How Pfizer Makes Money

Pfizer Inc. (PFE) generates revenue globally through the development, manufacture, and sale of a broad range of biopharmaceutical products. These products are derived from biological sources, such as organs and tissues, microorganisms, or animal fluids, and are obtained through biotechnological processes. Pfizer works across developed and emerging markets and collaborates with other companies to develop therapies and medicines.

In 2020, Pfizer developed an mRNA (messenger ribonucleic acid)-based vaccine for COVID-19 in collaboration with BioNTech SE (BNTX), a Germany-based biotechnology company. In December 2020, the vaccine received emergency use authorization (EUA) from the U.S. Food and Drug Administration (FDA) for individuals 16 years of age and older. In August 2021, the vaccine received the FDA’s full approval for prevention of COVID-19 in individuals 16 years of age and older. It was the first COVID-19 vaccine to receive full approval and is currently being marketed under the name Comirnaty.

The company operates in highly competitive and often highly regulated markets. The pharmaceutical industry requires significant spending on research and development. Pfizer’s main competitors include Merck & Co. Inc. (MRK), Switzerland-based Novartis AG (NVS), Eli Lilly & Co. (LLY), Bristol-Myers Squibb Co. (BMY), and Johnson & Johnson (JNJ).

Pfizer’s Financials

In early February 2022, Pfizer announced financial results for the fourth quarter (Q4) of its 2021 fiscal year (FY), which ended Dec. 31, 2021. The company reported net income attributable to common shareholders of $3.4 billion, an increase of 300.6% compared with the year-ago quarter. Revenue for the quarter rose 104.9% year over year (YOY) to $23.8 billion.

The company said that its revenue growth in the fourth quarter was primarily driven by sales of Comirnaty, which contributed $12.5 billion in direct sales and alliance revenues. Some of its other products, including Eliquis, Vyndaqel/Vyndamax, and Oncology Biosimilars, also contributed to growth during the quarter. In December 2021, Pfizer received an EUA from the FDA for Paxlovid, an oral antiviral treatment for COVID-19 in adults and pediatric patients 12 years of age and older or weighing at least 88 pounds. Paxlovid contributed $76 million in U.S. sales in Q4.

Pfizer’s Business Segments

Pfizer separates its business into two separate operating segments: Pfizer Biopharmaceuticals Group and Pfizer CentreOne. Within the first segment, the company provides a breakdown of revenue, but not profits, across the following therapeutic fields: Internal Medicine; Oncology; Hospital; Vaccines; Inflammation and Immunology; and Rare Disease. The company also separates the revenue generated through its contract development and manufacturing organization into its Pfizer CentreOne segment.

We look at each of Pfizer’s Biopharmaceuticals Group therapeutic areas and its CentreOne segment in more detail below.

Internal Medicine

Internal Medicine develops therapeutics for cardiovascular disease, diabetes and related disorders, certain liver diseases, obesity and related co-morbidities, and more. Its key products include Eliquis, Chantix/Champix, and the Premarin family. Revenue in Q4 FY 2021 fell 3.2% to $2.2 billion, comprising over 9% of Pfizer’s total revenue.

Oncology

Oncology seeks to develop innovative treatments for breast, prostate, lung, colorectal, ovarian, renal, hematologic, and other forms of cancer. Key products include Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi. Quarterly revenue rose 7.2% to $3.2 billion. The Oncology field comprises about 14% of total revenue, making it Pfizer’s second-largest source of revenue.

Hospital

The Hospital field includes the company’s global portfolio of sterile injectable and anti-infective medicines. Its key products include Sulperazon, Medrol, Zithromax, Vfend, and Paxlovid, Pfizer’s aforementioned new oral antiviral treatment for COVID-19. Revenue rose 1.2% to $1.9 billion in Q4 FY 2021 compared with the year-ago quarter. The Hospital field generates nearly 8% of total revenue.

Vaccines

The Vaccines field specializes in developing vaccines for pneumococcal and meningococcal diseases. It is also working on vaccines against other major infectious diseases and infectious diseases that have significant unmet medical needs. Its key products include Comirnaty, Prevnar 13/Prevenar 13 (pediatric/adult), Nimenrix, and FSME/IMMUN-TicoVac. Revenue for the quarter rose 595.4% to $13.9 billion, comprising more than 58% of the company’s total revenue. It is now Pfizer’s largest source of revenue.

Inflammation and Immunology

The Inflammation and Immunology field develops treatments for chronic immune and inflammatory diseases. It focuses on: rheumatology, including rheumatoid arthritis; gastroenterology/hepatology, such as inflammatory bowel disease; and medical dermatology, including atopic dermatitis and psoriasis. Key products include Xeljanz, Enbrel (outside the United States and Canada), and Inflectra. Quarterly revenue fell 2.8% to $1.2 billion, accounting for about 5% of the total.

Rare Disease

The Rare Disease field is focused on developing therapies for patients of rare diseases, especially in areas such as rare cardiology, endocrinology, inborn errors of metabolism, and gene therapy. Its key products include Vyndaqel/Vyndamax, BeneFIX, and Genotropin. Quarterly revenue rose 9.8% to $950 million. The Rare Disease field accounts for nearly 4% of total revenue.

Pfizer CentreOne

Pfizer CentreOne is not a separate therapeutic area, but the company’s contract development and manufacturing organization. Prior to Q4 FY 2021, the organization had been managed within the Hospital therapeutic area. It includes revenue for the manufacturing of legacy Upjohn products, such as Viatris, as well as for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech. In Q4 FY 2021, the segment’s revenue rose 24.0% to $382 million. It accounts for about 2% of company revenue.

Pfizer’s Recent Developments

On Feb. 12, 2022, China’s National Medical Products Administration gave conditional approval for Paxlovid, Pfizer’s oral antiviral treatment for COVID-19. It is the first oral pill for COVID-19 approved for use in the country. The decision from China’s medical products regulator comes nearly two months after Paxlovid became the first oral antiviral treatment for the disease to receive an EUA by the FDA in the U.S.

On Feb. 1, 2022, Pfizer and BioNTech initiated a rolling submission that seeks to amend the EUA of their COVID-19 vaccine to include children 6 months through 4 years of age. The company was asked to begin the rolling submission process by the FDA. The FDA had originally scheduled a meeting to discuss the request for Feb. 15, 2022. However, the meeting was postponed on Feb. 11, 2022, to evaluate additional data from the ongoing clinical trials being conducted by Pfizer and BioNTech. The agency is awaiting further data from the two companies before determining the date for the postponed meeting.