PharmiWeb.com - Global Pharma News & Resources
04-May-2021

PFIZER REPORTS STRONG FIRST-QUARTER 2021 RESULTS

  • First-Quarter 2021 Revenues of $14.6 Billion, Reflecting 42% Operational Growth; Excluding Revenues for BNT162b2 of $3.5 Billion, Revenues Grew 8% Operationally Including a Negative 5% Impact from Pricing
  • First-Quarter 2021 Reported Diluted EPS(1) of $0.86, Adjusted Diluted EPS(2) of $0.93
  • Raises Full-Year 2021 Guidance(3) for Revenues to a Range of $70.5 to $72.5 Billion and Adjusted Diluted EPS(2) to a Range of $3.55 to $3.65, Primarily Reflecting Updates to Anticipated Contributions from BNT162b2 Partially Offset by Additional R&D Expenses for Vaccines to Protect Against COVID-19 as Well as Other mRNA-Based Development Programs and COVID-19 Antivirals
    • Now Anticipates Revenues of Approximately $26 Billion for BNT162b2, Reflecting 1.6 Billion Doses Expected to be Delivered in 2021 Under Signed Contracts as of Mid-April 2021
    • Raises Revenue Guidance Range Excluding BNT162b2 by $200 Million, Reflecting Continued Strong Performance of the Business
  • Enters Into Contracts to Supply BNT162b2 to Canada and Israel for Periods Beyond 2021; Currently Negotiating Similar Potential Contracts with Multiple Other Countries
  • Maintains Quarterly Dividend for Second-Quarter 2021 at $0.39/Share; Dividend Will Not Be Reduced as a Result of the Initiation of a Quarterly Dividend by Viatris Inc. (Viatris)(4)

NEW YORK--(BUSINESS WIRE)--Pfizer Inc. (NYSE: PFE) reported financial results for first-quarter 2021 and raised 2021 guidance(3) for revenues and Adjusted diluted EPS(2) driven by the updated expectations for contributions to 2021 performance from BNT162b2, the Pfizer-BioNTech SE (BioNTech) COVID-19 vaccine, as well as the strong performance of the business excluding BNT162b2, partially offset by anticipated additional R&D investments into vaccines to protect against COVID-19, as well as other mRNA-based development programs and COVID-19 antivirals.


Additionally, Pfizer published this morning on its website the first-quarter 2021 earnings presentation and accompanying prepared remarks from management.

EXECUTIVE COMMENTARY

Dr. Albert Bourla, Chairman and Chief Executive Officer, stated: “I am extremely proud of the way we have begun 2021, delivering strong financial results in the first quarter. Even excluding the growth provided from BNT162b2, our revenues grew 8% operationally, which aligns with our stated goal of delivering at least a 6% compound annual growth rate through 2025. In addition, we have achieved important clinical, regulatory and commercial milestones across our pipeline and portfolio while also continuing to increase our capacity to supply urgently-needed doses of BNT162b2 to the world. Each of these accomplishments further demonstrates our commitment to Pfizer’s purpose: Breakthroughs that change patients’ lives.”

Frank D’Amelio, Chief Financial Officer and Executive Vice President, Global Supply, stated: “I am very happy with the performance of all of our therapeutic areas this quarter. Multiple innovative and biosimilar products across our portfolio delivered growth, demonstrating the strength of our business and the depth and breadth of our growth drivers. I am also pleased with our recent announcement that we will maintain our dividend for second-quarter 2021 at the current level, even after Viatris begins paying its dividend. This will make 2021 the 12th year in a row with a dividend increase. I remain confident in Pfizer’s ability to continue to deliver on our commitments to our patients and shareholders in 2021 and beyond.”

Results for the first quarter of 2021 and 2020(5) are summarized below.

OVERALL RESULTS

 

 

 

 

($ in millions, except
per share amounts)

First-Quarter

 

2021

2020

Change

Revenues

$ 14,582

 

$ 10,083

 

45%

Reported Net Income(1)

4,877

 

3,355

 

45%

Reported Diluted EPS(1)

0.86

 

0.60

 

44%

Adjusted Income(2)

5,262

 

3,546

 

48%

Adjusted Diluted EPS(2)

0.93

 

0.63

 

47%

 

 

 

 

REVENUES

 

 

 

 

 

($ in millions)

First-Quarter

 

2021

2020

% Change

 

Total

Oper.

