AstraZeneca is making nothing from its Covid jab, but the US firm has banked a fortune.
A Covid-19 vaccine only unveiled to a grateful world in November is poised to account for more than a third of Pfizer (NYSE:PFE) annual sales after the US drugs giant upgraded guidance last night.
Pfizer now anticipates potential revenues of $26 billion (£18.7 billion) this year from the delivery of 1.6 billion doses of the jab it developed with Germany's BioNTech (NASDAQ:BNTX).
But as this increase from $15 billion (£10.8 billion) is based on contracts signed through to mid-April, there's still the potential for significantly higher revenues given the two companies have the capacity to produce up to 2.5 billion shots.
Already the best-selling product in the Pfizer portfolio, the two-shot Covid-19 vaccine is seen by chief executive Albert Bourla as offering “durable” demand similar to the flu vaccine, given the likely need for regular boosters to maintain levels of immunity.
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Pfizer, unlike UK-based rival AstraZeneca (LSE:AZN), will make a profit on its jab and has revealed an adjusted income margin on the vaccination in the high 20s as a percentage of revenues. That puts the potential profit in the region of $6.5 billion (£4.7 billion) or more this year.
AstraZeneca said last week that it had generated $275 million (£198 million) from sales of its not-for-profit vaccine in the first quarter, whereas Pfizer has just reported $3.5 billion (£2.5 billion).
Total revenues across the US group were $14.6 billion (£10.5 billion) in the quarter, with full-year guidance now in the range of $70.5 billion (£50.8 billion) and $72.5 billion (£52.2 billion) as a result of the vaccine, an increase of about 18% on previous forecasts.
Excluding the vaccine boost, Bourla noted that revenues growth of 8% was well above the company's stated target of at least 6% through to 2025. Strong performers included Eliquis, which is used to prevent blood clots and grew first quarter sales by 25%.
Full-year guidance is now for earnings per share in the range of $3.55 and $3.65, compared with $3.10 and $3.20 previously and representing a 59% jump on the result for 2020.
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The company has declared an unchanged dividend of $0.39 a share for the second quarter, which is set to mean a 12th year in a row of increased payments for Pfizer shareholders who also hold shares in its Viatris spin-off.
Viatris was created following November's merger of its Upjohn off-patent business, which included Viagra and cholesterol drug Lipitor, with Mylan. Pfizer now operates as a focused biopharma company.
Its shares spiked at more than $42 in December after the vaccine breakthrough, only to fall back to $34 in late February amid a fresh wave of coronavirus infections. They are now trading at around $40 a share, which compares with the price target of $38 held by analysts at Morgan Stanley.
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