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Pfizer (PFE) to Ride on COVID Jab & Pill in 2022: What Next?
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Pfizer’s (PFE - Free Report) chief executive officer (CEO), Albert Bourla, on the fourth-quarter conference call held last week, said that 2021 was a “watershed year” for the company. Its ranking among large biopharma companies in the PatientView Global Survey rose from the fourth position to the second position mainly because of its efforts in leading the fight against COVID-19.
We believe that no company is as strongly placed in the COVID vaccines/treatment market as Pfizer right now.
Pfizer and its Germany-based partner BioNTech (BNTX - Free Report) have successfully developed Comirnaty, a vaccine for COVID-19 in record time, which is now approved for emergency/temporary use in several countries worldwide and fully approved in the United States. In 2021, Pfizer manufactured more than 3 billion doses of Comirnaty. It expects to manufacture 4 billion doses by the end of 2022.
Its COVID-19 vaccine has become a key contributor to the top line. The vaccine contributed almost $37 billion of Pfizer’s sales in 2021, a little less than half of its total revenues of $81.2 billion in the year.
In the past year, Pfizer’s stock has risen 48.6% compared with an increase of 18.5% for the industry.
Image Source: Zacks Investment Research
Pfizer and BioNTech’s vaccine was approved for younger patients (5-17 years) while a booster vaccine dose was also approved in the United States in 2021. The companies are also working on a new Omicron-based vaccine candidate and a bivalent COVID-19 vaccine candidate. Pfizer and BioNTech’s market share of Comirnaty vaccine continues to grow, representing 70% of all doses distributed across the United States and EU (as of Feb 5, 2022).
Meanwhile, Pfizer’s promising oral antiviral pill for COVID-19, Paxlovid was approved in the United States in December 2021 and has already received emergency or conditional authorization for use with certain populations in approximately 40 countries. Pfizer expects to manufacture up to 120 million treatment courses of Paxlovid by the end of 2022. Paxlovid is expected to generate $22 billion in sales in 2022.
Pfizer expects to generate a combined $54 billion in sales from the COVID-19 vaccine and Paxlovid in 2022 out of its total revenue expectations of around $100 billion.
Undoubtedly, Pfizer’s COVID-related products will be its key top-line drivers in 2022. However, concerns remain about its long-term growth drivers beyond its COVID-related products due to competitive pressure.
Excluding revenues from Comirnaty and Paxlovid, Pfizer’s sales declined 2% operationally in the fourth quarter of 2021, which is lower than the mid-to-high single-digit growth seen in the past three quarters of 2021. Also, excluding COVID-related revenues, total revenues in 2022 are expected to be around $46 billion, representing operational growth of 5%, which is slightly less than Pfizer’s long-term guidance of at least 6% CAGR through 2025.
Sales of some key products in Pfizer’s portfolio, Prevnar and Ibrance, have softened recently. An increase in the proportion of patients using Pfizer’s Patient Assistance Program (provides Ibrance free of charge to certain low-income patients) due to COVID-related economic hardships in the United States has been hurting the drug’s sales since the past couple of quarters. Sales growth was flat in 2021.
Prevnar vaccine sales also declined 11% in 2021 due to the ongoing prioritization of primary and booster vaccination campaigns for COVID-19 and lower international sales.
However, significant revenues from COVID-related products are strengthening Pfizer’s balance sheet and cash flows, which will allow it to pursue new business development opportunities that can add at least $25 billion of risk-adjusted revenues to 2030 top-line growth. Of late, Pfizer has been investing in mRNA technology and collaborations. It is a versatile technology with potential application across many infectious diseases, cancer, rare genetic disorders and even autoimmune diseases. In 2021, Pfizer signed a new collaboration with BioNTech to develop an mRNA-based vaccine for the prevention of shingles, a painful and disfiguring disease. Clinical studies on the mRNA-based shingles vaccine are expected to begin in the second half of 2022.
Pfizer also signed an exclusive four-year research collaboration with gene editing company, Beam Therapeutics (BEAM - Free Report) to develop in-vivo base editing therapies for three targets for rare genetic diseases of the liver, muscle and central nervous system.
The potentially transformative base-editing therapies will be developed by leveraging Beam Therapeutics’ proprietary in vivo messenger RNA (mRNA) and lipid nanoparticles (LNP) delivery technologies for indications with critical unmet needs.
Pfizer entered into a development and option agreement with private company Acuitas Therapeutics. As part of the agreement, it will have the option to license Acuitas’ LNP technology for up to 10 targets for mRNA-based vaccine or therapeutic development.
Finally, Pfizer boasts a sustainable pipeline with multiple late-stage programs that can drive long-term growth.
Another stock with the same Zacks Rank is GlaxoSmithKline (GSK - Free Report) .
Glaxo’s stock has risen 27.2% in the past year. Estimates for Glaxo’s 2022 earnings have gone up from $3.25 to $3.29 over the past 60 days.
Glaxo’s earnings performance has been rather strong with the company beating earnings expectations in three of the last four quarters while meeting estimates in one. Glaxo has a four-quarter earnings surprise of 20.52%, on average.
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Pfizer (PFE) to Ride on COVID Jab & Pill in 2022: What Next?