Vaccines

$ 4,894

 

$ 1,611

 

*

*

Oncology

2,862

 

2,435

 

18%

16%

Internal Medicine

2,594

 

2,332

 

11%

10%

Hospital

2,343

 

2,088

 

12%

10%

Inflammation & Immunology

1,065

 

978

 

9%

7%

Rare Disease

824

 

639

 

29%

25%

Total Revenue

$ 14,582

 

$ 10,083

 

45%

42%

 

 

 

 

 

* Indicates calculation not meaningful.

Following the completion of the spin-off of the Upjohn Business(4) in the fourth quarter of 2020, Pfizer now operates as a focused innovative biopharmaceutical company engaged in the discovery, development, manufacturing, marketing, sales and distribution of biopharmaceutical products worldwide.

Revenues and expenses associated with the Upjohn Business(4) for first-quarter 2020 have been recategorized as discontinued operations and excluded from Adjusted(2) results. Pfizer’s Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products, which had been reported within the results of the Upjohn Business(4) in the first three quarters of 2020, is now included within the Hospital therapeutic area for all periods presented.

Business development activities completed in 2020 and 2021 impacted financial results in the periods presented(4). Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts. References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates(6).

2021 FINANCIAL GUIDANCE(3)

Financial guidance reflects management’s current expectations for operational performance, foreign exchange rates and management’s current projections as to the severity, duration and global macroeconomic impact of the COVID-19 pandemic.

Key guidance assumptions included in these projections broadly reflect a continued recovery in macroeconomic and healthcare activity throughout 2021 as more of the population becomes vaccinated against COVID-19. These assumptions are guided by the trajectory of current infection rates in many parts of the world and the expected timeline for broad access to effective vaccines.

Pfizer is raising its guidance ranges for revenues, Adjusted cost of sales(2) as a percentage of revenues, Adjusted R&D expenses(2) and Adjusted diluted EPS(2) to reflect the updated expectations for contributions to 2021 performance from BNT162b2 and the continued strong performance of the business excluding BNT162b2, partially offset by anticipated additional R&D investments into vaccines to protect against COVID-19, as well as early research investments into other mRNA-based development programs and COVID-19 antivirals. Current 2021 financial guidance is presented below.

 

 

Revenues

$70.5 to $72.5 billion

(previously $59.4 to $61.4 billion)

Adjusted Cost of Sales(2) as a Percentage of Revenues

38.0% to 39.0%

(previously 32.0% to 33.0%)

Adjusted SI&A Expenses(2)

$11.0 to $12.0 billion

Adjusted R&D Expenses(2)

$9.8 to $10.3 billion

(previously $9.2 to $9.7 billion)

Adjusted Other (Income)/Deductions(2)

Approximately $2.2 billion of income

Effective Tax Rate on Adjusted Income(2)

Approximately 15.0%

Adjusted Diluted EPS(2)

$3.55 to $3.65

(previously $3.10 to $3.20)

 

 

The midpoint of the guidance range for revenues represents 71% growth from 2020 revenues, including an expected $1.3 billion, or 3%, favorable impact from changes in foreign exchange rates. The midpoint of the updated guidance range for Adjusted diluted EPS(2) reflects a 59% increase over 2020 actual results, including an expected $0.09, or 4%, benefit due to favorable changes in foreign exchange rates.

Financial guidance for Adjusted diluted EPS(2) is calculated using approximately 5.7 billion weighted average shares outstanding, and does not currently assume any share repurchases in 2021.

Update to Assumptions Related to BNT162b2 Within Guidance

Due to additional supply agreements that have been signed since the previous guidance release, Pfizer is updating the revenue assumptions related to BNT162b2 incorporated within the above guidance ranges. The updated assumptions are summarized below.

 

 

Revenues for BNT162b2

Approximately $26 billion

(previously approximately $15 billion)

Adjusted Income(2) Before Tax (IBT)

Margin for BNT162b2

High-20s as a Percentage of Revenues

 

 

The BNT162b2 revenue projection incorporated within Pfizer’s 2021 financial guidance includes 1.6 billion doses that are expected to be delivered in 2021 under contracts that have been signed through mid-April 2021. This guidance may be adjusted in the future as additional contracts are executed.

Adjusted(2) IBT margin guidance for BNT162b2 incorporates the current expectation for revenues for the product, less anticipated Adjusted(2) costs to manufacture, market and distribute BNT162b2, including applicable royalty expenses and a 50% gross margin split with BioNTech, as well as shared R&D expenses related to BNT162b2 and costs associated with other assets currently in development for the prevention and treatment of COVID-19. It also includes R&D expenses related to other mRNA-based development programs which are excluded from the collaboration with BioNTech. It does not include an allocation of corporate or other overhead costs.

