Pfizer Reports 8% Revenue Decline to $13.7 Billion in Q1 2025

Pfizer Inc. reported a decline in financial performance for the first quarter of 2025, with total revenues decreasing by 8% to $13.7 billion, down from $14.9 billion in the same period last year. This decline was attributed to a $1.2 billion drop in product revenues, primarily driven by a significant decrease in sales of Paxlovid, which fell by 81% year-over-year. The company also experienced a decrease in alliance revenues, which totaled $2.1 billion, compared to $2.2 billion in the previous year. Net income attributable to Pfizer's common shareholders was $2.97 billion, or $0.52 per share, down from $3.12 billion, or $0.55 per share, in the first quarter of 2024.

In terms of operational changes, Pfizer has initiated a multi-year cost realignment program aimed at aligning costs with long-term revenue expectations. The company expects to incur approximately $5.3 billion in costs associated with this program, with $3.7 billion allocated to its Biopharma segment. Additionally, Pfizer has launched a Manufacturing Optimization Program to enhance operational efficiencies and reduce costs of goods sold, with expected savings of around $1.6 billion by the end of 2027. The company also reported a decrease in selling, informational, and administrative expenses by 13%, reflecting ongoing productivity improvements.

Pfizer's operational metrics showed a mixed performance across its product portfolio. While revenues from the Vyndaqel family and Comirnaty increased, the overall decline in product revenues was significant, particularly for Paxlovid and other key products like Eliquis and Xeljanz. The company reported a favorable revision in accrued royalties, contributing to a decrease in cost of sales by 16%. The total cash provided by operating activities was $2.34 billion, a substantial increase from $1.09 billion in the prior year, driven by improved cash flow management.

Looking ahead, Pfizer anticipates continued challenges due to pricing pressures and regulatory changes, particularly from the Inflation Reduction Act's Medicare Part D redesign, which is expected to negatively impact revenues by approximately $1 billion in 2025. The company is also focused on enhancing its research and development productivity and optimizing capital allocation to support its strategic priorities. Pfizer's management remains committed to navigating the evolving healthcare landscape while maintaining operational efficiency and delivering shareholder value.