Cost-saving program ‘will touch all parts of the business’ but won’t affect Seagen acquisition, Pfizer says
Pfizer Inc. PFE, +5.51% on Monday sought to reassure investors that it can slash costs to repair the damage done by underwhelming COVID-19 product sales.
The relatively low uptake of the latest COVID-19 vaccines, which hit the market in September, provides a good conservative baseline for estimating future vaccination rates, Pfizer executives suggested. “We are right now in the middle of COVID fatigue, where everyone wants to forget about the disease, and we are experiencing a peak of anti-vaccination rhetoric,” Pfizer CEO Dr. Albert Bourla said on the call.
That news triggered some harsh assessments from analysts. Before the call Monday, BMO Capital Markets analyst Evan David Seigerman cut his price target for Pfizer shares to $33, from $44 previously, saying the “massive” guidance cut was desperately needed but may not be enough for management to regain credibility. “This is a pivotal moment in the post-COVID Pfizer narrative; management must seize it,” Seigerman wrote.
The company’s clarification Monday that 2024 net operating expenses would fall by $3.5 billion, before factoring in the Seagen acquisition, came as “a positive surprise,” Leerink Partners analyst David Risinger wrote in a research note. Risinger maintained a market-perform rating on Pfizer shares, “given uncertain long-term growth prospects.”
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