By Bhanvi Satija and Raghav Mahobe
(Reuters) - Pfizer Inc (NYSE:PFE) on Tuesday reported higher-than-expected first-quarter revenue and profit, buoyed by demand for its COVID-19 products, and reaffirmed its 2023 earnings forecast as it banks on newer drugs to contribute to growth later this year.
The company has said it expects 2023 to be a low point for COVID product sales, before potentially returning to growth in 2024. But sales of both its vaccine and oral antiviral treatment came in above Wall Street estimates.
Pfizer still expects significantly lower sales of COVID products in the second quarter.
Wells Fargo (NYSE:WFC) analyst Mohit Bansal said it was a positive surprise that Pfizer did not lower its full-year COVID forecast.
Pfizer is pumping billions of dollars into research and acquisitions to mitigate an anticipated $17 billion hit to revenue by 2030 from patent expirations for top drugs, and a decline in demand for COVID products.
The company said it would become more balanced with allocating capital after a string of deals in the last two years once its recent $43 billion buyout of Seagen closes.
Graphic: Pfizer's recent string of deals Pfizer's recent string of deals - https://www.reuters.com/graphics/PFIZER-RESULTS/akpeqjaqbpr/chart.png
Pfizer said it remains on track to achieve its goal of 7% to 9% non-COVID revenue growth this year, driven by newer drugs.
"Given that a large number of launches are expected to occur in the third- and fourth-quarters of 2023, we anticipate that our non-COVID revenues will grow more quickly in the back half of the year," Chief Financial Officer David Denton said on a call with analysts.
Citi analyst Andrew Baum said Pfizer's non-COVID revenue missed expectations for the quarter.
The company is preparing to launch an RSV vaccine, an ulcerative colitis treatment and a hair loss drug by the end of this year, pending U.S. approval.
COVID-19 vaccine sales plunged 77% to $3.06 billion in the quarter, but topped diminished estimates of $2.37 billion, according to Refinitiv data.
Sales of antiviral Paxlovid nearly tripled to $4.07 billion, bolstered by demand in China. Analysts' had estimated $3.13 billion for the quarter.
Pfizer expects a 2023 profit of $3.25 to $3.45 per share and COVID products sales of about $21.5 billion.
Overall revenue for the first quarter fell 29% to $18.3 billion, but topped estimates of $16.59 billion.
Excluding items, the U.S. drugmaker's profit of $1.23 per share topped Wall Street estimates by 25 cents.
Pfizer shares were down 0.9% - less than the broader market - at $38.84.