Centrum: Impact Of Covid-19 Pandemic On Pfizer’s Fourth Quarter; Revenue Drops By 6% YoY

Centrum Broking Report

Pfizer’s fourth quarter for fiscal 20 results were below Centrums Broking’s estimates largely due to lower sales and EBITDA. Revenues declined by 6% YoY. The adjusted growth for the quarter and year ended March 31, 2020 would have been 3.5% and 5.8% respectively. The current quarter sales have been impacted by divesture of rights and interests in certain brands and the Covid-19 pandemic. The costs have been largely similar or lower except the employee costs which short up 24% YoY in fourth quarter. Gross margins for the quarter stood at 61.9% Vs 65.7% YoY Vs 62.7% quarter on quarter basis.

Prevenar 13 accounts for approximately 16% of sales, potential risk of NLE. The only vaccine brand from Pfizer India portfolio, that continues to hold the highest market share in a two-player private pneumococcal vaccine market. The brand may face some growth struggle, considering the anticipated risk of pneumococcal vaccines under the government’s UIP program could bring price regulation. This brand contributes nearly 16% of sales and any risk to its price would hurt that year’s profit and loss. As a risk mitigation plan the management has improved it's focus on marketing the Prevnar vaccine for adult patients in India (only player approved for this indication globally)

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