NEW YORK--(BUSINESS WIRE)-- Pfizer Inc. (NYSE: PFE) reported strong financial results for first-quarter 2022 and updated certain components of 2022 financial guidance(4). Pfizer reaffirmed its previous 2022 revenue guidance, including its guidance for Comirnaty(1), the Pfizer-BioNTech SE (BioNTech) COVID-19 vaccine, and for Paxlovid, its oral COVID-19 treatment, despite unfavorable impacts from foreign exchange.

The first-quarter 2022 earnings presentation and accompanying prepared remarks from management as well as the quarterly update to Pfizer’s R&D pipeline can be found on the Pfizer website.

Dr. Albert Bourla, Chairman and Chief Executive Officer, stated: “I am very proud of our performance this quarter, both from a financial perspective and from the standpoint of trying to be a force for good in the world. We continue to supply the world with Comirnaty, which remains a critical tool for helping patients and societies avoid the worst impacts of the COVID-19 pandemic, and we are on track to fulfill our commitment to deliver at least 2 billion doses to low- and middle-income countries in 2021 and 2022, including at least 1 billion doses this year. In addition, we are delivering on our production commitments for Paxlovid, which is already having a profound impact on the lives of patients. In response to the devastating war in Ukraine, and as a company that is dedicated to promoting human health, we have chosen to continue to supply the people of Russia with the medications they need, and are donating all profits from our Russian subsidiary to humanitarian efforts in Ukraine. We will continue to do all we can to support the health of all people, which is in line with our purpose: Breakthroughs that change patients’ lives.”

Frank D’Amelio, Chief Financial Officer and Executive Vice President, stated: “I am pleased to report another solid quarter for the company, highlighted by 82% operational revenue growth overall and 2% operational growth excluding Comirnaty and Paxlovid. Operational growth this quarter excluding these COVID-19 products would have been 5% if not for a 2% negative impact from losses of patent exclusivity for certain products and a 1% negative impact from fewer selling days this quarter compared to the prior-year quarter. We also entered the open market to repurchase shares of our stock for the first time since 2019. We will continue to thoughtfully deploy our capital in a variety of shareholder-friendly ways with the goal of maximizing the value we provide to all of our stakeholders, including patients and shareholders.”

Results for the first quarter of 2022 and 2021(5) are summarized below.

($ in millions, except per share amounts)

Beginning in the first quarter of 2022, Adjusted(3) financial measures include expenses for all acquired in-process research and development (IPR&D) costs incurred in connection with upfront and milestone payments on collaboration and in-license agreements, including premiums on equity securities, as well as asset acquisitions of acquired IPR&D. Previously, certain of these items were excluded from Adjusted(3) results. The change to include all acquired IPR&D expenses negatively impacted Adjusted(3) diluted EPS by $0.05 in first-quarter 2022 and had no impact on Adjusted(3) diluted EPS in first-quarter 2021. In connection with this change, acquired IPR&D expenses are now reported as a separate income statement line item and will equally impact both Reported(2) and Adjusted(3) results. These costs were previously recorded within the R&D expenses line item. Prior period amounts have been revised to conform to the current period presentation.

Also in the first quarter of 2022, Pfizer implemented a change in policy to exclude all amortization of intangibles from Adjusted(3) income, which favorably impacted Adjusted(3) diluted EPS by $0.01 in first-quarter 2022 and by $0.02 in first-quarter 2021. Prior period amounts have been revised to conform to the current period presentation.

Business development activities completed in 2021 and 2022(5) impacted financial results in the periods presented(6). 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(7).

Pfizer’s 2022 financial guidance is presented below. This guidance includes management’s expectations for contributions from the entire company, including Comirnaty(1) and Paxlovid. It also includes for the first time a new line item for acquired IPR&D expenses which, beginning in first-quarter 2022, are fully included within Adjusted(3) results for all periods presented.

Adjusted(3) Cost of Sales as a Percentage of Revenues

Adjusted(3) SI&A Expenses

Adjusted(3) R&D Expenses

Acquired IPR&D Expenses(4)

(approximately $0.1 billion of which was previously included in Adjusted(3) R&D Expenses guidance)

(previously approximately $1.8 billion of income)

Effective Tax Rate on Adjusted(3) Income

The guidance range for revenues remains unchanged and represents 27% operational growth from 2021 revenues at the midpoint. In addition, this guidance includes the following reaffirmed assumptions for Pfizer’s COVID-19-related products:

Guidance for Adjusted(3) R&D expenses is being increased as a result of planned incremental investments in COVID-19-related vaccine and anti-viral life-cycle management programs as well as various other projects. In addition, a new line item has been added to financial guidance for acquired IPR&D expenses, which will now be fully included within Adjusted(3) results.

The midpoint of the guidance range for Adjusted diluted EPS(3) reflects a 61% operational increase over the 2021 Adjusted diluted EPS(3) of $4.06, which has been revised from its original presentation to exclude all amortization of intangibles and to include the impact of all acquired IPR&D expenses.

