The new crown medicine is completely cold! Pfizer agreed to start global layoffs

Source: Visual China

Guest Author | Li Fang   

Edit | Chen Fuye

Produced | Prism Tencent Xiaoman Studio

Pfizer has been a bit of a broken jar lately. On October 19, Pfizer announced that the anti-coronavirus drug Paxlovid would be converted to a self-funded drug, priced at $1,390 for a five-day course, compared to $529 previously charged to the U.S. government.

Perhaps many people have forgotten about Paxlovid. A year ago, this "anti-new crown miracle drug" was still a strange commodity, and drug dealers fried it to more than 15,000 yuan per box, and in a blink of an eye, not only China, but even the United States almost no one mentioned it again. Pfizer's 2023 half-year report shows that in the second quarter of this year, Paxlovid's global sales were only $143 million.

Due to the dissipation of the epidemic, this medicine has also fallen to the altar.

On October 13, Pfizer's official website disclosed an announcement, which roughly means two points: the US government no longer pays, returned 7.9 million courses of Paxlovid, Pfizer lowered its revenue forecast for this year, and is expected to reduce revenue by $9 billion. According to the plan, Pfizer will carry out a cost-reduction plan in 2023-2024, planning global layoffs, and it is likely to affect China.   

Pfizer originally vowed that there was still a large market for coronavirus drugs and vaccines in 2023, and at least $21.5 billion could be sold this year. But the situation is changing so fast that it exceeds the expectations of the "largest pharmaceutical company in the universe". This is also a wake-up call for all companies developing new drugs.

It was expected that the demand for P drugs this year was greater than last year

I wonder how many people have eaten Paxlovid during last year's pandemic?

At that time, the epidemic prevention and control had just been released, and the whole country fell into a wave of infection. For a while, P drugs, known as "anti-new crown miracle drugs", became a resource for many people to compete for, and Paxlovid that was originally 2,300 yuan per box was fried to 15,000 a box.

Paxlovid is the first oral anti-new crown drug approved by the US FDA, and it is highly recognized worldwide. Pfizer controls the new crown drug with one hand, and has the world's hot-selling new crown mRNA vaccine in the other hand, and it is conceivable that the performance is naturally explosive.

In 2022, Pfizer's total revenue reached $100.3 billion, becoming the first pharmaceutical company in history to exceed $100 billion in annual revenue. Naturally, more than half of this comes from the contribution of new crown vaccines and drugs. Pfizer was originally known as the "number one pharmaceutical company in the universe", but it once left the global "sales champion" throne for many years, and later returned to the first place in the ranking with its excellent performance in the new crown epidemic.

Pfizer CEO Abler, the boss who firmly disagrees with selling Paxlovid at a low price in China, is naturally very satisfied with the company's performance in 2022. However, he said a big thing: "In 2023, we hope to break the record again." Because we have never launched so many new products in such a short period of time. ”    

In Pfizer's guidance for future results at the end of 2022, the company acknowledged that revenue from COVID products in 2023 is unlikely to be the same as before, and expects COVID vaccine revenue to decline by 64% and Paxlovid revenue by 58%. But they also inexplicably believe that after the current vaccination rate is still low and the public's immunity is reduced, there will be a market for new crown drugs.

They expect the proportion of the population taking medication to be around 17%, up from 12% in 2022. The global demand for this product is expected to be 17 million treatment courses in 2023 and 12 million treatment courses in 2022.

Today, the pandemic is no longer a global threat, and Pfizer still maintains high expectations for Paxlovid that the investment community at the time could not understand.

It also proved that Aberle was too optimistic. On August 1 this year, Pfizer released the first half of the performance report, the total revenue in the first half of the year was 31 billion US dollars, down 42% year-on-year, of which Paxlovid sold more than 100 million US dollars in the second quarter, and did not continue its glory.

Even under such circumstances, Pfizer still does not give up on the expectations of the new crown business. In the 2023 interim report, Pfizer adhered to the revenue expectations set at the beginning of the year, especially for the two new crown products.

Like many flu vaccine manufacturers, Pfizer has many expectations for autumn and winter, believing that the global epidemic will still repeat this autumn and winter.

It was not until it was returned by the US government on October 13 that Pfizer had to face the operational problems caused by the sudden decline in demand. On October 13, Pfizer lowered its full-year revenue forecast by $9 billion and planned to implement a "cost adjustment plan" that saved $3.5 billion, mainly to lay off employees, possibly including China.   

According to the plan, Pfizer is expected to "save" $1 billion this year and $2.5 billion next year. As you can imagine, Pfizer employees will not have a good time in the next two months.

Foreign-funded pharmaceutical companies often score high in one move

Looking back, the decision-making adjustment speed of the largest pharmaceutical company in the universe seems to be too slow.

At the time of the new crown product fever, Pfizer has repeatedly expanded production capacity. In 2021, Pfizer proposed the "Lightspeed Project" to expand the production scale and production efficiency of the new crown vaccine; At the beginning of 2022, Pfizer said that it would invest 520 million euros in the next five years to increase the production capacity of Paxlovid in France; by the end of 2022, Pfizer also added a budget for 2023: operating expenses such as the release and acquisition of new crown-related drugs.

There are also many companies in China that rushed to develop new crown vaccines and drugs during the epidemic, but many companies have stopped their losses in time. For example, CanSino, which was the first to participate in the development of the new crown vaccine, reported that the vaccine production was discontinued in April this year; Kangtai Biotech recorded the impairment of new crown vaccine assets earlier in August last year. More companies have silently stopped the development of related products.

However, it is difficult to explain Pfizer's insistence on going its own way simply by saying "the ship is big and not good to turn around".

In fact, although Pfizer is known as the "first in the universe", there have not been many innovative achievements in recent years, and it has not come up with representative products that have swept the world. The new crown drug and the new crown vaccine hang on the little face Pfizer has left.   

On October 20, Pfizer's $43 billion plan to acquire Seagen was finally approved by the European Union, which means that Pfizer has cut into the field of ADC drugs, which is a new field where epoch-making products may appear, but Pfizer has to rely on heavy acquisitions to keep them from falling behind in the new round of technology war for biopharmaceuticals.

However, Pfizer is still a company worthy of domestic emulation. In January this year, Pfizer's CEO said in an interview that the most drastic reform had been initiated: it would divest the consumer health products and generic drug businesses that were slow to increase revenue, involving star products such as Lipitor and Viagra Viagra.

Competition from foreign pharmaceutical companies is usually a one-move match. During the global epidemic, two vaccines were mainly used abroad. Nowadays, the diet pills that are popular all over the world are mainly the world of the Novo Nordisk family. Even if it is the anticancer drug PD-1, there are only two mainstream varieties. Once the lack of market prospects is found, these big pharmaceutical companies will resolutely cut their positions, just like Pfizer gave up expectations for new crown products this time.

On the other hand, Chinese pharmaceutical companies, there are a bunch of competitors on each variety, the Red Sea is everywhere, the strength of these competitors is not strong, many "dragon heads" are also short people pick generals, have to compete fiercely in homogeneous varieties.

The lack of source innovation and blindly following imitation have led to today's situation. The Red Sea is boundless, and when the "Pfizer of China" will appear is still far away.