Pfizer grapples with post-Covid hangover as debt and doubts mount
In the private dining room of a San Francisco steakhouse in January, Albert Bourla cut a confident figure. The Pfizer (PFE) chief executive joked with reporters as he fielded questions about his company and the broader pharmaceutical landscape, his mood seemingly untouched by the pressures bearing down on the drugmaker he has led since 2019.
Bourla had his reasons for optimism. Last October, he outmaneuvred rivals to become the first pharmaceutical chief to reach a drug pricing agreement with President Donald Trump. The following month, he prevailed over Novo Nordisk (NVO) in a bruising boardroom battle to acquire a weight-loss biotech, one of the most dramatic deals of 2025.
Yet that confidence belied a more troubling reality. Demand for Covid-19 shots has fallen sharply, with Pfizer reporting that revenues from its conventional Covid vaccine and its jab for high-risk patients had declined 34 per cent and 95 per cent respectively from a year earlier. The company raised its overall 2026 revenue estimate by $500mn but simultaneously cut its Covid vaccine revenue forecast by $1bn, to $4bn.
The erosion of its pandemic windfall has taken a visible toll on the stock. Pfizer is currently valued at $152.5bn — a figure that sits well below biotech rivals Amgen (AMGN), worth $222bn, and Gilead Sciences (GILD) at $165bn. Pfizer shares have gained 7.5 per cent this year, a modest advance compared with the 25.5 per cent and 8.5 per cent recorded by Amgen and Gilead over the same period.
The underwhelming share price performance has emboldened short sellers. Pfizer is now the most heavily shorted pharmaceutical company with a market capitalization above $50bn, according to data from S3.
"The market is really not giving you a vote of confidence with the share price," said Kevin Gade, a portfolio manager at Bahl & Gaynor, an Ohio-based value fund that has not held Pfizer since 2019. "Give them their flowers for the Covid-19 vaccine, but beyond that there's just not a lot to really pinpoint a successful R&D franchise." A second investor was more direct: "They are in a world of hurt."
Compounding investor anxiety is Pfizer's balance sheet. The company is carrying $60.5bn in total outstanding debt — the second-highest figure among large pharmaceutical companies, according to the most recent financial statements. That burden has prompted quiet speculation about the sustainability of the company's dividend, with some investors arguing that a cut would free up capital for bolt-on acquisitions and pipeline replenishment.
Daniel Lyons, a portfolio manager at Janus Henderson, said a dividend reduction "definitely would help to give them more flexibility," adding that for the right deal, a cut could be justified — though it would need to be handled carefully. Bourla, speaking on a call with analysts this week, was categorical: even under "the most stretched" financial scenarios, "we will be able to maintain our dividend," he said.
Acquisitions remain a strategic imperative for Pfizer, as for all large pharmaceutical companies facing the relentless erosion of patent-protected revenues. Its recent deal-making, however, has attracted skepticism. The $10bn acquisition of weight-loss biotech Metsera in 2025 — concluded after a bidding war that saw Pfizer pay as much as $2.7bn above its opening offer to see off Novo Nordisk — left many investors uneasy. Metsera's lead drug is expected to deliver weight-loss comparable to Eli Lilly's (LLY) treatment, but the product is not anticipated to reach the market before 2028, by which point it will face well-entrenched competition from Lilly and Novo Nordisk, as well as other potential challengers.
Bourla has consistently defended the deal, arguing that Metsera's once-monthly formulation will offer greater convenience and superior tolerability relative to existing options. "Monthly is ideal," he said in January. Positive interim data from trials of the monthly injection were reported in June, though analysts remain cautious about its competitive prospects.
Earlier acquisitions have also disappointed. A drug for sickle cell disease, acquired as part of Pfizer's $5bn purchase of Global Blood Therapeutics in 2022, was withdrawn from the market in 2024. Pfizer's $43bn acquisition of oncology specialist Seagen in 2023 — one of the largest pharmaceutical deals on record — has also suffered a setback: one of Seagen's cancer drugs failed a pivotal phase 3 trial this year, an outcome Goldman Sachs described as a "notable pipeline setback."
With conventional M&A activity paused — the company says it has approximately $6bn available for deals — Pfizer has instead looked east. In May, it agreed to pay $650mn upfront to Chinese drugmaker Innovent for rights to 12 early-stage compounds, with milestone payments potentially reaching $10bn. The upfront sum was the largest paid by a US pharmaceutical group to a Chinese counterpart in the first half of the year.
"They are trying to get rights to drugs for cheaper prices, and a lot of that involves going to China," said Karen Andersen, an analyst at Morningstar. "They are trying to bulk up their pipeline with some products that could work well alone or in combination, but doing it at a price that's not hefty upfront."
Andersen argued that the stock has been "overly punished" by investors, pointing to a diversified portfolio that provides meaningful revenue protection even as some development programmes falter. "It's very hard to put really significant pressure on their top line," she said.
Bourla successfully fended off activist pressure from Starboard Value in 2024. But Pfizer's prolonged underperformance may yet reopen questions about his leadership. "Maybe he is not the right guy to lead the company going forward," said Gade.