The following table illustrates the main drivers of updates to financial guidance for revenues and Adjusted diluted EPS(3) since the previous guidance update on February 8, 2022:

Previous Guidance (as of Feb. 8, 2022)

Impact of Changes in Foreign Exchange Rates

Impact of Incremental Acquired IPR&D(4)

Current Guidance (as of May 3, 2022)

Financial guidance for Adjusted diluted EPS(3) is calculated using approximately 5.75 billion weighted average shares outstanding, and assumes no additional share repurchases in 2022. The expected increase in weighted average shares outstanding compared to 2021 of approximately 50 million shares has an unfavorable impact on 2022 Adjusted diluted EPS(3) of $0.04 at the midpoint of the guidance range.

QUARTERLY FINANCIAL HIGHLIGHTS (First-Quarter 2022 vs. First-Quarter 2021)

First-quarter 2022 revenues totaled $25.7 billion, an increase of $11.1 billion, or 77%, compared to the prior-year quarter, reflecting operational growth of $11.9 billion, or 82%, as well as an unfavorable impact of foreign exchange of $778 million, or 5%.

Compared to the prior-year quarter, first-quarter 2022 revenue growth was unfavorably impacted by approximately $200 million as a result of having one fewer selling day in the U.S. and one fewer selling day in international markets. This unfavorable impact is expected to reverse in the fourth quarter of 2022.

First-quarter 2022 operational growth was primarily driven by:

partially offset primarily by lower revenues for:

GAAP Reported(2) Income Statement Highlights

SELECTED REPORTED COSTS AND EXPENSES(2)

Acquired IPR&D Expenses(2)

Effective Tax Rate on Reported Income(2)

First-quarter 2022 Cost of Sales(2) as a percentage of revenues increased 10.3 percentage points compared with the prior-year quarter. The drivers for the increase include, among other things:

SI&A Expenses(2) decreased 5% operationally in first-quarter 2022 compared with the prior-year quarter, reflecting, among other things:

First-quarter 2022 R&D Expenses(2) increased 16% operationally compared with the prior-year quarter, primarily driven by increased investments across multiple late-stage clinical programs, as well as additional spending on programs to prevent and treat COVID-19.

Acquired IPR&D Expenses(2) are being disclosed separately from other R&D expenses beginning this quarter. The increase in acquired IPR&D Expenses(2) compared to the prior-year quarter was driven by an upfront cash payment and a premium paid on an equity investment in connection with Pfizer’s collaboration agreement with Biohaven Pharmaceutical Holding Company Ltd. (Biohaven), as well as a premium paid on an equity investment associated with Pfizer’s collaboration agreement with BioNTech to develop a potential mRNA vaccine against shingles.

Pfizer recorded $350 million of other deductions––net(2) in first-quarter 2022 compared with $1.0 billion of other income––net(2) in first-quarter 2021. The period-over-period change was primarily driven by:

Pfizer’s effective tax rate on Reported income(2) for first-quarter 2022 decreased compared to the prior-year quarter primarily due to a favorable change in the jurisdictional mix of earnings.

SELECTED ADJUSTED(3) COSTS AND EXPENSES

Adjusted(3) SI&A Expenses

Adjusted(3) R&D Expenses

Adjusted(3) Other (Income)/Deductions––net

Effective Tax Rate on Adjusted Income(3)

Reconciliations of certain Reported(2) to Adjusted(3) 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 8, 2022)

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.

Please find Pfizer’s press release and associated financial tables, including reconciliations of certain GAAP reported to non-GAAP adjusted information, at the following hyperlink: https://investors.pfizer.com/files/doc_financials/2022/q1/Q1-2022-PFE-Earnings-Release.pdf

(Note: If clicking on the above link does not open up a new web page, you may need to cut and paste the above URL into your browser's address bar.)

For additional details, see the attached financial schedules, product revenue tables attached to the press release located at the hyperlink referred to above and the attached disclosure notice.

(1) Comirnaty includes direct sales and alliance revenues related to sales of the Pfizer-BioNTech SE (BioNTech) COVID-19 vaccine, which are recorded within Pfizer’s Vaccines therapeutic area. It does not include revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the Pfizer CentreOne contract development and manufacturing organization. Revenues related to these manufacturing activities totaled $47 million for first-quarter 2022.

(2) Revenues is defined as revenues in accordance with U.S. generally accepted accounting principles (GAAP). Reported net income and its components are defined as net income attributable to Pfizer Inc. and its components in accordance with U.S. GAAP. Reported diluted earnings per share (EPS) is defined as diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. GAAP.

(3) Adjusted income and Adjusted diluted EPS are defined as U.S. GAAP net income attributable to Pfizer Inc. common shareholders and reported EPS attributable to Pfizer Inc. common shareholders—diluted before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items. See the accompanying reconciliations of certain GAAP Reported to Non-GAAP Adjusted information for the first quarter of 2022 and 2021. Adjusted income and its components and Adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS(2). See the Non-GAAP Financial Measure: Adjusted Income section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Pfizer’s 2021 Annual Report on Form 10-K and the accompanying Non-GAAP Financial Measure: Adjusted Income section of this press release for a definition of each component of Adjusted income as well as other relevant information.