Selected Financial Guidance Ranges Excluding BNT162b2

Pfizer is increasing its previous 2021 financial guidance for revenues and is reaffirming guidance ranges for Adjusted cost of sales(2) as a percentage of revenues and Adjusted diluted EPS(2) with BNT162b2 contributions excluded.

 

 

Revenues

$44.6 to $46.6 billion

(previously $44.4 to $46.4 billion)

Adjusted Cost of Sales(2) as a Percentage of Revenues

21% to 22%

Adjusted Diluted EPS(2)

$2.50 - $2.60

 

 

The midpoint of the revenue guidance range above reflects approximately 6% operational growth compared to 2020 when all revenue impacts related to BNT162b2 are excluded from both periods, which is in line with the company’s stated goal of at least a 6% revenue compound annual growth rate through 2025. The midpoint of Pfizer’s Adjusted diluted EPS(2) guidance range excluding BNT162b2 reflects approximately 11% operational growth compared to the prior year.

CAPITAL ALLOCATION

  • During the first three months of 2021, Pfizer paid $2.2 billion of cash dividends, or $0.39 per share of common stock.
  • In April 2021, Pfizer announced that its board of directors declared a $0.39 second-quarter 2021 dividend. The board decided to maintain Pfizer’s quarterly dividend at its current level despite the planned declaration of a dividend payment by Viatris that would be payable to those Pfizer shareholders that have elected to continue holding Viatris shares received from the combination of Upjohn and Mylan(4). The decision to maintain the dividend was made based on Pfizer’s strong financial performance and will result in increased dividend income to those shareholders continuing to own shares of both Pfizer and Viatris(4).
  • No share repurchases have been completed to date in 2021. As of May 4, 2021, Pfizer’s remaining share repurchase authorization is $5.3 billion. Current 2021 financial guidance does not reflect any share repurchases in 2021.
  • First-quarter 2021 diluted weighted-average shares outstanding used to calculate Reported(1) and Adjusted(2) diluted EPS was 5,662 million shares, an increase of 49 million shares compared to the prior-year quarter primarily due to shares issued for employee compensation programs.

QUARTERLY FINANCIAL HIGHLIGHTS (First-Quarter 2021 vs. First-Quarter 2020)

First-quarter 2021 revenues totaled $14.6 billion, an increase of $4.5 billion, or 45%, compared to the prior-year quarter, reflecting operational growth of $4.2 billion, or 42%, as well as a favorable impact of foreign exchange of $284 million, or 3%.

Compared with the prior-year quarter, first-quarter 2021 revenues were favorably impacted by approximately $400 million as a result of first-quarter 2021 having three additional selling days in the U.S. and four additional selling days in international markets. This increase in selling days will be offset in fourth-quarter 2021, resulting in essentially the same number of selling days in full-year 2021 as full-year 2020.

The favorable impact in first-quarter 2021 from selling days was partially offset by the non-recurrence of favorable impacts related to COVID-19 on first-quarter 2020, including increased demand for certain products of approximately $150 million and additional wholesaler inventories of approximately $100 million. The net favorable impact on first-quarter 2021 revenues of all of the above factors was approximately $150 million, accounting for approximately 1.5 percentage points of operational growth.

First-quarter 2021 operational growth was primarily driven by:

  • BNT162b2, which contributed $3.5 billion in global revenues;
  • Eliquis globally, up 25% operationally, led by growth in the U.S., emerging markets and developed Europe, driven primarily by continued increased adoption in non-valvular atrial fibrillation and oral anti-coagulant market share gains, as well as a favorable adjustment related to the Medicare “coverage gap” provision resulting from lower than previously expected discounts in prior periods;
  • Vyndaqel/Vyndamax globally, up 88% operationally, primarily driven by the approval in February 2020 of the transthyretin amyloid cardiomyopathy (ATTR-CM) indication in the European Union (EU), as well as the continued strong uptake of the ATTR-CM indication in the U.S. and Japan;
  • Xeljanz globally, up 18% operationally, primarily driven by:
    • 16% growth in the U.S., primarily reflecting higher volumes within the rheumatoid arthritis (RA), psoriatic arthritis (PsA) and ulcerative colitis (UC) indications, driven by reaching additional patients through improvements in formulary access; and
    • 21% operational growth in international markets, primarily reflecting continued uptake in the RA indication and, to a lesser extent, the UC indication in certain developed markets;
  • Xtandi in the U.S., up 28%, primarily driven by continued strong demand in the metastatic and non-metastatic castration-resistant prostate cancer indications, as well as the metastatic castration-sensitive prostate cancer indication, which was approved in the U.S. in December 2019; and
  • Inlyta globally, up 34% operationally, primarily reflecting increased demand in the U.S. and developed Europe following the approvals in 2019 for combinations of certain immune checkpoint inhibitors and Inlyta for the first-line treatment of patients with advanced renal cell carcinoma; as well as
  • Biosimilars, which grew 79% operationally to $530 million, primarily driven by recent oncology monoclonal antibody biosimilar launches of Ruxience (rituximab), Zirabev (bevacizumab) and Trazimera (trastuzumab) globally, as well as continued growth from Retacrit (epoetin) in the U.S.; and
  • Hospital products, which grew 10% operationally to $2.3 billion, primarily driven by Pfizer CentreOne, Pfizer’s contract manufacturing operation, reflecting sales of legacy Upjohn products to Viatris(4) and remdesivir to Gilead Sciences Inc., as well as growth from recent anti-infective product launches in international markets, partially offset by lower year-over-year volume for certain products globally due to a COVID-19-related surge in demand in the prior-year quarter,

