Can Pfizer Reignite Growth Amid COVID Declines and Patent Expirations?

Pfizer PFE faces several near-term challenges like declining COVID sales, the upcoming loss of exclusivity (“LOE”) cliff and U.S. Medicare Part D headwinds. These headwinds can hurt its sales and profits in 2026 and thereafter.

Pfizer expects a significant negative impact on revenues from the LOE in the 2026-2030 period as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi, face patent expirations. The LOE cliff is expected to hurt sales by approximately $1.5 billion in 2026.

Unfavorable impact from the Medicare Part D redesign under the Inflation Reduction Act (IRA) hurt Pfizer’s revenues in 2025. Higher-priced drugs, including Eliquis, Vyndaqel, Ibrance, Xtandi and Xeljanz, are most affected by the IRA. The negative impact is expected to continue in 2026

With the end of the pandemic, sales of Pfizer’s COVID products, Comirnaty and Paxlovid, have declined sharply from their peak in 2022. Sales of Comirnaty declined in 2025 due to a narrow recommendation for COVID vaccines in the United States, while Paxlovid experienced reduced demand from lower infection rates.

In 2026, Pfizer expects its COVID revenues to be around $5 billion, representing a decline from 2025 COVID sales of around $6.7 billion as infection rates are expected to continue to decline.

Due to the above-mentioned headwinds, Pfizer’s guidance for 2026 indicates mostly flat to slightly negative growth, for both earnings and revenues.

To navigate these headwinds, Pfizer is rebuilding its pipeline in oncology and obesity, which it believes can drive growth in 2028 and beyond. Pfizer has been actively acquiring assets to replace lost COVID revenues. It also launched a multi-year cost realignment program to improve margins. Pfizer expects its recently launched and acquired products and a strong pipeline to help revive top-line growth toward the end of the decade.

However, its new and acquired products, though contributing to growth, haven’t yet been able to replace lost revenues from legacy products and the COVID decline.

Competition in the Oncology Space

Pfizer is one of the largest drugmakers of cancer medicines. Other large players in the oncology space are AstraZeneca AZN, Merck MRK, J&J JNJ and Bristol-Myers.

For AstraZeneca, oncology sales now comprise around 44% of total revenues. Sales in its oncology segment rose 14% at constant exchange rate (CER) in 2025. AstraZeneca’s strong oncology performance was driven by medicines such as Tagrisso, Lynparza, Imfinzi, Calquence and Enhertu (in partnership with Daiichi Sankyo).

Merck’s key oncology medicines are PD-L1 inhibitor, Keytruda and PARP inhibitor, Lynparza, which it markets in partnership with AstraZeneca. Keytruda, approved for several types of cancer, alone accounts for more than 50% of Merck’s pharmaceutical sales. Keytruda recorded sales of $31.7 billion in 2025, up 7% year over year.

J&J’s oncology sales now comprise around 27% of its total revenues. Its oncology sales rose 20.9% on an operational basis in 2025 to $25.4 billion. While J&J’s older cancer drugs, multiple myeloma treatment Darzalex and prostate cancer drug Erleada, are key contributors to its top-line growth, new drugs such as Carvykti, Tecvayli, Talvey and Rybrevant, plus Lazcluze, hold the key to long-term growth.

Bristol-Myers’ key cancer drug is PD-L1 inhibitor, Opdivo, which accounts for around 21% of its total revenues. Opdivo’s sales rose 8% to $10 billion in 2025.

PFE’s Price Performance, Valuation and Estimates

Pfizer’s stock has risen 1.4% in the past year compared with an increase of 8.6% for the industry.

From a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its five-year mean. Going by the price/earnings ratio, Pfizer’s shares currently trade at 9.04 forward earnings, significantly lower than 18.22 for the industry as well as the stock’s five-year mean of 10.20.

The Zacks Consensus Estimate for 2026 earnings has declined from $2.99 per share to $2.97, while that for 2027 has been stable at $2.83 per share over the past 60 days.

Pfizer has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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