Pfizer Inc. (PFE.US) reported better-than-expected Q4 earnings, but investors are more concerned about whether the weight loss drug can support further growth.

On Tuesday, Pfizer Inc. (PFE.US) announced its fourth-quarter financial report, with revenue and profits exceeding market expectations despite continued contraction in demand for COVID-related products. The company also reiterated its moderate guidance for 2026, which had caused investor concerns when announced in December. Additionally, Pfizer Inc. released preliminary data on its new weight-loss therapy, but the disclosed information was limited. The financial report showed that Pfizer Inc. had fourth-quarter revenue of $17.56 billion, a slight decrease of about 1% year-on-year. The decline in revenue was mainly due to reduced demand for the COVID vaccine and the COVID oral medication Paxlovid. Vaccine sales were $2.3 billion, higher than the expected $2 billion, but a one-third decrease year-on-year, while Paxlovid sales were only $2.18 billion, far below the expected $5.89 billion, with a more than two-thirds decline year-on-year. However, this number was higher than the market's expected $16.95 billion, as Pfizer Inc.'s various blockbuster drugs performed as expected. Despite facing competition from Merck & Co., Inc.'s new product, the company's star pneumonia vaccine Prevnar achieved $1.7 billion in sales, slightly higher than the expected $1.6 billion. The anticoagulant drug Eliquis had sales of $2 billion, and the heart disease drug Vyndaqel had sales of $1.7 billion, both in line with market predictions. The company recorded a net loss of $1.65 billion during the period, or a loss of $0.29 per share. In the same period of the previous year, the company had achieved a net profit of $410 million, or earnings of $0.07 per share. Excluding restructuring costs, intangible asset-related costs, and other non-recurring items, the company's adjusted earnings per share for the fourth quarter were $0.66, compared to the market's expected $0.57. Looking ahead, Pfizer Inc. maintained its 2026 performance guidance unchanged: adjusted earnings per share are expected to be between $2.80 and $3.00, with revenue projected to be between $59.5 billion and $62.5 billion, roughly on par with 2025. The company had previously stated that the outlook for 2026 was lackluster, partly due to the continued decline in sales of the COVID vaccine and Paxlovid. It was estimated that sales of these two products would decrease by approximately $1.5 billion year-on-year to $5 billion. In addition to COVID products, the loss of market exclusivity for several drugs will also lead to a further approximate $1.5 billion year-on-year decrease in Pfizer Inc.'s annual revenue. Several drugs, including Prevnar, are facing increasingly fierce market competition. Pfizer Inc.'s Chief Financial Officer, Dave Denton, stated in December last year that the 2026 performance guidance had fully taken into account the impact of price compression and margin narrowing. As part of a landmark drug pricing agreement reached with former U.S. President Trump, Pfizer Inc. plans to provide greater discounts in its Medicaid business. Under the agreement, Pfizer Inc. has agreed to supply existing drugs to Medicaid insured patients at the lowest selling price in other developed countries, and has pledged to provide equal "most favored nation" drug pricing to Medicare, Medicaid, and commercial insurance institutions. In exchange, Pfizer Inc. will receive a three-year tariff exemption. In January of this year, Pfizer Inc.'s rheumatoid arthritis treatment drugs Xeljanz and Xeljanz XR were included in the list of drugs for price negotiation in Medicare insurance, and the new prices negotiated will take effect in 2028. Doubts remain as to whether the new weight-loss drug can fill the revenue gap To offset the impact of declining sales of COVID products and shrinking revenue from older drugs, the pharmaceutical giant is focusing on long-term investments in pipeline products, including the $10 billion acquisition of the obesity biotechnology company Metsera. Pfizer Inc. also simultaneously disclosed the Phase II clinical data of a weight loss injection from Metsera in this performance release. The drug can be administered once a month and has significantly weight-loss effects for patients, highlighting the potential value of this acquisition to the market. However, after the financial report was released, Pfizer Inc.'s stock price fell by more than 5% pre-market. Due to the limited details disclosed in this clinical trial, investors have doubts: whether the high-priced acquisition of Metsera can fill the revenue gap caused by the decline in sales of the COVID vaccine and oral medication business. The clinical data showed that after 28 weeks of treatment, subjects lost up to 12.3% of their weight compared to the placebo group. Analysts point out that more detailed information is still needed to accurately assess the positioning of this drug in the rapidly evolving market dominated by Novo Nordisk A/S Sponsored ADR Class B (NVO.US) and Eli Lilly (LLY.US). Jared Holz, a healthcare industry expert at Wells Fargo, said, "The current market is firmly controlled by two well-established companies." He believes that Pfizer Inc. needs to rely on products that significantly outperform others in terms of efficacy or safety to establish a foothold in this field.