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Pictured: Pfizer's signage outside its office in Canada/iStock, JHVEPhoto Pfizer in an SEC filing on Wednesday revealed its plans to implement a fresh round of cost cuts to generate savings of around $1.5 billion by the end of 2027. According to the SEC document, the $1.5-billion savings scheme is just the “first phase” of a multi-year program designed to “reduce our cost of goods sold.” The program will include structural changes to its network, operational adjustments to boost efficiency and improvements to its product portfolio. Pfizer expects to incur around $1.7 billion in one-time costs—primarily due to severance pay and implementation fees—as part of the first phase. The pharma will reflect these costs in 2024, while savings from the first phase will start being realized in 2025. Wednesday’s announcement adds to Pfizer’s ongoing $3.5 billion cost-cutting initiative unveiled in October 2023 and another $500 million in targeted savings announced in December 2023. The “multi-year, enterprise-wide cost realignment program” is designed to help the pharma weather the sharp drop in COVID-19 demand, which bottomed out its revenues in recent quarters, according to the company. In the third quarter of 2023, Pfizer reported its first quarterly decline since 2019. At the time, the pharma suffered a 42% year-over-year drop to bring in $13.2 billion in revenue. Sales of Paxlovid, its antiviral treatment for, cratered 97%, while its COVID-19 vaccine Comirnaty slipped 70%. Pfizer reported a 42% hit in full-year revenues last year, driven by a 92% and 72% drop in Paxlovid and Comirnaty sales, respectively. Excluding Paxlovid and Comirnaty, Pfizer’s revenue grew 7% operationally last year. The cost-cutting program will also involve layoffs, though the pharma has yet to specify how many employees will be affected. Pfizer expects to absorb a one-time upfront cost of $3 billion, primarily associated with severance and implementation fees. Pfizer also announced in its first-quarter 2024 earnings report that it culled four programs from its pipeline. The pharma will no longer be working on VTX-801, a recombinant gene therapy for Wilson disease. Zavzpret (zavegepant), its migraine nasal spray, will also no longer be developed as an oral preventive therapy. In Wednesday’s SEC filing, Pfizer cautioned that the savings from the first phase of its program are estimates and are “subject to a number of assumptions.” The pharma said its actual results may differ. Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

The sales for Pfizer’s Covid products, Comirnaty and Paxlovid, decreased by 88% and 50% respectively in Q1 this year, compared to Q1 2022, as per the company’s financials. Image Credit: Andrii Yalanskyi / Shutterstock. Pfizer has unveiled another cost reduction programme, which is expected to run over multiple years and will result in savings of approximately $1.5bn by 2027. The move will include one-time expenditures, such as severance and implementation costs, of approximately $1.7bn. The company expects most of this to be recorded in its 2024 balance sheet but did caution investors to expect cash outlays up to 2026. Pfizer was sparse on details on the cost-cutting initiative, which will include “operational efficiencies, network structure changes, and product portfolio enhancements”. Following the announcement of the cost-saving initiative on 22 May, Pfizer’s share was up by 3.9% by the time the market closed later that day. The company’s market cap stands at $167.7bn. The demand for Covid-19 products has seen a significant decline over the past year. This has hit Pfizer hard, with the company’s revenue declining by 42% in 2023 , compared to the previous year. In October 2023, Pfizer started cost-saving measures , to save $1bn by the end of last year and an additional $2.5bn in 2024. In December, Pfizer added a $500m expense reduction plan to its cost reduction programme, aiming for $4bn in savings by this year. See Also: Otsuka cuts development for AVP-786 following Phase III flop AstraZeneca to establish $1.5bn ADC production site in Singapore Pfizer has two Covid-19 products in its catalogue – an antiviral pill Paxlovid (nirmatrelvir/ritonavir); and the Covid-19 vaccine Comirnaty, developed in partnership with BioNTech. The sales for both continue to decline – Comirnaty and Paxlovid sales decreased by 88% and 50% respectively in Q1 this year, compared to Q1 2023. To offset the profit decline from Covid-19 products, Pfizer has invested in expanding its pipeline. It doubled the size of its oncology pipeline with a $43bn acquisition of the antibody-drug conjugate specialist Seagen last year. Pfizer expects to develop eight or more “potential blockbusters” by 2030, as per a 29 February press release. The company also expects biologics to make a dent in revenues, increasing total oncology revenue from 6% in 2023 to 65% in 2030. Pfizer is also investigating therapies for weight loss, a high revenue-generating sector . While it had to discontinue the development of one of its glucagon-like peptide-1 receptor agonist (GLP-1-RA) candidates, lotiglipron, due to liver dysfunction, a Phase II trial (NCT04707313) with the second GLP-1-RA candidate, danuglipron, met the primary endpoint . The therapy induced weight reductions of between 8% and 13% after 32 weeks, and 5% and 9% after 26 weeks, compared to baseline.