Pfizer Earnings Report: Investors are only concerned about "oral weight loss medication"

Global pharmaceutical giant Pfizer reported a less-than-ideal earnings report on Tuesday. The company's third-quarter revenue declined by 41% YoY to $13.2 billion, falling short of market expectations. It incurred a loss of $2.382 billion, a rare occurrence compared to the $8.6 billion net profit in the same period last year.

Behind this massive loss is the weakness in Pfizer's COVID-19 drugs. In the third quarter, sales of the Comirnaty COVID-19 vaccine dropped by 70% YoY to $1.31 billion, while revenue from the oral COVID-19 drug Paxlovid was only $202 million, a staggering 97% decline YoY.

However, during the subsequent earnings conference call, investors seemed unconcerned about the situation with Pfizer's COVID-19 drugs and were instead focused on oral weight-loss drugs.

As the COVID-19 pandemic gradually recedes, the era of "painless" weight loss has begun. Since the beginning of this year, Eli Lilly and Novo Nordisk, both holding the "miracle weight-loss drug" GLP-1, have seen their stock prices rise by over 40%. Meanwhile, Pfizer, once hailed as the king of COVID-19 drugs, has plummeted by 40%. Pfizer's situation can only be described as awkward.

Investors believe that Pfizer must now move away from its previous focus on COVID-19 drugs and find new areas of growth. They hope that Pfizer can make a comeback by capitalizing on the popularity of GLP-1 in the global market and rejoin the ranks of winners.

However, when Pfizer announced its earnings report on Tuesday, it remained tight-lipped about its experimental oral weight-loss drug, Danuglipron, causing concern on Wall Street.

Why is Pfizer remaining silent about a weight-loss drug that is highly valued?

Will Sevush, a healthcare strategist at Jefferies, pointed out:

Pfizer did not mention Danuglipron in its prepared remarks.

Prior to the release of the earnings report, Leerink Partners analyst David Risinger even wrote that Pfizer might announce mid-stage trial data and earnings results as early as Tuesday.

During the conference call, analysts repeatedly pressed CEO Albert Bourla about the drug, but Bourla urged them to be patient and stated that they had not yet seen the trial data, which is expected to be released by the end of the year.

I know there is a lot of interest right now, but I want to be very cautious and not make any comments without data.

TD Cowen analyst Steva Scala noted that he did not hear any "confidence-building statements" from the management.

Investor interest in oral weight-loss drugs is understandable. Currently, GLP-1 weight-loss drugs such as Ozempic, Wegovy, and Mounjaro are administered through injections. Oral medication is more convenient for doctors to prescribe and easier for patients to take. Bourla's tight-lipped approach is worth noting. It should be noted that at the J.P. Morgan Healthcare Conference held in January of this year, he spoke extensively about weight loss drugs and was not stingy with his words.

At the time, he stated that the overall market for GLP-1 drugs would grow to $90 billion, with Pfizer potentially capturing a $10 billion market share.

"We believe there will be few players in the GLP-1 oral drug race. Clearly, we will be one of them."

There is no denying that if the Danuglipron trial produces positive results, its potential could be enormous.

Pfizer's mid-term study is currently evaluating whether Danuglipron can significantly reduce patients' weight. The results announced in May showed that patients lost an average of 9.19 pounds after 16 weeks of treatment, but there were also serious gastrointestinal side effects, leading many patients to drop out of the trial due to side effects.

However, at the same time, Pfizer's oral drug is facing fierce competition from its peers.

Eli Lilly is developing a non-peptide GLP-1 pill called Orforglipron, which is taken once daily. A 36-week trial showed that it helped volunteers lose up to 14.7% of their weight. In addition, Novo Nordisk's oral drug helped achieve an average weight loss of 15.1%.

It is also worth mentioning that Pfizer is not the only pharmaceutical company trying to enter the weight loss drug market. Amgen is trying to break the current duopoly in the weight loss drug market and will announce the results of two weight loss drug studies next year. Amgen's stock price has also been boosted by optimistic expectations.

Pfizer's progress in weight loss drugs has not been smooth, as it terminated the development of the oral GLP-1 candidate Lotiglipon (taken once daily) in June of this year.

During the mid-term clinical trial stage, patients experienced elevated liver enzymes, which usually indicates damage to liver cells and liver function.