You might think that Pfizer (PFE -0.19%) would be a hot stock right now. After all, the market is still booming. Pfizer stands as a clear leader in the coronavirus vaccine race. Instead, the drugmaker's shares are down year to date.

Pfizer had an opportunity for a positive catalyst when it announced third-quarter results before the market opened on Tuesday. However, the company didn't capitalize on that opportunity. Here are the highlights from Pfizer's Q3 update.

Male scientist in lab holding a vial with solution in it.

Image source: Getty Images.

By the numbers

Pfizer reported Q3 revenue of $12.13 billion, down 4% year over year. This result also fell short of the average analysts' estimate of $12.33 billion.

The company announced Q3 net income of $2.2 billion, or $0.39 per share, based on generally accepted accounting principles (GAAP). This represented a significant decrease from GAAP earnings of $7.7 billion, or $1.36 per share, recorded in the same quarter of 2019. 

On a non-GAAP adjusted basis, Pfizer's net income in the third quarter totaled $4.1 billion, or $0.72 per share, compared to adjusted earnings of $4.2 billion, or $0.75 per share, in the prior-year period. This adjusted earnings figure narrowly beat the consensus Wall Street estimate of $0.71 per share.

Behind the numbers

As expected, the COVID-19 pandemic weighed on Pfizer's performance in the third quarter. The big drugmaker reported that the impact of the pandemic totaled around $500 million, or 4%.

However, the third quarter was essentially a tale of two Pfizers. Revenue for Upjohn, Pfizer's business that focuses on older, established drugs, fell 18% year over year on an operational basis to $1.9 billion. On the other hand, the company's biopharma revenue increased 4% operationally to $10.2 billion.

Upjohn continued to be hit hard by plunging U.S. sales for Lyrica as it faces generic competition. Sales in China were also significantly lower for Lipitor and Norvasc because of the country's volume-based procurement program. In addition, Upjohn's sales for Celebrex in Japan were lower due to the launch of generic rivals in June 2020.

While Pfizer's biopharma unit faced some headwinds related to COVID-19, there were still several bright spots. Sales for rare-disease drug Vyndaqel/Vyndamax soared 125% operationally to $351 million. Biosimilars revenue jumped 80% operationally, thanks mainly to new product launches. Eliquis, Ibrance, and Xeljanz also delivered solid year-over-year sales growth.

Looking ahead

Pfizer narrowed its full-year 2020 revenue guidance to a range of $48.8 billion to $49.5 billion from its previous outlook of revenue between $48.6 billion and $50.6 billion. The company also tightened its adjusted earnings guidance to a range of $2.88 to $2.93 per share from previous guidance of $2.85 to $2.95.

Although Pfizer's Q3 update didn't provide the catalyst for the pharma stock that investors wanted, there are other critical milestones on the way. Pfizer expects to announce efficacy results for coronavirus vaccine candidate BNT162b2 next week (a little later than initially projected). The company also still anticipates filing for emergency use authorization in the U.S. in the third week of November pending positive safety results from its late-stage study of the experimental vaccine.

In addition, Pfizer expects to close on the merger of Upjohn with Mylan in the fourth quarter of 2020, creating a new entity named Viatris. This transaction will pave the way for Pfizer to grow at a faster rate.