partially offset primarily by lower revenues for:

  • Prevnar 13 in the U.S., down 20%, primarily driven by:
    • a 57% decline for the adult indication, driven by disruptions to wellness visits due to COVID-19-related mobility restrictions or limitations, including delaying other vaccinations while receiving COVID-19 inoculations due to CDC guidance, as well as the impact of the revised Advisory Committee on Immunization Practices recommendation for the adult indication to shared clinical decision making and the continued impact of a lower remaining eligible adult population; and
    • a 6% decline for the pediatric indication, primarily reflecting the unfavorable impact of COVID-19 and lower year-over-year birth rates(8);
  • Ibrance in the U.S., down 7%, which reflects relatively stable U.S. prescription volume demand and Ibrance’s continued strong leadership position within the CDK 4/6 class, but also an increase in the proportion of patients accessing Ibrance through Pfizer’s Patient Assistance Program due to economic hardships brought on by the COVID-19 pandemic which is expected to normalize over time as the economic impact of the pandemic subsides; and
  • Chantix in the U.S., down 21%, driven by a negative impact from the COVID-19 pandemic resulting in a decline in patient visits to doctors for preventative health purposes, as well as the loss of patent protection in the U.S. in November 2020.

GAAP Reported(1) Income Statement Highlights

SELECTED REPORTED COSTS AND EXPENSES(1)

 

 

 

 

 

 

($ in millions)

First-Quarter

 

2021

2020

% Change

 

Total

Oper.

Cost of Sales(1)

$ 4,211

 

$ 1,940

 

*

*

Percent of Revenues

28.9

%

19.2

%

N/A

N/A

SI&A Expenses(1)

2,783

 

2,541

 

10%

8%

R&D Expenses(1)

2,014

 

1,672

 

20%

20%

Total

$ 9,008

 

$ 6,154

 

46%

43%

 

 

 

 

 

 

Other (Income)/Deductions––net(1)

($1,004)

 

$190

 

*

*

Effective Tax Rate on Reported Income(1)

14.2

%

12.6

%

 

 

 

 

 

 

 

 

* Indicates calculation not meaningful.

 

First-quarter 2021 Cost of Sales(1) as a percentage of revenues increased 9.7 percentage points compared with the prior-year quarter. The drivers for the increase include, among other things:

  • an increase of approximately 8 percentage points associated with sales of BNT162b2, which includes a charge for the 50% gross margin split with BioNTech; and
  • unfavorable changes in product mix, including higher sales of lower margin products from the Pfizer CentreOne operation, partially offset by the favorable impact of higher alliance revenues.

SI&A Expenses(1) increased 8% operationally in first-quarter 2021 compared with the prior-year quarter, reflecting, among other things:

  • an increase in deferred compensation savings plan expenses;
  • costs related to BNT162b2, primarily driven by a higher provision for healthcare reform fees based on sales; and
  • incremental costs associated with the implementation of certain cost reduction and productivity initiatives,

partially offset by:

  • lower spending on Chantix following its loss of patent protection in the U.S. in November 2020.

First-quarter 2021 R&D Expenses(1) increased 20% operationally compared with the prior-year quarter, which primarily reflects spending on Pfizer’s efforts to develop BNT162b2 and therapeutics to help treat COVID-19.

Pfizer recorded $1.0 billion of other income––net(1) in first-quarter 2021 compared with $190 million of other deductions––net(1) in first-quarter 2020, primarily driven by net gains on equity securities in first-quarter 2021 versus net losses recorded in first-quarter 2020, higher net periodic benefit credits related to pension and postretirement plans and higher income from collaborations.

