(Bloomberg) -- The best news Pfizer Inc. had for investors Tuesday was that its fourth-quarter earnings report contained less bad news than most of 2023’s. 

The US returned just 6.5 million doses last year of the Covid-19 treatment, Paxlovid, about 1.4 million fewer than expected. Adjusted earnings were 10 cents a share, Pfizer said, while Wall Street had expected a 19-cent loss. 

The shares dropped as much as 1.9% at 11 a.m. in New York. They’ve lost 6.2% since the year started. 

Shareholders are tiring of negatives after Pfizer cut its guidance twice last year on falling sales of Covid products. Now the Street is looking to Chief Executive Officer Albert Bourla to lead a transition to cancer, spearheaded by the $43 billion purchase of Seagen Inc., a maker of targeted treatments that are among the most sought-after in the business. 

The December acquisition along with questions about Pfizer’s underlying growth prospects are raising the focus on the oncology event the company has scheduled for Feb. 29, Bloomberg Intelligence analyst John Murphy said in an email. Whether Pfizer can hit its downsized outlook for Covid product sales won’t be known for many months, he said. 

Impairment Charges

There was a smattering of new charges on Pfizer’s tab. The Prevnar vaccine for pneumococcal disease — one of the drugmaker’s best-selling products — missed quarterly sales estimates by about $400 million, and the company recorded a $1 billion impairment related to a transition to newer versions of the shot. The drugmaker also said it would take a $1.4 billion charge on an ulcerative colitis drug gained in the 2022 purchase of Arena Pharmaceuticals due to changes in development plans. 

Pfizer was able to point to some relatively good news on Paxlovid. The US became a major customer for the drug, providing it to the public for free after its authorization in December 2021. But starting this year, the company will sell the medication directly to privately insured patients with prices to be negotiated with payers. 

The treatment courses are being returned by the government to facilitate that process. Taking back the doses resulted in quarterly negative sales of the drug of $3.1 billion, Pfizer said. The revenue reversal cut adjusted earnings by about 54 cents a share, Chief Financial Officer David Denton said on a call with investors.   

Reaffirms Outlook

Overall fourth-quarter sales of $14.2 billion narrowly missed the average estimate of $14.4 billion. According to generally accepted accounting principles, the company’s quarterly revenue declined 41% from the previous year, with a net loss for the quarter of $3.37 billion. 

Pfizer reaffirmed its financial outlook for 2024 that was given in December, when the shares tumbled to their lowest level in a decade. Looking ahead, Pfizer said it will focus on commercial execution to maximize performance of newly launched and acquired medicines.

Read More: Pfizer Falls to Lowest in 10 Years on Disappointing Forecast

“We continue to believe that the company’s 2024 EPS guidance is achievable, if not conservative,” Edward D. Jones & Co. analyst John Boylan said in a note. “However, considering the unpredictability of Pfizer’s performance last year, the company will likely have to put together a string of good quarters to regain investor credibility.”

--With assistance from Tom Contiliano and Fiona Rutherford.

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