Pfizer (PFE +1.24%) has reached a major transition point. The big pharma company took center stage earlier in the COVID-19 pandemic when it became the first to launch a coronavirus vaccine. That product, Comirnaty, and the treatment Paxlovid, released later, helped Pfizer's revenue reach a record level of $100 billion in 2022; the two products made up more than half of that.
Now, though, with coronavirus product demand falling and losses of exclusivity ahead for some of Pfizer's other drugs, the company's revenue is on the decline. And Pfizer's shares, after climbing to a peak back in 2021, have now dropped nearly 50% from that level.
But this pharmaceutical giant hasn't turned the final page in its growth story; instead, it's taken steps to renew its portfolio of products and boost revenue. Where will Pfizer be in 10 years? Let's find out.
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Coronavirus product peak sales of $55 billion
First, a summary of Pfizer's recent past: The company's coronavirus products brought in $55 billion in revenue in 2022. That's an enormous level -- but also a peak that isn't likely to be repeated. As we head toward a post-pandemic world, need for the products has declined, and so have revenue estimates. For example, Pfizer forecasts a total of $8 billion in coronavirus product sales this year.
Other key products outside of the coronavirus portfolio are heading for revenue declines too, due to patent expirations. Cancer drug Ibrance and blood thinner Eliquis -- both set to lose exclusivity later this decade -- delivered more than $5 billion and $6 billion in revenue, respectively, in 2022.
Pfizer estimates that all of its losses of exclusivity will shave $17 billion from revenue in the period of 2025 to 2030.
But before we start worrying too much about Pfizer's future, let's consider what the company is doing now to reignite growth down the road. And it all starts with products. The company has been preparing for this moment of patent expirations by readying new candidates to ensure future growth.
In fact, right now it's amid its biggest string of product launches ever -- 19 new products or indications released over a period of 18 months. Pfizer expects these products to generate $20 billion in revenue in 2030.
NYSE: PFE
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Business deals to deliver growth
The pharmaceutical company is also depending on a series of recent acquisitions to deliver revenue, from its purchase of Arena Pharmaceuticals to boost Pfizer's immunology portfolio to the purchase of oncology company Seagen. Some of these deals -- such as Arena -- offer Pfizer pipeline candidates, representing future potential launches. Others, like Seagen, offer immediate revenue through already approved products, as well as growth potential down the road. Pfizer forecasts more than $3 billion in Seagen revenue this year, and as much as $10 billion in 2030.
In total, Pfizer predicts that its business deals may add $25 billion to revenue in 2030. And thanks to Pfizer's own products and its series of acquisitions, the company sees potential for 2030 non-COVID revenue of as much as $84 billion, for a 10% compound annual growth rate from 2025 through 2030.
Now, let's get back to our question about where Pfizer will be 10 years from now. Pfizer is executing its 19 launches over a pretty short period of time; if those products perform as expected, they could meet the company's revenue goal and continue to drive growth in the next decade.
The acquisitions of clinical-stage companies also could offer growth -- if acquired pipeline candidates reach the finish line.
Long-term coronavirus product potential
It's also important to consider the long-term potential of Pfizer's coronavirus portfolio. No, demand isn't likely to return to pandemic highs. But Pfizer aims to launch a combined coronavirus/influenza vaccine later this decade, and that product could interest people who generally go for an annual flu shot -- that's nearly half of the U.S. population. Even if Pfizer faces competition from Moderna and Novavax, it still could bring in significant recurrent revenue from an eventual combined vaccine.
Since a pandemic is an uncommon situation, we shouldn't use Pfizer's revenue levels during peak pandemic times as a comparison point. Instead, using 2019 revenue of $51 billion offers a more accurate comparison. And from there, we can see potential for significant progress by 2030, with possible revenue growth of about 65%. I would expect momentum to continue through the early 2030s as pipeline programs reach the finish line, adding to revenue.
All of this means that Pfizer should be in the middle of a new era of growth 10 years from now. So, today, when the shares are down, is the perfect time to get in on this promising long-term story.
