By Bhanvi Satija and Michael Erman
(Reuters) -Pfizer said its full-year profit should benefit from cost cuts across its research and manufacturing operations after posting higher-than-expected second-quarter earnings on Tuesday.
CEO Albert Bourla also said the company has been in active discussions with members of the U.S. government, including President Donald Trump, over demands drugmakers lower prices for Americans.
The New York-based drugmaker’s shares were up 3.7% at $24.37 midday after it raised its full-year profit forecast.
Pfizer shares have lost more than half their value from their pandemic-era highs as it deals with waning revenue from COVID products and looming patent expirations for key drugs. In response, the company launched a major cost-cutting program.
Pfizer said it was on track to deliver $7.2 billion in net savings by the end of 2027, about $4.5 billion coming by the end of 2025.
The pharmaceutical industry is facing intense pressure from Trump to lower prices that Americans pay for prescription medicines, while preparing for 15% tariffs on imports from the European Union.
“We are trying collectively to find solutions that, from one hand would make medicines affordable in the U.S., (and) on the other hand will make our industry even more competitive compared to China,” Bourla said.
Drugmakers want to reach a resolution soon because the president is impatient and wants results quickly, the CEO said.
Beyond Trump’s calls for most favored nation pricing and threatened tariffs, Bourla said drugmakers have discussed policies including reducing the influence of middlemen in the healthcare system and the drug price negotiations occurring under the Inflation Reduction Act.
The company now expects adjusted earnings of $2.90 to $3.10 per share, up from its prior view of $2.80 to $3.00. The forecast includes a one-time charge of 20 cents per share related to its licensing deal with China’s 3SBio for an experimental cancer treatment.
“Pfizer continues to lean on cost management as the main lever to drive performance going forward,” said Daniel Barasa, portfolio manager at Gabelli Funds, which owns Pfizer’s shares.
Pfizer shares had fallen over 11% this year, compared to a 1.7% decline for the broader NYSE Arca Pharmaceutical Index.
The company said its forecast also absorbs the impact of currently imposed tariffs on goods imported from China, Canada and Mexico, as well as potential price changes this year based on the letter it received from Trump on July 31.
Pfizer has said it has enough manufacturing capacity across its 10 U.S. sites to mitigate any tariff impact and is open to shifting some production to those facilities.
finance.yahoo.com
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