Pfizer's Irish staff worry about more job losses as drugmaker announces another €1.5bn in cuts
Pfizer
said it will cut another $1.7 billion (€1.5 billion) in costs by the end of 2027. This is the third round of cuts announced by the US pharma group in the last three years and brings to $7.7 billion the amount it hopes to save in annual costs.
The company said it expected to make additional savings of $1.2 billion by increased use of automation, artificial intelligence and other digital tools. A further $500 million in savings will come from its research and development budget.
The new cuts come as the drugmaker struggles to find sources of growth amid declining demand for its vaccine and treatment for Covid-19. Pfizer is expected to lose more than $15 billion in revenue by the end of the decade as top products lose patent protection.
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A series of multibillion-dollar acquisitions has yet to yield new blockbusters and Pfizer's stable of drugs in development has failed to convince Wall Street, with the company most recently pulling the plug on an experimental pill for obesity.
'Investors are just not excited about the current Pfizer business or the pipeline,' said Mizuho analyst Jared Holz. 'You could argue that nothing that they've done over the past few years has really worked, and to just watch your stock make new multiyear lows, that can't be the endgame here.'
The company, which employs some 5,000 people in Ireland, announced last October that it was cutting about 5 per cent of its Irish workforce, with about 210 jobs going across three sites: Grange Castle, West Dublin; Newbridge, Co Kildare; and Ringaskiddy, Co Cork.
It also shed 100 staff from its Newbridge site in late 2023 in response to a global collapse in sales of its Paxlovid Covid antiviral medicine.
It is unclear whether the latest cost savings plan with its emphasis on automation will mean further job losses in Ireland.
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The announcement came alongside publication of the drugmaker's first quarter results, with revenue of $13.7 billion falling short of analysts' $14 billion average estimate. Adjusted earnings were 92 US cents per share.
Pfizer is maintaining its 2025 outlook of between $61 billion and $64 billion and adjusted per-share earnings of $2.80 a share to $3 a share. Chief financial officer David Denton said the company is 'trending towards the upper end' of the per-share earnings guidance range.
That wasn't enough to encourage investors initially with Pfizer's shares slipping as much as 2.6 per cent after the markets opened in New York. But sentiment improved as the results were digested with the shares trading up 3.4 per cent in early afternoon trade.
Mr Denton told analysts on Tuesday that the company is forecasting $150 million in costs this year from the tariffs implemented to date. He said the sum was factored into the company's sales and earnings outlook for the year.
Pfizer, which relies on a global network of manufacturing sites to supply drugs to the US, could be significantly affected by Trump's promised tariffs on pharmaceuticals. Chief executive Albert Bourla has said the company could mitigate part of the impact by moving some overseas production into the US.
He said the industry is hoping the Trump administration will focus more on generic medicines like those the World Health Organisation has designated as essential, which tend to be produced mostly in China and India.
'I think that's where the problem is. It's not if an obesity drug is made in Ireland,' he said.
Speaking on a conference call with investors, he said the drugmaker's story over the next three years would not be one of strong revenue growth, given looming patent expirations on top products, but rather one of earnings growth.
The company's Covid business, which once drove annual revenue to $100 billion, has dramatically faded since the heights of the pandemic.
In the first quarter, Covid sales overall dragged on sales. Pfizer's Covid vaccine revenue was $565 million, beating estimates of $325 million. But Paxlovid, the company's pill for Covid, brought in $491 million, far below Wall Street's $902 million forecast.
As for other drugs, sales of Eliquis, the company's decade-old blood thinner and one of its top drugs, were $1.92 billion, roughly in line with estimates. The pneumonia vaccine Prevnar added $1.66 billion, meeting analysts' average view.
Sales of the heart drug Vyndaqel were $1.49 billion on the quarter, beating estimates of $1.38 billion despite mounting competition from BridgeBio Pharma and Alnylam Pharmaceuticals. – Additional reporting: Bloomberg
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