Shares of Pfizer Inc. (NYSE: PFE) and German partner BioNTech (NASDAQ: BNTX) fell in pre-market trading after the leading U.S. drugmaker lowered its sales forecast for its COVID vaccine and therapy on Friday, which some analysts found to be bigger than anticipated.
Pfizer faced a sharp decline in the demand for pandemic-related products, prompting the company to revise its full-year sales forecast. Sales of its antiviral COVID treatment, Paxlovid, are expected to see a reduction of approximately $7 billion, with their vaccine, developed in collaboration with BioNTech, set to decrease by about $2 billion.
The repercussions of this forecast cut are substantial, as Pfizer (NYSE: PFE) disclosed it will incur a non-cash charge of $5.5 billion in the third quarter. This includes $4.6 billion in inventory write-offs for Paxlovid and $900 million for the vaccine. Meanwhile, BioNTech (NASDAQ: BNTX) disclosed potential write-downs of up to 900 million euros ($947 million).
Wells Fargo analyst Mohit Bansal has noted that the reduction in the COVID sales forecast surpasses expectations and may lead to downward revisions in Wall Street’s COVID sales estimates for the coming years.
The news has had a profound impact, causing BioNTech’s shares to plummet by 6.7% in Frankfurt, hitting a two-month low. Its U.S.-listed shares fell by 4.65% in pre-market trading, while Pfizer’s shares also experienced a 2% decline. Even rival COVID vaccine maker Moderna, Inc. (NASDAQ: MRNA) saw a 4.19% drop in its share value due to this development.
BioNTech, which relies on revenue sharing from Pfizer related to vaccines, mentioned that the write-offs would also impact its 2023 revenue. The company clarified that Pfizer had informed them that a significant portion of the write-offs relate to raw materials and inventories of vaccine versions that are outdated or differ from the current upgraded version.
Pfizer’s shares have been on a rollercoaster this year, dropping by about 37%, and are trading at 9.8 times their 12-month forward earnings estimate, while BioNTech is trading at 26.7, as per LSEG data.