Pfizer closes site in NJ as it drives $3.5bn cost cuts

After recently launching a $3.5 billion cost cutting program, Pfizer is reportedly shuttering its Peapack, New Jersey plant.  

In October, as a result of possible revenue drops for its COVID-19 vaccine, Pfizer revised its full-year guidance and announced its cost realignment program where the firm said it expects to deliver at least $3.5 billion in savings. The company anticipated $1 billion to be realized this year and $2.5 billion in 2024.

Now, according to a Worker Adjustment and Retraining Notification (WARN) alert from the Garden State, Pfizer is said to be cutting 791 jobs at its 595,000 square-foot Peapack, New Jersey facility by February 2024.

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Various publications, including Forbes, reported the pharmaceutical giant is also planning to close its Kit Creek, Morrisville plant and Durham clinical manufacturing facility in North Carolina as part of its cost realignment efforts. However, BioProcess Insider did not receive confirmation of this.

The firm’s largest North Carolina located facilities in Rocky Mount and Sanford are said to remain open. In July, a tornado damaged the Rocky Mount plant, which produces a quarter of Pfizer’s sterile injectables in the US. The firm remained confident it “will go back to life” but warned of near-term revenue challenges in August.

Decline in COVID-19 vax sales

Pfizer is not alone in the space when it comes to lower COVID-19 vaccine demand.

Life sciences service firm Sartorius laid out its ambitions in the cell and gene therapy (CGT) space in April following the decline of COVID-19 sales, which it explained as a continuation of demand normalization. Additionally, Danaher Corporation, which owns bioprocess peer Cytiva, saw drops as high as 20% in orders coming out of COVID and spoke of destocking issues within the industry. And in June, contract development manufacturing organization (CDMO) Catalent attributed a 32% year-on-year drop in biologics sales in its postponed third quarter to the COVID-cliff and productivity issues.

Pfizer’s Q3 earnings call reported its overall revenue was $13.2 billion compared to $22.6 billion last year.

“Our Q3 results, both top and bottom line, were significantly and negatively impacted by our COVID products,” Dave Denton, chief financial officer, Pfizer told shareholders on the call.

“Revenues declined 41% operationally, the result of the decrease in both Paxlovid and Comirnaty sales, while adjusted diluted loss per share was also significantly impacted by $5.6 billion of non-cash inventory write-offs of COVID related inventories.”

In September, Pfizer said its manufacturing and marketing prowess, driven by COVID-era branding, will keep it ahead in a reinvigorated vaccine market and referenced Abrysvo, a bivalent prefusion F (RSVpreF) vaccine approved for lower respiratory tract disease (LRTD) and severe LRTD due to Respiratory Syncytial Virus (RSV) in the US in May, and in the EU in August as one of the vaccines that will keep it competitive in the space.

This publication contacted Pfizer for comment but did not receive a reply at the time of publishing.