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Here's Why Pfizer (PFE) Has Been Rallying This Year So Far

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Pfizer’s (PFE - Free Report) stock has risen 5.8% this year so far. Though the increase is slightly less than an increase of 6.6% for the industry, it marks a turnaround from a decline of 5.9% in 2020.

 

 

Here we discuss the reasons for the same.

A Successful COVID-19 Vaccine

Pfizer has been riding high on the success of its two-shot vaccine for COVID-19, BNT162b2/Comirnaty, which it has developed in partnership with Germany-basedcompany, BioNTech (BNTX - Free Report) . The vaccine was developed in record time and is now approved for emergency/temporary use in individuals 16 years of age and older in 91 countries worldwide. As of May 3, 2021, Pfizer/BioNTech had shipped approximately 430 million doses of the vaccine to 91 countries, bringing in significant revenues for BioNTech and Pfizer. In the United States, the companies have delivered more than 170 million doses. In the first quarter of 2021, the vaccine contributed $3.5 billion to Pfizer’s global sales.

In early May, the FDA expanded BNT162b2’s Emergency Use Authorization (EUA) to allow vaccinating adolescents aged 12-15 years old. Meanwhile, studies are ongoing to expand the authorization of BNT162b2 to additional population groups like pregnant women and younger children. The companies are also evaluating a potential booster dose and an updated version of the vaccine.

Meanwhile, Pfizer has also initiated a phase I study on its investigational, novel oral antiviral therapeutic, PF-07321332, to treat COVID-19.

Strong First-Quarter Results

Pfizer’s first-quarter results were better than expected as it beat estimates for both earnings and sales. While earnings rose 47%, revenues rose 45% from the year-ago quarter mainly driven by sales of BNT162b2. Importantly, excluding the COVID-19 vaccine, Pfizer’s core drug business also delivered strong growth in the first quarter. Excluding revenues from BNT162b2, sales grew 8% operationally, in line with the company’s goal of delivering at least 6% compound annual growth rate through 2025. Drugs like Eliquis, Vyndaqel/Vyndamax, Inlyta, Xtandi and Xeljanz are driving sales.

Pfizer raised its financial outlook for 2021, increasing revenue expectations from BNT162b2, which partly offset expectations of higher R&D costs for the development of COVID-19 vaccines and antiviral medicines as well as other mRNA-based programs

Pfizer expects continued recovery from the pandemic throughout the year as a larger section of the population gets vaccinated against COVID-19.

Strong Pipeline and Collaboration Deals

Pfizer boasts a sustainable pipeline with multiple late-stage programs that can drive growth. Regulatory applications for some of its pipeline candidates are under review including abrocitinib, its JAK selective inhibitor for atomic dermatitis, its 20-valent pneumococcal conjugate vaccine, somatrogon to treat children with growth hormone deficiency and relugolix combination tablet for uterine fibroids. FDA decisions for all these applications are expected this year, which, if approved, could bring in more new products for the company. Please note that Pfizer is developing the relugolix combination tablet under a collaboration agreement with Myovant Sciences , per a deal signed this year. Incidentally, the FDA approved Pfizer/Myovant’s relugolix combination tablet for heavy menstrual bleeding associated with uterine fibroids on May 26.

Conclusion

Pfizer’s Consumer Healthcare joint venture with Glaxo and the merger of Upjohn unit with Mylan has made Pfizer a smaller company with a diversified portfolio of innovative drugs and vaccines. The smaller Pfizer is expected to see better revenue growth.  Pfizer completed the transaction to divest its Upjohn Business and combine it with Mylan N.V. to form Viatris (VTRS - Free Report) in November last year.

The stock is expected to continue to do well driven by strong growth of key brands like Ibrance, Inlyta and Eliquis, revenue contribution from its COVID-19 vaccine candidate and regular positive pipeline and regulatory updates.

Pfizer currently 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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