Adjusted(2) Income Statement Highlights

SELECTED ADJUSTED COSTS AND EXPENSES(2)

 

 

 

 

 

($ in millions)

First-Quarter

 

2021

2020

% Change

 

Total

Oper.

Adjusted Cost of Sales(2)

$ 4,177

 

$ 1,917

 

*

*

Percent of Revenues

28.6

%

19.0

%

N/A

N/A

Adjusted SI&A Expenses(2)

2,659

 

2,450

 

9%

7%

Adjusted R&D Expenses(2)

2,013

 

1,673

 

20%

19%

Total

$ 8,849

 

$ 6,041

 

46%

43%

 

 

 

 

 

Adjusted Other (Income)/Deductions––net(2)

($600)

 

($262)

 

*

*

Effective Tax Rate on Adjusted Income(2)

15.3

%

16.0

%

 

 

 

 

 

 

 

* Indicates calculation not meaningful.

 

Changes in Adjusted(2) costs and expenses in first-quarter 2021 compared to the prior-year quarter were driven primarily by the factors listed in the Reported(1) costs and expenses section above.

A full reconciliation of Reported(1) to Adjusted(2) financial measures and associated footnotes can be found in the financial tables section of the press release located at the hyperlink below.

RECENT NOTABLE DEVELOPMENTS (Since February 2, 2021)

Product Developments

  • Ibrance (palbociclib)
    • In February 2021, Pfizer announced that the U.S. Patent and Trade Office issued a U.S. Patent Term Extension certificate extending the term of U.S. Patent No. RE47,739 for Ibrance by more than four years until March 2027.
    • In March 2021, Pfizer announced the peer-reviewed publication of real-world evidence demonstrating that first-line therapy with Ibrance in combination with letrozole was associated with improved real-world progression-free survival and overall survival in women with hormone receptor-positive (HR+), human epidermal growth factor 2-negative (HER2-) metastatic breast cancer compared with letrozole alone. The findings represent the first comprehensive comparative effectiveness analysis of survival outcomes for a CDK 4/6 inhibitor in routine clinical practice and were published online in Breast Cancer Research.
  • Lorbrena (lorlatinib) -- In March 2021, Pfizer announced that the U.S. Food and Drug Administration (FDA) approved the supplemental New Drug Application (sNDA) for Lorbrena, expanding the indication to include first-line treatment of people with anaplastic lymphoma kinase (ALK)-positive non-small cell lung cancer (NSCLC). Lorbrena is now indicated for adults with metastatic NSCLC whose tumors are ALK-positive as detected by an FDA-approved test. The FDA action converts the 2018 accelerated approval to full approval.
  • Panzyga (immune globulin intravenous [human] ifas 10% liquid preparation) -- In February 2021, Pfizer announced that the FDA approved the supplemental Biologics License Application (sBLA) for Panzyga to treat adult patients with a rare neurological disease of the peripheral nerves called chronic inflammatory demyelinating polyneuropathy (CIDP). Panzyga is the only intravenous immunoglobulin (IVIg) with two FDA-approved maintenance dosing options for CIDP.
  • TicoVac (Tick-borne Encephalitis Vaccine) -- In February 2021, Pfizer announced that the FDA accepted for Priority Review a Biologics License Application (BLA) for its tick-borne encephalitis (TBE) vaccine, as submitted for active immunization to prevent TBE in individuals 1 year of age and older. If approved, TicoVac would be the first vaccine in the U.S. to help protect adults and children who are visiting or living in TBE endemic areas. The Prescription Drug User Fee Act (PDUFA) goal date for a decision by the FDA is in August 2021.
  • Xeljanz (tofacitinib) -- In April 2021, Pfizer announced that the FDA has extended the review period for the sNDAs for Xeljanz / Xeljanz XR for the treatment of adults with active ankylosing spondylitis by three months, with a PDUFA goal date in early third-quarter 2021.

Pipeline Developments

A comprehensive update of Pfizer’s development pipeline was published today and is now available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of Pfizer’s research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.

  • Abrocitinib (PF-04965842)
    • In March 2021, Pfizer announced the publication of complete results from the JADE COMPARE study of its investigational oral, once-daily, Janus kinase 1 (JAK1) inhibitor in The New England Journal of Medicine (NEJM). The study evaluated the safety and efficacy of two doses of abrocitinib, 100 mg and 200 mg, versus placebo in adults with moderate to severe atopic dermatitis who were on background topical therapy. The study included an active control arm where patients were treated with dupilumab, a biologic treatment administered by subcutaneous injection.

Contacts

Media
Amy Rose 212.733.7410

Investors
Chuck Triano 212.733.3901
Bryan Dunn 212.733.8917


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Last Updated: 04-May-2021