge is much smaller than in previous years. While this is good news from a public health perspective, it also brings challenges for pharmaceutical giant Pfizer, which has relied on COVID-related products like Paxlovid and its vaccine for significant revenue generation. With fewer infections and declining sales of COVID treatments, Pfizer faces increasing pressure to bolster its non-COVID drug portfolio to maintain investor confidence.

COVID Cases Drop Significantly This Winter

According to data from the Centers for Disease Control and Prevention (CDC), COVID-19 incidence has dropped significantly since the beginning of the year. Emergency department visits related to COVID diagnoses peaked at around 1.4% of total patient visits on January 1, 2024. This is a stark contrast to the 3.4% recorded at the same time last year, suggesting that the virus is currently having a much smaller impact.

One of the major factors contributing to the reduced wave is the widespread immunity that has built up over the years. Many people have had multiple infections, have been vaccinated, or both, leading to greater resistance against severe illness. Unlike previous years, there has been no major new variant emerging to fuel a fresh outbreak, further keeping cases in check.

Declining COVID Sales Put Pressure on Pfizer

Pfizer’s financial health has been closely tied to its COVID-related products since the beginning of the pandemic. At its peak, the company generated nearly $60 billion in revenue from these treatments. However, with COVID cases declining, demand for Paxlovid and vaccines has taken a significant hit.

Paxlovid Sales Decline

Sales of Pfizer’s antiviral COVID drug, Paxlovid, have been dropping significantly. Prescription data shows that Paxlovid usage peaked at the start of the year but was still less than one-third of the volume seen a year ago. This declining trend has continued for three consecutive weeks, highlighting how reduced COVID activity is directly affecting Pfizer’s sales figures.

Analysts estimate that Paxlovid will generate around $5.3 billion in revenue in 2024, but sales are expected to decline by approximately 25% in 2025. The company had projected continued demand due to expected COVID waves, but the smaller-than-expected winter surge has raised doubts about future sales performance.

COVID Vaccine Sales Drop

In addition to Paxlovid, Pfizer’s COVID vaccine sales have also plummeted. Both products combined are expected to contribute around 16% of Pfizer’s projected $63 billion revenue in 2024. However, this number is expected to drop further to 13% in 2025 as public demand continues to wane.

Investor Concerns and Pfizer’s Stock Performance

Despite generating substantial revenue during the pandemic, Pfizer’s stock has struggled. It is currently trading at around $26.50, less than half of its peak during the pandemic. Investors remain unconvinced about the company’s ability to pivot successfully away from COVID-related revenues and generate sustainable growth from its other drug portfolios.

Analysts expect Pfizer to report $17.4 billion in revenue for the fourth quarter of 2023, with earnings per share projected at 47 cents. These figures represent an improvement from a year ago, but many investors are cautious, given the shrinking role of COVID products in the company’s overall business model.

Will a New COVID Variant Trigger Another Wave?

One of the biggest uncertainties surrounding COVID-19 is the potential emergence of new variants. Some experts believe that the smaller winter wave may be attributed to the lack of a highly transmissible new strain. In previous years, new variants like Delta and Omicron were responsible for major surges in cases.

Scientists Weigh In

Jeremy Kamil, a microbiologist at the University of Pittsburgh, believes that built-up immunity is playing a key role in preventing large-scale outbreaks. He notes that most people have either been infected, vaccinated, or both, making it difficult for the virus to spread as rapidly as before.

Similarly, Johns Hopkins microbiologist Andy Pekosz sees no strong evidence pointing to another imminent COVID surge. He remains hopeful that COVID cases could decline to “near nothing” during the spring months.

Meanwhile, Marc Johnson, a microbiologist at the University of Missouri, highlights that the most commonly circulating variant today is nearly identical to the one before it. This means that, unlike past winters, when new variants drove fresh outbreaks, the virus currently lacks the kind of genetic mutation needed to fuel another major wave.

What’s Next for Pfizer?

With COVID sales shrinking, Pfizer must now shift its focus toward other parts of its business to maintain growth. The company has several key strategies in place:

1. Expanding Cancer Drug Portfolio

Pfizer has been actively investing in its oncology division, aiming to drive revenue growth from cancer treatments. Drugs like Ibrance (used for breast cancer treatment) and new developments in immuno-oncology could help the company compensate for declining COVID-related sales.

2. Strengthening Vaccine Offerings Beyond COVID

While its COVID vaccine sales are falling, Pfizer is working on expanding its vaccine portfolio for other infectious diseases. This includes developing RSV (respiratory syncytial virus) and flu vaccines, which could provide new revenue streams.

3. Mergers and Acquisitions

Pfizer has made significant acquisitions to bolster its drug pipeline. One major deal was its $43 billion acquisition of Seagen, a biotech company specializing in cancer treatments. Such strategic moves are expected to provide long-term growth opportunities.

4. Investing in mRNA Technology

The success of Pfizer’s COVID-19 vaccine, developed with BioNTech, showcased the potential of mRNA technology. The company is exploring how this technology can be used for other diseases, including flu and even cancer.

 A Crucial Turning Point for Pfizer

The smaller U.S. winter COVID wave is a clear sign that the pandemic’s impact on public health and the pharmaceutical industry is waning. While this is a positive development for society, it poses a significant challenge for Pfizer, which must now navigate a post-pandemic world with declining COVID-related revenues.

With its stock struggling and investors looking for reassurance, Pfizer is at a crucial turning point. The company’s ability to successfully transition away from its pandemic-era reliance on COVID sales and focus on its broader drug portfolio will determine its long-term success.

Whether or not a new COVID variant emerges in the coming months remains uncertain. However, what is clear is that Pfizer must act swiftly to reassure investors and chart a path forward in a world where COVID is no longer the dominant driver of its business.