Pfizer Inc. (NYSE: PFE)

Pfizer’s second-quarter 2025 financial performance demonstrated the company’s continued momentum in executing its strategic priorities. Total revenue of $14.7 billion represented a 10% operational increase compared to the prior year quarter, driven by strong growth across multiple therapeutic areas and successful commercial execution initiatives.

The company’s profitability metrics showed significant improvement, with adjusted diluted EPS of $0.78, a 30% increase from $0.60 in Q2 2024. This strong performance was supported by operational revenue growth and the benefits of ongoing cost improvement initiatives. Reported diluted EPS increased substantially to $0.51 from $0.01 in the prior year, reflecting improved operational performance.

Revenue growth was broad-based, with operational increases primarily driven by the Vyndaqel family (up 21%), Comirnaty (up 95%), Paxlovid (up 71%), and Padcev (up 38%). These gains more than offset the impact of higher manufacturer discounts resulting from the Inflation Reduction Act Medicare Part D Redesign and competitive pressures in certain therapeutic areas.

The company’s adjusted cost of sales as a percentage of revenue was 23.9%, compared to 20.8% in the prior year quarter, reflecting some pressure from product mix and manufacturing costs. However, this was partially offset by improved operational efficiency and the ongoing benefits of Pfizer’s comprehensive cost realignment program.

For the six-month period, revenue increased 1% to $28.4 billion, with adjusted diluted EPS growing 20% to $1.69. The company’s strong cash generation and disciplined capital allocation continue to support its strategic investments while returning significant value to shareholders through dividends.

Primary Care portfolio delivered strong performance with revenue of $5.54 billion, up 12% operationally. This was led by Eliquis, which grew 6% operationally to $2.0 billion despite pricing pressures from the IRA Medicare Part D Redesign. Comirnaty showed exceptional growth of 95% operationally, driven by higher market share in the U.S. and increased contractual deliveries internationally.

Specialty Care generated $4.38 billion in revenue, representing 7% operational growth. The Vyndaqel family was the standout performer with 21% operational growth to $1.62 billion, driven by continued strong demand and patient diagnosis uptake, particularly in the U.S. and international developed markets. This growth was partially offset by lower net pricing due to IRA impacts.

Oncology portfolio achieved 11% operational growth to $4.39 billion, demonstrating Pfizer’s strong position in cancer care. Padcev showed robust 38% operational growth to $542 million, driven by increased market share in first-line locally advanced or metastatic urothelial cancer. Xtandi contributed $566 million with 14% growth, while Ibrance faced headwinds with an 8% operational decline to $1.05 billion.

Several products showed particularly strong momentum: Paxlovid grew 71% operationally to $427 million, benefiting from higher net pricing following the transition from U.S. government agreements. Abrysvo demonstrated significant growth of 155% operationally, driven by strong U.S. demand for maternal indications and international launch uptake.

The company’s diversified portfolio continues to provide resilience, with growth drivers across multiple therapeutic areas helping to offset competitive pressures and pricing headwinds in certain mature products. Pfizer’s focus on high-value specialty medicines and innovative therapies is positioning the company well for sustained growth.

Pfizer made significant strategic progress during the quarter, advancing its R&D pipeline and strengthening its competitive position through business development activities:

Major Pipeline Developments

• Braftovi (encorafenib): Announced statistically significant Phase 3 BREAKWATER trial results showing 51% reduction in death risk for metastatic colorectal cancer with BRAF V600E mutation
• Hympavzi (marstacimab): Positive Phase 3 BASIS study results demonstrating superiority in hemophilia A or B with inhibitors treatment
• Xtandi (enzalutamide): Positive overall survival data from Phase 3 EMBARK study in non-metastatic hormone-sensitive prostate cancer
• vepdegestrant: Clinically meaningful progression-free survival improvement in ER+/HER2- breast cancer patients with estrogen receptor 1 mutations

Business Development Activities

Pfizer completed a transformative licensing agreement with 3SBio for SSGJ-707, a bispecific antibody targeting PD-1 and VEGF. The deal includes:

• $1.25 billion upfront payment
• Up to $4.8 billion in milestone payments
• Tiered double-digit royalties on sales
• Option for exclusive rights in China for additional $150 million
• $100 million equity investment in 3SBio

The company also announced the Eliquis 360 Support program, offering eligible cash-paying patients a discounted rate more than 40% below list price, demonstrating Pfizer’s commitment to patient access.

Cost Improvement Initiatives

Pfizer remains on track to deliver approximately $7.2 billion in overall anticipated net cost savings from its comprehensive cost improvement initiatives by the end of 2027:

• $4.5 billion from ongoing cost realignment program by end of 2025
• Additional $1.2 billion in net cost savings, primarily in SI&A, by end of 2027
• $500 million from R&D reorganization to be fully realized by end of 2026
• $1.5 billion from Manufacturing Optimization Program by end of 2027

Based on strong year-to-date performance and continued confidence in the business, Pfizer raised its full-year 2025 financial guidance:

Updated 2025 Guidance

• Revenue: $61.0 to $64.0 billion (reaffirmed)
• Adjusted diluted EPS: $2.90 to $3.10 (raised from $2.80 to $3.00)
• Adjusted SI&A expenses: $13.1 to $14.1 billion (reduced from $13.3 to $14.3 billion)
• Adjusted R&D expenses: $10.4 to $11.4 billion (reduced from $10.7 to $11.7 billion)
• Effective tax rate on adjusted income: approximately 13.0% (improved from 15.0%)

The updated guidance reflects several positive factors:

• Strong year-to-date operational performance
• Favorable foreign exchange impact
• Progress with ongoing cost improvement initiatives
• Improvement in effective tax rate

The guidance absorbs a one-time $1.35 billion Acquired In-Process R&D charge related to the 3SBio licensing agreement, which will be recorded in Q3 2025 with an expected unfavorable impact of approximately $0.20 per share.

Pfizer’s guidance also incorporates the impact of currently imposed tariffs from China, Canada, and Mexico, as well as potential price changes based on recent policy communications. The company’s diversified global operations and strong cash generation provide resilience against various external pressures.

Management emphasized confidence in the company’s ability to execute against strategic priorities and deliver strong results for shareholders, supported by the strength of the product portfolio, advancing pipeline, and comprehensive cost management initiatives.