Exterior view of Pfizer's headquarters on January 29, 2023 in New York City.
Kena Betancur | Corbis news | Getty Images
Pfizer said Wednesday it has launched a new one multi-year program to cut costs as it works to recover from the rapid decline in its Covid business.
The announcement comes on top of another $4 billion in cost cuts Pfizer announced last year as demand for its Covid vaccine and oral drug Paxlovid collapsed.
In a securities depositThe pharmaceutical giant said the first phase of its new program focuses on operational efficiency and is expected to save the company about $1.5 billion by the end of 2027.
One-time costs associated with the first phase of the cuts are expected to be approximately $1.7 billion, including severance payments for an unspecified number of furloughed employees. The company expects to record the majority of these costs this year.
Pfizer also expects the program to bring “changes in the network structure.” and “product portfolio improvements.”
“Given the complexity of manufacturing and the longer lead times required to implement changes, this program will be a multi-phase effort,” Pfizer said in the filing.
Pfizer is trying to boost investor sentiment after its shares fell nearly 50% in 2023, making it the worst-performing pharmaceutical stock last year. That share price drop has wiped out more than $100 billion in Pfizer's market value.
As demand for Covid products plummeted last year, Pfizer also disappointed Wall Street with the disappointing launch of a new RSV shot, a twice-daily weight-loss pill that failed in clinical trials and an initial 2024 forecast that exceeded expectations.
But Pfizer subsequently satisfied investors earlier this month reported Revenue and adjusted earnings exceeded expectations in the first quarter and raised full-year earnings guidance. The pharmaceutical giant said the new profit guidance explains “confidence” in its business and its ability to reduce costs.
“We are cautiously optimistic about the year,” Pfizer CEO Albert Bourla said during a May 1 earnings call.
This story is developing. Check back later for updates.
