Here’s a shocking truth: even as demand for Pfizer’s Covid-related products wanes, the pharmaceutical giant is not only surviving but thriving. But here’s where it gets controversial—while Pfizer’s Covid vaccine and antiviral pill Paxlovid are seeing a steep decline, the company’s latest earnings report reveals it’s beating quarterly estimates and standing firm on its 2026 outlook. How? Let’s dive in.
On Tuesday, Pfizer reported fourth-quarter results that exceeded Wall Street’s expectations, despite a 1% dip in revenue compared to the previous year. The drop is largely attributed to reduced demand for its Covid vaccine and Paxlovid, which together are expected to see a $1.5 billion year-over-year decline to $5 billion. And this is the part most people miss—Pfizer isn’t just sitting back. Instead, it’s doubling down on long-term investments, like its $10 billion acquisition of obesity biotech Metsera, which is already showing promise. Early data from a mid-stage trial revealed that Metsera’s monthly obesity injection could drive significant weight loss, positioning Pfizer for future growth.
But that’s not all. Pfizer is also slashing costs by a whopping $7.7 billion by 2027 through two separate initiatives. In the fourth quarter, the company reported adjusted earnings per share of 66 cents, beating the expected 57 cents, and revenue of $17.56 billion, surpassing the $16.95 billion forecast. However, it’s not all rosy—Pfizer booked a net loss of $1.65 billion, a stark contrast to the $410 million net income from the same period last year.
Looking ahead, Pfizer’s 2026 guidance projects adjusted profit between $2.80 and $3 per share, with revenue ranging from $59.5 billion to $62.5 billion—largely flat compared to 2025. This modest outlook, which rattled investors in December, is partly due to declining Covid product sales and increased competition for blockbuster drugs like Prevnar. Here’s the bold part—Pfizer’s CFO, Dave Denton, hinted at “price compression and margin compression” in 2026, thanks to deeper discounts in its Medicaid business as part of a landmark drug pricing deal with President Donald Trump. Under this agreement, Pfizer will sell existing drugs to Medicaid patients at the lowest prices offered in other developed countries, ensuring “most-favored-nation” pricing for new drugs across Medicare, Medicaid, and commercial payers. In return, Pfizer gets a three-year exemption from tariffs.
Meanwhile, Pfizer’s rheumatoid arthritis treatments, Xeljanz and Xeljanz XR, have been selected for the third round of Medicare drug price negotiations, with new prices taking effect in 2028. This move could further squeeze margins but also underscores Pfizer’s commitment to accessibility.
Now, here’s the thought-provoking question—as Pfizer navigates declining Covid revenues and increased pricing pressures, is its focus on long-term investments like Metsera enough to sustain growth? Or will the company struggle to balance innovation with profitability? Let us know your thoughts in the comments—this is a debate worth having.
