This Week’s Q3 Earnings: Pfizer and Moderna

Firms in the biotech industry have been among the most talked-about since the beginning of the COVID-19 pandemic over three years ago, and the third-quarter earnings reports of two of the biggest names in this sector may be set to capture investors’ attention in the coming days. Let’s take a closer look at what might be expected from Moderna and Pfizer this week:

Moderna Earnings to Catch a Cold?

Moderna (MRNA) is set to release its Q3 quarterly earnings report on Thursday, November 2, 2023 before market open. While predictions are hard to make, in the case of Moderna, the general outlook among some market watchers seems to be less than rosy. Analysts are anticipating a significant year-over-year decline in earnings, with an expected loss of $1.80 per share, marking a decrease of 171.2%. Revenues are also projected to decrease by 59.5% to $1.36 billion for the quarter.

The recent trend in estimate revisions is noteworthy. The consensus EPS estimate has been revised upwards by 116.84% over the last 30 days, indicating that analysts have adjusted their initial estimates. However, it's important to remember that the direction of estimate revisions by individual analysts may not always align with the overall change.

Furthermore, examining the company's earnings surprise history can provide additional insight. In the previous quarter, Moderna was expected to report a loss of $3.84 per share but achieved a loss of $3.62, resulting in a positive surprise of +5.73%. Over the past four quarters, the company beat consensus EPS estimates twice.

In summary, Moderna's upcoming earnings report is highly anticipated, with analysts projecting a significant year-over-year earnings decline and lower revenues. Moderna’s share value is down by just under 59% so far in 2023, and while recent estimate revisions indicate increased optimism, mixed track record of earnings surprises make it challenging to predict whether the company will exceed consensus expectations. The actual results and management's discussion during the earnings call will play a crucial role in determining the impact on the company's stock price and future earnings outlook.

Pfizer Moves to Diversify

Biomedical giant Pfizer (PFE) is expected to reveal how it fared over the course of the third quarter of 2023 today, October 31st, before the market opens. The firm faces a challenging situation with its shares down by more than 40% so far this year. While the company has been actively launching new products, such as a vaccine for respiratory syncytial virus, an ulcerative colitis pill, and a meningococcal vaccine, investor attention remains fixated on the sharp drop in COVID-19 revenue.

In mid-October, Pfizer admitted that its initial 2023 COVID-19 sales projections were overly optimistic. The company revised its 2023 sales estimate for the COVID-19 antiviral Paxlovid from $8 billion to $1 billion, following the return of a third of the doses purchased by the U.S. government. Additionally, Pfizer reduced its 2023 sales guidance for the COVID-19 vaccine Comirnaty by $2 billion.

Analysts expect Pfizer to report a loss of 8 cents per share in the quarter from $13.3 billion in sales, compared to a 58-cent profit prior to the update. The company also adjusted its 2023 profit forecast to between $1.45 and $1.65 per share, indicating a loss in the second half, as it had earned $1.90 per share in the first half of the year.

Investors are looking for updates on Pfizer's Phase 2b trial of its oral obesity pill, danuglipron, which could compete with Eli Lilly's (LLY) experimental obesity pill orforglipron. Successful results would allow Pfizer to enter the GLP-1 space, where Lilly and Novo Nordisk have had a strong presence.

Most of the investor questions were addressed during the mid-October announcement. The key challenge for Pfizer now is whether it can divert attention away from its COVID-19 franchise and focus on the new product launches and pipeline products to regain investor confidence.

Looking ahead, Pfizer is hoping for improved non-COVID operational revenue growth in the third and fourth quarters, driven by key products, new launches, and acquisitions like Nurtec and Oxbryta. Several new product approvals/launches, such as Cibinqo for atopic dermatitis, Abrysvo RSV vaccine, Zavzpret nasal spray for migraine, Litfulo (ritlecitinib) for severe alopecia areata, Elrexfio (elranatamab) for relapsed/refractory multiple myeloma, and Ngenla for pediatric growth hormone deficiency, are expected to contribute to revenue. Investors will be eager to see the initial sales figures for these new products in the third quarter and their impact on Pfizer's top line.

It's important to reiterate that Pfizer's stock has seen a sharp decline so far this year, while the industry has seen a 0.5% increase, indicating some challenges and uncertainties in the pharmaceutical market that may impact the company's financial performance. (Source:Barrons)

All in all, Moderna and Pfizer have both faced significant challenges so far in 2023 as key market players may have come to expect growth from non-coronavirus-related pharmaceutical sectors. Whether these big-name biotech firms will be able to deliver the goods this week remains to be seen.