Pfizer is raising the bar for its sweeping cost-savings drive yet again, this time cranking up the total target to $7.7 billion through 2027.
Of that total, $4.5 billion in net cost savings will be realized by the end of this year from an ongoing cost-realignment program, the company said in its first-quarter earnings update.
In addition to previously disclosed cuts, the company is plotting an additional $1.2 billion in cost cuts largely tied to selling, informational and administrative functions. The company plans to achieve these savings thanks to the use of digital tools such as automation and AI, as well as simplification of its business processes, chief financial officer David Denton explained on a Tuesday conference call.
Meanwhile, the R&D organization isn't avoiding the axe. Pfizer anticipates making $500 million in R&D cuts by the end of 2026, with the "savings to be reinvested to the pipeline," the company said in the update.
The $1.7 billion in total new cuts come on top of a multibillion-dollar reorganization plan first unveiled in 2023. In October of that year, Pfizer laid out its intention to start an "enterprise-wide cost realignment program" that would chop $3.5 billion in annual expenses. The company added $500 million to the target in late 2023, then another $1.5 billion in May 2024 and $500 million in December 2024.
It’s a long-running mission supporting Pfizer’s goal of returning to pre-pandemic operating margins and driving operating efficiencies, Denton noted on the Tuesday call.
The reorganization isn't strictly about downsizing, though. As of the first quarter of 2025, the company had reinvested $2.2 billion into internal R&D projects, according to the Tuesday update. New chief scientific officer Chris Boshoff, M.D., Ph.D., has “moved both thoughtfully and quickly” in reshaping the R&D organization, CEO Albert Bourla, Ph.D., said on the conference call.
As for Pfizer's financial performance during the quarter, the drugmaker generated global sales of $13.7 billion, an 8% decline from the same period last year. The drop was largely attributed to a 75% sales decline in sales of COVID-19 antiviral Paxlovid.
On the flip side, COVID vaccine Comirnaty is doing better than its antiviral counterpart, delivering a 62% revenue boost versus the first quarter of 2024.
Outside of Pfizer's COVID products, heart disease franchise Vyndaqel grew sales 33% through “continuing uptake” in patient diagnoses. Other quarterly growth drivers included urothelial cancer antibody-drug conjugate (ADC) Padcev, migraine med Nurtec and lung cancer therapy Lorbrena.
Pfizer is sticking with its previously announced full-year revenue guidance of $61 billion to $64 billion, which as of now does not include potential impacts from future tariffs and policy changes, the company noted.
However, to help “navigate this fluid environment,” the company is deploying a cross-functional team to look into “a range of potential outcomes” and nail down strategies to help mitigate the potential impact of future trade and tariff policies.
That includes managing current inventory levels in “certain jurisdictions,” leveraging its domestic manufacturing footprint and the potential production of active pharmaceutical ingredients and products in the U.S., according to Denton.