The Strategic Repositioning Driving Pfizer's Growth Story

• Pfizer’s non-COVID portfolio grew 12% in 2024, led by a 65% surge in Vyndaqel sales and 26% oncology revenue growth.
• Comirnaty revenue collapsed 52%, while Paxlovid sales normalized, forcing Pfizer to accelerate its specialty and oncology pivot.
• Seagen’s $3.4B contribution bolstered oncology expansion, but $2.9B in Q4 impairments reflect pipeline volatility.
• Cost-cutting efforts saved $4.5B, yet Seagen integration and high R&D ($10.8B) demand disciplined execution.
• Health Care > Pharmaceuticals

TradingKey - After a generation-defining bonanza of COVID-19 vaccines and antiviral therapeutics, Pfizer reaches a crossroads. The pandemic-era goliath of biopharma, whose reach was once celebrated as well as its blockbuster franchise, is today reshaping its anchor as pandemic-driven revenue evaporates. Despite a spectacular collapse in Comirnaty sales and whipsawing fluctuations from Paxlovid's record-breaking accounting, Pfizer posted $63.6 billion in FY2024 revenues with 12% operational growth among its non-COVID products.

That transition isn't storytelling embellishment. There's disciplined cost rebalancing strategy, $10.8 billion of R&D deployment, and pipeline rebasing towards oncology leadership and long-term innovation hidden under it.

No longer depending on emergency-use authorizations or single-book deals, Pfizer's investment case today hinges on franchise plays such as the Vyndaqel franchise family (up 65%), Eliquis, Xtandi, and recently acquired Seagen oncology assets. The shift to durable specialist care and precision cancer medicines suggests a company ending old dependence on episodic revenues and building a platform for recurring growth. But this transition doesn't come frictionless: margin pressures, asset writedowns, and softening in incumbent vaccines such as Abrysvo are sources of strategic stress.

With its updated 2025 revenue guidance of $61 to $64 billion, as well as its guided adjusted EPS of $2.80 to $3.00, Pfizer is sending a signal of operational stability. But to investors rebuilding their models post-pandemia, everyone wants to know if it can generate durable value from its huge pipeline. The answer lies in dissecting not only revenue mix, but also capex discipline, quality of pipeline, and economics of its next growth phase.

Source: Ycharts

Scaling innovation during margin realignment

Pfizer's 2024 report presents a transition business model. With Comirnaty sales declining by 52% and normalization of Paxlovid growth suppressing underlying momentum, real drivers came from outside the pandemic narrative. Revenues from the Vyndaqel family increased by 65% to $5.45 billion, with increased diagnoses and access helping the cause. Seagen's oncology business, fully integrated this year following its $43 billion acquisition, contributed $3.4 billion, a strong performance supporting near-term revenue rationale for the deal. Pfizer's business segmentation continues to pivot towards specialty and oncology. 

Specialty care generated $16.7 billion in revenue (+12% operationally), and oncology was up 26% to $15.6 billion. Primary care trailed with a 2% operational decrease, dragged down by vaccine softness and COVID-era successor product declines. Revenue transformation also has with it more slender cost structures. The cost realignment program, with a goal of $4.5 billion by end of 2025, has already delivered: 2024 cost of sales reduced by 32% in a reduced asset-focused approach, SI&A was flat, and R&D was more efficient with more focused asset concentration.

Yet all this came at a price tag. Pfizer posted $2.9 billion in intangible asset impairments in Q4 alone, largely due to deprioritized pipeline assets like B7H4V and Zavzpret. Some impairments are because of evolving science and marketplace trends, but their size represents ongoing volatility in Pfizer's allocation of capital. Additionally, the company's R&D investment, $10.8 billion in 2024, requires smarter returns to justify its magnitude. The appointment of Chris Boshoff as CSO in January 2025 and renewed oncology focus mean leadership alignment on this axis.

Pfizer's capital allocation reflects its focus on repositioning programs. Share buybacks remained inactive in 2024, with $9.5 billion spent on dividends and a focus on deleleveraging post-Seagen. Management expects balance sheet liquidity to rebound in 2025, perhaps resuming business development and buybacks. The course followed reflects a coordinated shift towards product-driven growth as opposed to financial engineering.

Source: Q4-Earnings

Steering Through a Crowded Biopharma Arena

Pfizer works in one of the most highly competitive sectors, where therapeutic differentiation, pricing leverage, and regulatory nimbleness are conditions of survival. Within oncology, Pfizer's goal of world-class leadership sets it against aggressive incumbents such as Merck, Roche, and AstraZeneca. Seagen's ADC platform provides Pfizer with a plausible bet to cut into a space, with Adcetris and Padcev already delivering robust adoption. The challenge will, however, come in scaling assets like Elrexfio and Braftovi into blockbuster status in a tidal wave of PD-1 combinations and targeted agents.

Pfizer's reliance in cardiovascular and primary care on Eliquis (co-marketed with Bristol Myers Squibb) triggers biosimilar pressure. Generic erosion is already evident in overseas markets. Xeljanz also has experienced demand compression from revised safety labeling and changing prescribing trends. Although Vyndaqel's performance helped to reverse some of this erosion, it too will continue to experience payer pressure as diagnoses increase.

