News Item: AstraZeneca say profits collapsed last year; Pfizer profits for 2022 higher than forecasted
Covid vaccine maker AstraZeneca says 2021 profit dives
British Covid vaccine maker AstraZeneca said Thursday that net profit collapsed last year, hit by the vast takeover of US biotech firm Alexion and other charges, despite surging revenues.
Profit after tax slumped to just $112 million (98 million euros) compared with $3.2 billion in 2020, the pharmaceutical company said in a statement.
However, revenues including Covid-19 vaccine sales rebounded 41 percent to $37.4 billion.
The Covid jab, Vaxzevria, achieved full-year sales of almost $4 billion.
However, the group warned Thursday of declining coronavirus product sales this year as the deadly pandemic recedes.
– Strong growth –
“AstraZeneca continued on its strong growth trajectory in 2021,” said chief executive Pascal Soriot, noting strong progress on new medicines alongside the purchase and integration of Alexion.
“We also delivered on our promise of broad and equitable access to our Covid-19 vaccine with 2.5 billion doses released for supply around the world, and we made good progress on reducing our greenhouse gas emissions.”
The UK group faced vast costs last year following its $39-billion takeover of US biotech company Alexion, while it also took large impairment and restructuring charges.
AstraZeneca, which developed its Covid jab with Oxford University, initially offered the vaccine at cost during the pandemic in contrast to rivals including Pfizer, but indicated in November that it would start selling it at a profit.
Soriot added that the group was increasing its shareholder dividend after what he described as a “landmark year”.
The annual dividend was upped to $2.90 per share.
AstraZeneca added that it anticipates that Covid product sales will sink by “a low-to-mid twenties percentage” this year.
That is expected to be partially offset by sales of Evusheld, its preventative moniclonal antibody treatment for immunocompromised people.
Yet AstraZeneca warned that the gross profit margin from its Covid-19 medicines was expected to be “lower than the company average”.
The group also revealed Thursday that it had swung into a pre-tax annual loss of $265 million, after a $3.9-billion profit last time around.
In reaction to the results, AstraZeneca’s share price rallied 3.5 percent to 8,655 pence in early morning trade on London’s rising stock market.
– Jab ‘raised profile’ –
“The Covid vaccine has raised Astra’s global profile significantly, with its previous not-for-profit status now being removed,” said Hargreaves Lansdown analyst Keith Bowman.
“For now, and with further innovation and new drug successes ongoing, analyst consensus opinion continues to point to a strong buy.”
Rival drugmaker GlaxoSmithKline had reported Wednesday that 2021 profits had slumped by a quarter, after the prior year was boosted by asset sales.
GSK has thus far failed to produce a successful Covid vaccine unlike AstraZeneca, but is developing a jab alongside French peer Sanofi.
Pfizer sees Covid-19 drug sales topping $50 bn in 2022
Pfizer forecast more than $50 billion in 2022 sales for its Covid-19 vaccine and therapeutic on Tuesday as the pharmaceutical giant reported a more than doubling of annual profits on strong sales of its innoculation.
Pfizer, whose vaccinee developed with German company BioNTech was the first approved in the United States to counter the deadly virus, sees slightly lower 2022 revenues for the vaccine compared with the just-finished year, but a big infusion of revenues from Paxlovid, the company’s pill for Covid-19.
Chief Executive Albert Bourla described 2021 as a “watershed year” for Pfizer, adding that the company’s efforts in the pandemic “have fundamentally changed our company forever.”
Still, shares fell Tuesday following the results, which lagged estimates in terms of fourth-quarter revenues.
Besides vaccines, sales were mixed across Pfizer’s other divisions. Revenues dipped for internal medicine and inflammation and immunology, but rose for oncology, hospitals and rare disease.
Analysts have also projected higher 2022 profits compared with the company’s forecasts.
– Heavy interest in therapeutic –
Pfizer reported annual profits of $22 billion, more than double the 2020 level. Annual revenues nearly doubled to $81.3 billion, with $36.8 billion from the Covid-19 vaccine.
The company projected 2022 revenues of between $98 and $102 billion.
The results are the latest to show how the coronavirus has transformed Pfizer, which a year ago had projected just $15 billion in Covid-19 vaccines sales in 2021 and ended up selling more than twice that amount after repeatedly lifting the forecast.
For 2022, Pfizer expects $32 billion in revenue from Covid-19 vaccines and $22 billion in revenues from Paxlovid.
Bourla said the company is currently working on a new vaccine candidate based on the Omicron variant of Covid-19, as well as a new “potential next-generation oral Covid-19 treatment.”
The company expects to produce 120 million treatment courses for Paxlovid, with six million in the first quarter and 30 million the first half of 2022.
Pfizer executives described heavy interest in Paxlovid, with ongoing contract talks with about 100 governments around the world. The treatment has so far been approved in about 40 countries.
Bourla said the sales for Paxlovid “could be way bigger” than current forecasts. The 2022 estimate of $22 billion is based on signed contracts and negotiations where there is essentially an agreement, he said.
However, Chief Financial Officer Frank D’Amelio cautioned that there was “less potential upside” to 2022 estimates for Covid-19 vaccine revenues, compared with 2021 “when the vaccine was newly available and few people had received any doses of the vaccine.”
Morningstar’s Damien Conover estimated that Covid-19-related products will account for $60 billion in revenues in 2022, but fall to close to $5 billion by 2025.
“We expect increased near-term utilization of Covid vaccines will reduce the demand for these vaccines and treatments over the long term,” Conover said in a note. “We view Pfizer as slightly overvalued, with the market likely extrapolating strong Covid vaccine and treatment sales too far into the future.”
Bourla said the company’s scientists “continue to monitor the Covid-19 virus and believe it is unlikely that it will be fully eradicated in the foreseeable future.”
“That said, we now have the tools — in the forms of vaccines and treatments — that we believe will help enable us to not only better manage the pandemic but also help countries move into the endemic phase,” he said.
Shares fell 2.8 percent to $51.70.