(Reuters) -U.S. drugmaker Pfizer (NYSE:PFE) on Wednesday launched a new multi-year program to reduce its expenses by about $1.5 billion by the end of 2027, adding on to a $4 billion cost cutting plan it announced last year.
Investors have fled from Pfizer as pandemic worries declined and billions of dollars in COVID-19 vaccine and treatment sales disappeared. The company responded with a $43 billion purchase of cancer drugmaker Seagen, the cost cuts, and an internal restructuring.
Pfizer's shares were up 2.6% at $29.30 in afternoon trading. They are still off around 24% over the past year and about half of their peak pandemic value of December 2021.
Pfizer made the disclosure on Wednesday in a filing with the Securities and Exchange Commission.
The company said it would record one-time charges, mainly related to severance and implementation costs, of $1.7 billion as part of the new program. It expects to record a majority of the charges this year, with the actual cash outlays expected in 2025 and 2026.
The focus will be on "operational efficiencies, network structure changes, and product portfolio enhancements," the company said.
Pfizer said that the program will take multiple years because of the complexity in manufacturing and longer lead times required to make changes.
A spokesperson said none of the job cuts associated with the new program have been announced yet.
She said further details of the program would likely be disclosed at future earnings calls and investor events.
Pfizer raised its annual earnings forecast and posted a better-than-expected first-quarter profit earlier this month, helped in part by the cost reductions. Chief Financial Officer David Denton said then that the cuts had helped improve its margins.
"Our cost control element across our manufacturing platform was really strong. We expect that to continue to be a focus," he said then.