Pfizer sees Covid-19 as durable revenue stream as profits rise
New York, United States: Pfizer sharply increased its projections for 2021 revenues and profits on Tuesday following strong earnings, citing much higher Covid-19 vaccine sales as it prepares for a "durable" revenue stream in the wake of the pandemic.
The drugmaker reported a jump in first-quarter profits based on surging revenues, with nearly one-fourth of sales coming from Covid-19 vaccines.
With German partner BioNTech, the pharma giant is ramping up vaccine production and now estimates 2021 revenues of $26 billion from the vaccine, up from the $15 billion projected in February.
Pfizer, which says it is on the cusp of winning US approval for individuals 12 to 15 years old to receive its vaccine, is holding talks with "basically all governments of the world" about providing booster shots through 2024, Chief Executive Albert Bourla told analysts on a conference call.
It is studying the efficacy of giving those shots six or more months after the second vaccine dose and developing doses that could be stored at standard refrigerated temperature for up to 10 weeks.
Bourla expects "durable demand" for Covid-19 vaccines, similar to that of the flu vaccine.
"It is our hope that the Pfizer-BioNTech vaccine will continue to have a global impact by helping to get the devastating pandemic under control and helping economies around the world not only open, but stay open," Bourla said in prepared remarks ahead of a conference call later Tuesday.
That would create "a scenario in which Pfizer can continue to be both a leader and a beneficiary," he said.
Pfizer has won wide praise for its technological prowess in developing a game-changing vaccine in record time. However, critics called the profits troubling given the divide in vaccine availability between rich and poor countries.
World Health Organization chief Tedros Adhanom Ghebreyesus last month decried a "shocking imbalance in the global distribution of vaccines" and called for efforts to fortify the WHO's Covax programs, which aims to ensure that poorer nations can access the shots.
The World Trade Organization has also held meetings on waiving intellectual property rules, which would open the door to broader production of vaccines.
Pfizer reported a net income of $4.9 billion, up 45 percent from the same period of the prior year.
Revenues also jumped 45 percent to $14.6 billion, including $3.5 billion in Covid-19 vaccine sales.
Tuesday's results include the lift from Covid-19 vaccines, which generated profit margins of "high-20s," implying around $900 million in profits in the most recent quarter.
As of May 3, Pfizer and BioNTech have shipped about 430 million doses of the vaccine to 91 countries around the world.
The company has reached an agreement with Covax, a globally pooled coronavirus vaccine procurement effort aimed at providing vaccines to low- and middle-income economies, to provide up to 40 million doses.
However, the company on Tuesday pointed to a series of deals to expand offerings in richer countries.
During the quarter, Pfizer and BioNTech reached agreements to provide additional supply to the United States and the European Union.
The drugmaker said it reached agreements with Israel to supply millions of doses in 2022, and with Canada to supply 125 million doses in 2022 and 2023, with options into 2024.
Criticism of profits
Pfizer has defended its approach to vaccine pricing, saying it has moderated pricing through a "pandemic phase" that could last into 2022 at levels "to encourage broad access."
Pfizer has said it is charging $19.50 per vaccine dose in the United States but has not disclosed profit margin.
Zain Rizvi, law and policy researcher at progressive NGO Public Citizen, said Pfizer's rising profits showed the need for governments to take action to save lives.
"Pfizer is cashing in on the crisis and hoarding technology, even as billions of people around the world go without a vaccine," Rizvi said in an email to AFP.
"Pfizer's profiteering shows the urgent need for governments to step in. Governments should require Pfizer to share technology with manufacturers around the world to help ramp up global production."
The company is building more capacity and expects to manufacture at least three billion doses in 2022, up from 2.5 billion now expected in 2021. In February, Pfizer said it expected to produce up to two billion doses in 2021.
Pfizer shares dipped 0.1 percent to $39.78 in early afternoon trading.