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(Reuters) – Pfizer (NYSE:PFE) on Wednesday forecast 2024 sales that were as much as $5 billion below Wall Street expectations due mostly to declining demand for COVID vaccines and treatment, driving shares down 7% in premarket trading.
The lower forecasts come a day after the drugmaker said it would reorganize its cancer division to include the acquisition of Seagen. It also raised its cost-cut target by $500 million on Wednesday.
The drugmaker’s shares, which are already down over 44% this so far this year, were down 7% in premarket trading and set to erase over $10 billion in market capitalization, if losses continued during regular trading.
Shares of Moderna (NASDAQ:MRNA) fell 4.1% and Pfizer’s German partner in the vaccine BioNTech SE (O:BNTX) fell 3.9% premarket.
The company has been under pressure from a steep fall in sales of its COVID-19 vaccine and its antiviral pill Paxlovid, which helped it bring in over $100 billion in revenue last year.
The company now expects the products to generate $8 billion in total sales in 2024. Analysts were expecting sales of Comirnaty alone to be over $8 billion, and another $5 billion from Paxlovid.
Analysts said the forecast represented a more conservative outlook for the company’s COVID-19 franchise after it was much too aggressive in its outlook for 2023.
The COVID-19 sales targets “likely represent a floor for 2024 sales,” said J.P. Morgan analyst Chris Schott (ETR:1SXP).
The drop in COVID product sales had also forced Pfizer to launch a program to cut jobs and expenses, which is now expected to save least $4 billion a year.
Pfizer’s $43 billion deal for cancer drugmaker Seagen, which is expected to close on Thursday, is expected to add $3.1 billion to revenue next year.
The U.S. drugmaker expects annual revenue in the range of $58.5 billion to $61.5 billion, compared with analysts’ average estimate of $63.17 billion, according to LSEG data.
The company forecast adjusted profit in the range of $2.05 to $2.25 per share, lower than analysts’ expectation of $3.16.