Meanwhile, Pfizer's Abrysvo lagged expectations in vaccines, with Q4 sales down 62% reflecting soft U.S. demand in older populations. The segment has been a relative soft patch vs. GSK and Moderna. Comirnaty, formerly the crown jewel, is now a tailwind risk with its 53% revenue decline rate and uncertain demand path. Across the board, Pfizer's moat remains strongest where it has its blend of scale, diagnostics-driven demand (e.g., Vyndaqel), and first-mover oncology combinations. Where the company has no differentiation, margin dilution and competitor churn are still real risks.

Source: visiblealpha.com

Pipeline Leverage and Pathways to Monetization

Pfizer's long-term potential rests on turning optionality in its pipeline into lasting earnings. With over 110 programs under development and over 35 in phase 3 or registration stage, the research-and-development engine is strong but needs to enhance capital efficiency. Some recent highlights are accelerated approval and favorable Phase 3 data for the Braftovi combination in colorectal cancer and encouraging sasanlimab data in bladder cancer. Those assets, if successfully commercialized, may create multibillion-dollar addressable markets.

Yet, these recent impairments call into question internal prioritization and market vision. The corporate exit of its Duchenne muscular dystrophy program and impairment of assets such as Tukysa and Zavzpret are evidence of either overestimated TAM or changing competitive realities. To balance this, Pfizer has been realistic in de-prioritizing non-core assets and reinvesting in higher-conviction oncology and rare disease wagers.

From a financial perspective, Pfizer's 2024 generated $17.7 billion in adjusted income (up 69% YoY) and $3.11 in adjusted EPS. Notably, this profitability was accompanied by decreasing COVID-19 revenue reliance. The adjusted cost of sales ratio fell to 25.8% from 40.3% in 2023, reflecting normalization of the gross margin. SG&A spend continues to be elevated, however, due to product launches and Seagen integration. Strong commercial execution and additional cost leverage will be needed to achieve management's aim of returning to pre-pandemic operating margins in two years.

Free cash flow continues to be limited by high integration and research and development costs. But switching away from concentration on Comirnaty/Paxlovid has significantly reduced risk in the business model. Pfizer's full-year 2025 guidance represents a stable foundation: $61 to $64 billion in revenues and $2.80 to $3.00 in adjusted EPS, with no repurchases of shares scheduled. This conservativism supports discipline in terms of capital with optionality left intact.

Source: Q4-Deck

Valuation Reset or Structural Discount?

Pfizer sits near 10x forward prices and an EV/EBITDA multiple near 8x, significantly below its historical averages as well as its peer medians. The discount also captures continuing doubts with respect to pipeline execution, quality of earnings, and growth sustainability. But price-versus-intrinsic-value gap perhaps may turn out to be exaggerated. On an EBITDA-adjusted basis, normalized for Seagen contributions and stripping out COVID distortions, Pfizer's growth path implies a rerating if larger pipeline assets such as Elrexfio, Braftovi, and sasanlimab achieve scaling success.

A sum-of-the-parts strategy assumes upside potential. The $5.45 billion-per-year Vyndaqel franchise may warrant a $25-30 billion valuation on 5-6 times revenue, similar to other similar rare-disease assets. At maturing, yet still producing $7.4 billion worldwide, Eliquis continues to contribute, and specialty oncology approaches a $10 billion run rate ex-Seagen. With normalized margins and mid-single-digit growth in topline, DCF analyses based on a 9% discount rate and conservative terminal growth (2%) imply intrinsic value in the $40–45 range relative to where it's currently trading near $28–29.

However, execution determines valuation potential. The discount in the market isn't irrational, it accounts for risk on regulatory decisions, biosimilar threats, and asset write-offs. Nonetheless, long-term investors who desire yield (>7% dividend) and underappreciated pipeline leverage are offered an asymmetric profile by Pfizer.

Source: Dividend.com

Risks: Cost Creep and Competitive Attrition

Pfizer risks execution on multiple fronts. First, integration complexity with Seagen has a high likelihood of inflating SG&A more than anticipated, thereby slowing margin expansion. Second, near-$3 billion pipeline impairments in Q4 alone may herald ongoing misallocation risk. Third, erosion from biosimilars, particularly for oncology and Eliquis biosimilars, imperils mature asset revenues. Fourth, consistency of vaccine takeup, Abrysvo, in particular, is indicative of commercialization friction.

Share repurchasing and low near-term capital returns, barring dividends, may cap near-term excitement in capital markets. Furthermore, high R&D expenses in the face of a difficult environment of regulations may squeeze returns. Lastly, geopolitical and FX volatility, due to Pfizer's geographical reach, continues to act as a drag factor. 

Conclusion: Building on Solid Ground 

Pfizer is no longer a COVID windfall tale, it's a pipeline monetization story with franchises with staying power and prudent capital deployment. Not riskless, it's valued too pessimistically today. With execution intact, a re-rating into normalized multiples on the back of oncology momentum and specialty care resiliency seems reasonable.