Pfizer’s (PFE - Free Report) chief executive officer (CEO), Albert Bourla, on the fourth-quarter conference call held last week, said that 2021 was a “watershed year” for the company. Its ranking among large biopharma companies in the PatientView Global Survey rose from the fourth position to the second position mainly because of its efforts in leading the fight against COVID-19.
We believe that no company is as strongly placed in the COVID vaccines/treatment market as Pfizer right now.
Pfizer and its Germany-based partner BioNTech (BNTX - Free Report) have successfully developed Comirnaty, a vaccine for COVID-19 in record time, which is now approved for emergency/temporary use in several countries worldwide and fully approved in the United States. In 2021, Pfizer manufactured more than 3 billion doses of Comirnaty. It expects to manufacture 4 billion doses by the end of 2022.
Its COVID-19 vaccine has become a key contributor to the top line. The vaccine contributed almost $37 billion of Pfizer’s sales in 2021, a little less than half of its total revenues of $81.2 billion in the year.
In the past year, Pfizer’s stock has risen 48.6% compared with an increase of 18.5% for the industry.
Pfizer and BioNTech’s vaccine was approved for younger patients (5-17 years) while a booster vaccine dose was also approved in the United States in 2021. The companies are also working on a new Omicron-based vaccine candidate and a bivalent COVID-19 vaccine candidate. Pfizer and BioNTech’s market share of Comirnaty vaccine continues to grow, representing 70% of all doses distributed across the United States and EU (as of Feb 5, 2022).
Meanwhile, Pfizer’s promising oral antiviral pill for COVID-19, Paxlovid was approved in the United States in December 2021 and has already received emergency or conditional authorization for use with certain populations in approximately 40 countries. Pfizer expects to manufacture up to 120 million treatment courses of Paxlovid by the end of 2022. Paxlovid is expected to generate $22 billion in sales in 2022.
Pfizer expects to generate a combined $54 billion in sales from the COVID-19 vaccine and Paxlovid in 2022 out of its total revenue expectations of around $100 billion.
Undoubtedly, Pfizer’s COVID-related products will be its key top-line drivers in 2022. However, concerns remain about its long-term growth drivers beyond its COVID-related products due to competitive pressure.
Excluding revenues from Comirnaty and Paxlovid, Pfizer’s sales declined 2% operationally in the fourth quarter of 2021, which is lower than the mid-to-high single-digit growth seen in the past three quarters of 2021. Also, excluding COVID-related revenues, total revenues in 2022 are expected to be around $46 billion, representing operational growth of 5%, which is slightly less than Pfizer’s long-term guidance of at least 6% CAGR through 2025.
Sales of some key products in Pfizer’s portfolio, Prevnar and Ibrance, have softened recently. An increase in the proportion of patients using Pfizer’s Patient Assistance Program (provides Ibrance free of charge to certain low-income patients) due to COVID-related economic hardships in the United States has been hurting the drug’s sales since the past couple of quarters. Sales growth was flat in 2021.
Prevnar vaccine sales also declined 11% in 2021 due to the ongoing prioritization of primary and booster vaccination campaigns for COVID-19 and lower international sales.
However, significant revenues from COVID-related products are strengthening Pfizer’s balance sheet and cash flows, which will allow it to pursue new business development opportunities that can add at least $25 billion of risk-adjusted revenues to 2030 top-line growth. Of late, Pfizer has been investing in mRNA technology and collaborations. It is a versatile technology with potential application across many infectious diseases, cancer, rare genetic disorders and even autoimmune diseases. In 2021, Pfizer signed a new collaboration with BioNTech to develop an mRNA-based vaccine for the prevention of shingles, a painful and disfiguring disease. Clinical studies on the mRNA-based shingles vaccine are expected to begin in the second half of 2022.
Pfizer also signed an exclusive four-year research collaboration with gene editing company, Beam Therapeutics (BEAM - Free Report) to develop in-vivo base editing therapies for three targets for rare genetic diseases of the liver, muscle and central nervous system.
The potentially transformative base-editing therapies will be developed by leveraging Beam Therapeutics’ proprietary in vivo messenger RNA (mRNA) and lipid nanoparticles (LNP) delivery technologies for indications with critical unmet needs.
Pfizer entered into a development and option agreement with private company Acuitas Therapeutics. As part of the agreement, it will have the option to license Acuitas’ LNP technology for up to 10 targets for mRNA-based vaccine or therapeutic development.
Finally, Pfizer boasts a sustainable pipeline with multiple late-stage programs that can drive long-term growth.
Zacks Rank & Stocks to Consider
Pfizer currently has a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pfizer Inc. Price, Consensus and EPS Surprise
Pfizer Inc. price-consensus-eps-surprise-chart | Pfizer Inc. Quote
Another stock with the same Zacks Rank is GlaxoSmithKline (GSK - Free Report) .
Glaxo’s stock has risen 27.2% in the past year. Estimates for Glaxo’s 2022 earnings have gone up from $3.25 to $3.29 over the past 60 days.
Glaxo’s earnings performance has been rather strong with the company beating earnings expectations in three of the last four quarters while meeting estimates in one. Glaxo has a four-quarter earnings surprise of 20.52%, on average.