Pfizer sees COVID-19 as ‘durable’ revenue stream as profits rise

New York, US - Pfizer sharply increased its 2021 profit projections, citing much higher COVID-19 vaccine sales which are on track to provide a ‘durable’ revenue stream in the wake of the pandemic.

The drugmaker reported a jump in first quarter profits based on surging revenues, with nearly one-fourth of sales coming from COVID-19 vaccines.

With German partner BioNTech, the pharma giant is ramping up vaccine production and now estimates 2021 revenues of US$26bn from the vaccine, up from the US$15bn projected in February.

But the surging profits have drawn criticism as governments face pressure to step in to ensure vaccines are provided to underserved countries.

Pfizer, which says it is on the cusp of winning US approval for individuals 12 to 15 years old to receive its vaccine, is holding talks with ‘basically all governments of the world’ about providing booster shots through 2024, chief executive Albert Bourla told analysts on a conference call on Tuesday.

The company is studying the efficacy of giving the jabs six or more months after the second vaccine dose, and developing doses that could be stored at standard refrigerated temperature for up to ten weeks.

Bourla expects ‘durable demand’ for COVID-19 vaccines, similar to that of the flu vaccine.

“It is our hope that the PfizerBioNTech vaccine will continue to have a global impact by helping to get the devastating pandemic under control and helping economies around the world not only open, but stay open,” Bourla said in prepared remarks.

That would create ‘a scenario in which Pfizer can continue to be both a leader and a beneficiary’, he said.

Pfizer has won wide praise for its technological prowess in developing a game-changing vaccine in record time. However, critics called the profits troubling given the divide in vaccine availability between rich and poor countries.

World Health Organization chief Tedros Adhanom Ghebreyesus last month decried a ‘shocking imbalance in the global distribution of vaccines’ and called for efforts to fortify the WHO’s Covax programmes, which aims to ensure that poorer nations can access the shots.

India and South Africa are leading an effort in the World Trade Organization to waive intellectual property and patent rules, at least temporarily, which would open the door to broader production of vaccines at a time when the virus is causing mass misery in India and some other countries.

President Joe Biden said on Tuesday he had not made a decision on whether to support a vaccine waiver, but that the US was moving ‘as quickly as we can’ to export doses.

Biden also said he was ready to ‘immediately’ begin vaccinations for 12 to 15 year olds as soon as Pfizer’s COVID shot is approved by regulators for the age group.

Additional supply

Pfizer reported net income of US$4.9bn, up 45 per cent from the same period of the prior year.

Revenues also jumped 45 per cent to US$14.6bn, including US$3.5bn in COVID-19 vaccine sales.

The results include the lift from COVID-19 vaccines, which generated profit margins of ‘high-20s’, implying around US$900mn in profits in the most recent quarter.

As of May 3, Pfizer and BioNTech have shipped about 430mn doses of the vaccine to 91 countries around the world.

The company has reached an agreement to provide up to 40mn doses for Covax, a globally-pooled coronavirus vaccine procurement effort aimed at providing vaccines to low and middle-income economies.

However, the company on Tuesday pointed to a series of deals to expand offerings in richer countries, including the United States, the European Union, Canada and Israel.

Pfizer has defended its approach to vaccine pricing, saying it has moderated pricing through a ‘pandemic phase’ that could last into 2022 at levels ‘to encourage broad access’.

The company said it is charging US$19.50 per vaccine dose in the United States, but has not disclosed its US profit margin.

The company is building more capacity and expects to manufacture at least 3bn doses in 2022, up from 2.5bn now expected in 2021. In February, Pfizer said it expected to produce up to 2bn doses in 2021.