(4) Pfizer does not provide guidance for GAAP Reported financial measures (other than revenues and acquired IPR&D expenses) or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP Reported financial measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of pending litigation, unusual gains and losses, certain acquisition-related expenses, gains and losses from equity securities, actuarial gains and losses from pension and postretirement plan remeasurements and potential future asset impairments without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP Reported results for the guidance period.

Financial guidance for full-year 2022 reflects the following:

(5) Pfizer’s fiscal year-end for international subsidiaries is November 30 while Pfizer’s fiscal year-end for U.S. subsidiaries is December 31. Therefore, Pfizer’s first quarter for U.S. subsidiaries reflects the three months ended on April 3, 2022 and April 4, 2021, while Pfizer’s first quarter for subsidiaries operating outside the U.S. reflects the three months ended on February 27, 2022 and February 28, 2021.

(6) The following business development activity, among others, impacted financial results for the current or prior fiscal year:

(7) References to operational variances in this press release pertain to period-over-period changes that exclude the impact of foreign exchange rates. Although exchange rate changes are part of Pfizer’s business, they are not within Pfizer’s control and since they can mask positive or negative trends in the business, Pfizer believes presenting operational variances excluding these foreign exchange changes provides useful information to evaluate Pfizer’s results.

(8) Emergency uses of the Pfizer-BioNTech COVID-19 Vaccine and Paxlovid have not been approved or licensed by the FDA. Emergency uses of Comirnaty have been authorized by the FDA, under an Emergency Use Authorization (EUA) to prevent Coronavirus Disease 2019 (COVID-19) in individuals 5 years of age and older. Comirnaty is licensed by the FDA for individuals 16 years of age and older. In addition, Comirnaty is under EUA for individuals ages 12 through 15, a third dose for certain immunocompromised individuals 5 years of age and older, a booster dose for individuals 12 years of age and older, and a second booster dose for individuals 50 years of age and older and for certain immunocompromised individuals 12 years of age and older. Paxlovid has been authorized for emergency use by the FDA under an EUA, for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg [88 lbs]) with positive results of direct SARS-CoV-2 viral testing, and who are at high-risk for progression to severe COVID-19, including hospitalization or death. The emergency uses are only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of the medical product under Section 564(b)(1) of the FD&C Act unless the declaration is terminated or authorization revoked sooner. Please see the EUA Fact Sheets at www.cvdvaccine-us.com and www.covid19oralrx.com.

(9) Humira® is a registered trademark of AbbVie Biotechnology Ltd.

DISCLOSURE NOTICE: Except where otherwise noted, the information contained in this earnings release and the related attachments is as of May 3, 2022. We assume no obligation to update any forward-looking statements contained in this earnings release and the related attachments as a result of new information or future events or developments.

This earnings release and the related attachments contain forward-looking statements about, among other topics, our anticipated operating and financial performance; reorganizations; business plans, strategy and prospects; expectations for our product pipeline, in-line products and product candidates, including anticipated regulatory submissions, data read-outs, study starts, approvals, clinical trial results and other developing data, revenue contribution, growth, performance, timing of exclusivity and potential benefits; strategic reviews; capital allocation objectives; dividends and share repurchases; plans for and prospects of our acquisitions, dispositions and other business development activities, and our ability to successfully capitalize on these opportunities; manufacturing and product supply; our efforts to respond to COVID-19, including the Pfizer-BioNTech COVID-19 vaccine (Comirnaty) and our oral COVID-19 treatment (Paxlovid); and our expectations regarding the impact of COVID-19 on our business, operations and financial results that involve substantial risks and uncertainties. You can identify these statements by the fact that they use future dates or use words such as “will,” “may,” “could,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “assume,” “target,” “forecast,” “guidance,” “goal,” “objective,” “aim,” “seek,” “potential,” “hope” and other words and terms of similar meaning.

Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following:

Risks Related to Our Business, Industry and Operations, and Business Development:

Risks Related to Government Regulation and Legal Proceedings:

Risks Related to Intellectual Property, Technology and Security:

We cannot guarantee that any forward-looking statement will be realized. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors are cautioned not to put undue reliance on forward-looking statements. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our subsequent reports on Form 10-Q, in each case including in the sections thereof captioned “Forward-Looking Information and Factors That May Affect Future Results” and “Item 1A. Risk Factors,” and in our subsequent reports on Form 8-K.

This earnings release may include discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data. In addition, clinical trial data are subject to differing interpretations, and, even when we view data as sufficient to support the safety and/or effectiveness of a product candidate or a new indication for an in-line product, regulatory authorities may not share our views and may require additional data or may deny approval altogether.

The information contained on our website or any third-party website is not incorporated by reference into this earnings release.

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