*

Paxlovid sales surge to $2.7 billion, beating expectations

*

Pfizer ( PFE ) raises annual revenue forecast for COVID products

to

$10.5 billion

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Pfizer ( PFE ) management faces pressure from activist hedge fund

Starboard Value

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Pfizer ( PFE ) raises full-year profit forecast by 30 cents a

share

(Adds background on Starboard and analyst comment in paragraphs

7-9, updates premarket share move)

By Michael Erman and Bhanvi Satija

Oct 29 (Reuters) - Pfizer ( PFE ) reported

higher-than-expected profit on Tuesday due to strong sales of

COVID treatment Paxlovid, an important win for Chief Executive

Albert Bourla as he faces down activist investor Starboard.

The U.S. drugmaker has struggled with a sharp fall in sales

of its COVID vaccine and antiviral Paxlovid from pandemic

levels, prompting it to launch a cost-cutting program last year

and focus on deals to bolster its business.

On Tuesday, the company said the better-than-expected rise

in Paxlovid sales reflected higher infection rates during the

quarter and strong commercial execution.

"The demand for Paxlovid seems to have stabilized at the

current levels and appears to be closely correlated with each

wave of COVID-19," Bourla said in prepared remarks.

Shares were up 1.2% to $29.20 in premarket trading after the

company also raised its annual profit and sales forecast.

Pfizer ( PFE ) shares are trading at roughly half of their pandemic

peaks. Investors and analysts have said they want to see

improved profitability from the cost cuts as well as revenue

growth powered by its recent deals.

Activist hedge fund Starboard Value has argued that Pfizer's ( PFE )

board needs to hold management accountable for the company's

underperformance, particularly questioning its record for

producing profitable new drugs from internal research and

development or acquisition.

Pfizer ( PFE ) said it was on track to deliver at least $4 billion

in savings from its cost cut program this year.

"Management is doing a lot of the things Starboard wants

them to. Righting the ship takes time," BMO analyst Evan

Seigerman said. "It's going to take more than one quarter for

folks to gain full confidence. But this is definitely a step in

the right direction."

Paxlovid sales of $2.7 billion in the quarter blew past

analysts' expectations of $456.40 million. The U.S. experienced

a late summer spike in COVID-19 cases this year.

COVID vaccine Comirnaty, which Pfizer ( PFE ) makes with German

partner BioNTech, brought in sales of $1.42 billion,

compared with expectations of $870 million, according to

estimates compiled by LSEG.

The third-quarter results encouraged Pfizer ( PFE ) to bump up its

annual revenue expectations for Comirnaty and Paxlovid to $10.5

billion, from its previous forecast of $8.5 billion.

Analysts expect combined sales of about $9 billion from the

COVID products this year.

Pfizer ( PFE ) raised both ends of its 2024 profit forecast range by

30 cents and expects to earn $2.75 to $2.95 per share.

On an adjusted basis, Pfizer ( PFE ) earned $1.06 per share in the third

quarter, compared with analysts' estimates of 62 cents.

Total revenue of $17.70 billion beat estimates of $14.96

billion.

Pfizer ( PFE ) in recent quarters has been beset with disappointing data

for a closely watched experimental obesity drug, a weak launch

of its respiratory syncytial virus (RSV) vaccine, and pulling

its sickle cell disease treatment Oxbryta due to deaths in

clinical trials.

The company said it continues to advance two other potential

obesity treatments in its pipeline as it looks for a piece of a

market some analysts say could reach $150 billion a year in the

next decade.