Pfizer (NYSE:PFE) shares are still declining post-pandemic! Does the company have a future?

The dream run Pfizer had during the pandemic was not going to last forever. But while certain companies that derived a windfall during the pandemic (one example being Sonic (ASX:SHL)) had decent businesses pre-COVID and began to ‘normalise’ post-pandemic, Pfizer has continued to decline (shares have dropped another 12% in 2025).

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Overview of Pfizer

Pfizer is one of the world’s largest and oldest pharmaceutical companies, founded in New York in 1849. It has a long history of bringing many major drugs and vaccines to markets, even though various acquisitions, divestments and spin-offs. Obviously the COVID vaccine (Comirnaty) made it a household name, but it also has the antiviral treatment Paxlovid that also was a windfall. It also has the Prevnar family of pneumococcal vaccines, the oral anticoagulant Eliquis and a handful of oncology treatments including Ibrance, Xtandi, Inlyta, and Xeljanz.

Benefiting from the pandemic and its aftermath

Pfizer made a lot of money from the products, making US$36.8bn from Comirnaty alone in 2021 – impressive considering it was only in clinical trials the year before. In 2022, it made another US$37.8bn from Comirnaty and US$18.9bn from Paxlovid, meaning a combined US$56-57bn.

After 2022, demand fell as pandemic waves eased and governments scaled back procurement. In 2023, Pfizer projected revenues to be US$13.5bn for the vaccine and US$8bn for Paxlovid. Then in 2024, total COVID revenue was expected to be US$8bn.

Now, of course, this was not going to last forever, even if not for anti-vaxxer sentiment in the US that is hitting several companies including CSL. But this is arguably the least of the company’s worries.

A bigger cliff is ahead

One of the key risks facing biotech companies at all times is patent cliffs for legacy drugs. When they come off patent, they face competition from generics and biosimilars and this erodes revenues.

Don’t take our word for it – consider that when AbbVie’s Humira’s 20-year exclusivity period ended in 2023, nine biosimilars entered within the rest of the year. And this was not just from amateur companies – they came from companies including Pfizer and Novartis. Yes, they have not wiped out Humira’s sales, but they did make a dent. Humira sales were 31% lower in the first 9 months of 2023 compared to the 12 months prior.

The latter half of the 2020s is set to see particularly large losses. EY has estimated that the world’s top 20 biotechs may lose US$180bn in sales due to patents for their drugs expiring. Analysis by Evaluate Pharma forecasted in 2023 that $59 billion in sales would be at risk in 2029 alone. Up until and including 2030, the total is $236bn. This list is headed by Merck’s anti-cancer drug Keytruda.

Pfizer is facing it more than most

Pfizer itself knows this well as it saw this happen to a number of legacy products such as Lipitor, Geodon and Protonix. Well, history is repeating itself as several drugs come off patent in 2026-28, and this could cost it US$17-18bn in revenues (30-40% of revenues). This includes Prevnar, Xtandi, Iberance, Eliquis, Inlyta and Xeljanz. Analysts expect revenues to have peaked in CY24 at US$63bn but to decline to US$54bn by CY29.

And so Pfizer is doing what other biotechs are: buying smaller companies with assets that show potential to fill the gap. In 2023, it bought Seagen, a specialist in antibody-drug conjugates and obesity/weight-loss drug developer US$7.3bn. It has also licensed 3SBIO for an anti-PD-1/VEGF bispecific antibody, SSGJ-707, which is in development.

These acquisitions are not just those that’ll provide revenues but also are less likely to face near-term generic competition because they are harder to replicate. The good news is that the bulk of the R&D has been done on them. Analysts have projected Seagen could provide ‘mid-single-digit billions’ by the late 2020s, so say US$6-8bn. That does leave ~US$10bn to fill, and success does depend on market adoption. Pfizer may need to undertake further M&A to plug the hole entirely.

Conclusion

Pfizer was a major healthcare company even before the pandemic and still is now. But this also means it is facing the Patent Cliff and having to overcome it. The case study of AbbVie depicts there will be a hit…but also that it can be overcome as AbbVie has seen newer drugs like Skyrizi and Rinvoq offset losses.

The challenge with Pfizer is that is already saw a decline in revenue and investor popularity as COVID revenues moderated; and we are not entirely confident the cliff can be entirely offset. Given that there are other companies more diversified such as Johnson and Johnson, we’ll sit on the sidelines for now.