Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Pfizer rolls out another cost-cutting program, sets $1.5 billion target by 2027

Published 05/22/2024, 12:59 PM
Updated 05/23/2024, 04:51 AM
© Reuters. FILE PHOTO: Pfizer logo is seen in this illustration taken, May 1, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
PFE
-

(Reuters) -U.S. drugmaker Pfizer (NYSE:PFE) on Wednesday launched a new multi-year program to reduce its expenses by about $1.5 billion by the end of 2027, adding on to a $4 billion cost cutting plan it announced last year.

Investors have fled from Pfizer as pandemic worries declined and billions of dollars in COVID-19 vaccine and treatment sales disappeared. The company responded with a $43 billion purchase of cancer drugmaker Seagen, the cost cuts, and an internal restructuring.

Pfizer's shares were up 2.6% at $29.30 in afternoon trading. They are still off around 24% over the past year and about half of their peak pandemic value of December 2021.

Pfizer made the disclosure on Wednesday in a filing with the Securities and Exchange Commission.

The company said it would record one-time charges, mainly related to severance and implementation costs, of $1.7 billion as part of the new program. It expects to record a majority of the charges this year, with the actual cash outlays expected in 2025 and 2026.

The focus will be on "operational efficiencies, network structure changes, and product portfolio enhancements," the company said.

Pfizer said that the program will take multiple years because of the complexity in manufacturing and longer lead times required to make changes.

A spokesperson said none of the job cuts associated with the new program have been announced yet.

She said further details of the program would likely be disclosed at future earnings calls and investor events.

© Reuters. FILE PHOTO: Pfizer logo is seen in this illustration taken, May 1, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Pfizer raised its annual earnings forecast and posted a better-than-expected first-quarter profit earlier this month, helped in part by the cost reductions. Chief Financial Officer David Denton said then that the cuts had helped improve its margins.

"Our cost control element across our manufacturing platform was really strong. We expect that to continue to be a focus," he said then.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.