Pfizer, the global biopharmaceutical giant, reported a 2% decline in revenue for the fiscal year 2025, while adjusted earnings per share (EPS) increased by 4%. Despite the revenue dip, management reaffirmed its guidance for 2026, projecting revenues between $59.5 billion and $62.5 billion, which indicates a range of flat growth to a 5% decline. Following the announcement on February 3, 2025, Pfizer’s shares experienced a 3% drop intraday.
The company’s ability to manage costs has helped mitigate some revenue challenges, resulting in a bottom-line gain for 2025. However, analysts express concerns that this cost-cutting leverage is diminishing and that future growth appears increasingly dependent on a narrow selection of products. Notably, Padcev is emerging as a significant growth driver as its use expands in earlier stages of bladder cancer in combination with Merck’s Keytruda.
Other key products, however, are under pressure from stronger competitors. The oncology drug Ibrance, the vaccine Prevnar, and the cardiovascular medication Vyndaqel are all facing challenges that could impact revenue further.
Concerns Over Pipeline and Impairments
The outlook for Pfizer’s revenue growth heavily relies on its pipeline, especially in light of a substantial $4.4 billion impairment recorded in the fourth quarter, which is partially attributed to programs associated with Seagen. The company’s mixed results from the obesity program MET-097i (PF’3944) have also raised eyebrows among investors.
Data from the phase 2b trial, known as Vesper-3, reveals that approximately 9% of participants discontinued treatment due to adverse events. This level of discontinuation may further complicate efforts to enhance efficacy beyond existing market options, potentially exacerbating concerns regarding tolerability.
Market Sentiment and Valuation Adjustments
In light of these developments, analysts have adjusted their fair value estimate for Pfizer, lowering it from $34 to $32 per share. This revision reflects a decrease in long-term growth expectations and margin outlooks, particularly concerning the Metsera pipeline. Despite this negative sentiment, some market observers suggest that Pfizer’s shares may currently be undervalued, given the overall weak market response.
The intricate interplay between Pfizer’s revenue challenges and its product pipeline will be critical in shaping the company’s trajectory in the coming year. As it navigates these hurdles, stakeholders will be closely monitoring the performance of its existing products and the potential of its pipeline to drive future growth.
