By Josh Nathan-Kazis and Mackenzie Tatananni

The clearing of the way for Robert F. Kennedy Jr.'s confirmation as health secretary Tuesday put pressure on Pfizer shares, despite a positive earnings report form the company early in the morning.

Pfizer CEO Albert Bourla, however, was unbothered when he spoke to Barron's at midday.

"My stance is that you need to engage with him," Bourla said of Kennedy, who has been the country's most prominent and persistent critic of vaccine safety. Some of Pfizer's top-selling products are vaccines, including the Covid-19 vaccine Comirnaty and the pneumococcal vaccines sold under the Prevnar brand.

Bourla said that he had met with Kennedy, and they talked about cancer and chronic cardiovascular diseases. "I told him many times that there are a lot of things that we can do together," said Bourla, who has mantained a notably optimistic outlook about the Trump administration in recent public statements.

"The Trump administraiton, they have a boldness," Bourla said. "When they go for something, they really go. And they are very much into, let's try to cure cancer."

Bourla said Tuesday that the proposed Trump tariffs on China, Mexico, and Canada -- most of which were postponed on Monday -- would have no major impact on Pfizer.

"They have a very strong belief, from the president to his chief of staff, to his cabinet to his White House people, that strong business, strong private sector, strong entrepreneurship means strong America," Bourla said. "It was the case of few people in [the Biden administration] -- and unfortunately, those few people, they were not the ones that they had the ideological dominance."

Investors did not appear to share Bourla's optimism on Tuesday. Pfizer shares dropped after Kennedy cleared a Senate committee just after 10 a.m., and were down 1.7% in afternoon trading.

Things had looked better before the market opened on Tuesday, when the company reported fourth-quarter earnings and revenue that came in ahead of Wall Street expectations, and maintained guidance for 2025 it had laid out in December.

The earnings report brought no major surprises. Fourth-quarter earnings were 63 cents a share, beating calls for 47 cents. Revenue of $17.8 billion surpassed the FactSet consensus estimate of $17.4 billion and marked 21% operational growth from the previous year.

The company didn't provide an update on its closely watched obesity pill danuglipron, though promised data by the end of the first quarter.

Pfizer shares fell nearly 50% from the start of 2023 through the end of 2024, while the S&P 500 climbed just more than 50%. A Pfizer shareholder has halved her money over that period, while missing out on a shot at historic gains.

Most of Pfizer's losses came in 2023, but the stock failed to recover in 2024. "What differentiates the winners from the losers is not that the winners never fail," Bourla told Barron's. "It's that the winners always rise. So we had a bad year. We made a plan. And executed."

He said that 2024 was focused on revamping its marketing operations while cutting costs, and that the focus in 2025 will be on the pipeline. "We are going to put all the focus now of the senior management time on that, and I'm very optimistic that we will achieve very good results."

The company said it was "on track to deliver" overall net cost savings of $4.5 billion by the end of this year.

One issue dogging the stock in recent years has been the variability in sales of Pfizer's Covid-19 products, the vaccine Comirnaty, and the antiviral Paxlovid. The company's major errors in projecting sales of the Covid products in 2023 was a significant contributor to the stock slide that year. Pfizer now expects sales of the Covid-19 products to stabilize, Bourla said in comments prepared for a Tuesday investor call.

In December, the company rolled out initial guidance for 2025 that investors took as bullish, sending shares up slightly. The company expects revenue of between $61 billion and $64 billion, and adjusted per-share earnings of between $2.80 and $3. Pfizer stood by that guidance on Tuesday.

Sales of Pfizer's respiratory syncytial virus vaccine Abrysvo were $198 million in the fourth quarter, down from $515 million last year, and well below the $482.8 million consensus estimate. After a strong launch in 2023, the RSV market struggled in 2024. Bourla, however, said in comments prepared for the investor call that Pfizer had a "market leadership position for the season in shipped doses," even as U.S. vaccinations dropped.

Products with fourth-quarter sales that beat expectations included the blood-thinner Eliquis, the migraine drug Nurtec, and the cancer treatment Ibrance.

Bourla seems to have brushed off what had seemed a formidable challenge from Starboard Value, which reportedly built a $1 billion stake in Pfizer last year. The activist investor slammed the company's performance in a much-discussed presentation that asserted that Pfizer "management has failed" to deliver on important commitments.

Bloomberg reported last week, however, that Starboard hadn't nominated any new board members ahead of an April annual meeting, and that the deadline for nominations had passed on Jan. 25.

Bourla told Barron's Tuesday he had met a second time with Starboard. "We had a very productive meeting," he said. "It's my first and only experience with an activist, but it's nothing like what I've read. I don't know, maybe it's my charm."

Bourla said that he had taken some of Starboard's suggestions, and had used the activists "as a sounding board."

Pfizer is facing a major string of patent expirations beginning in 2026 that will scrape between $17 billion and $18 billion off the company's revenue by the end of the decade. The company hopes to close that gap with sales of products it has acquired in a recent spending spree.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 04, 2025 14:10 ET (19:10 GMT)

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