PFE stock has seen a decline of 20% from levels of $35 in early January 2021 to around $28 in early-November 2024, vs. an increase of about 50% for the S&P 500 over this period.
However, the decrease in PFE stock has been far from consistent. Returns for the stock were 60% in 2021, -13% in 2022, and -44% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 — indicating that PFE underperformed the S&P in 2023.
Pfizer's top line grew 31% y-o-y to $17.7 billion, led by $2.7 billion contribution from Paxlovid sales. Excluding Covid-19 products, total sales were up 14%.
Pfizer's adjusted operating profit of $6.0 billion in Q3 2024 reflected a significant improvement from a loss of $968 million in the prior-year quarter. For the full year 2024, the company expects revenue to be in the range of $61 billion and $64 billion, and its adjusted earnings per share to be in the range of $2.75 and $2.95.
Pfizer, on March 13, 2023, announced that it will acquire Seagen for $43 billion ($229 per share), reflecting a premium of 32% at the closing price of $173 on Friday, March 10, 2023. This acquisition was completed in December 2023. This appears to be a great move for Pfizer, given that it is seeing a significant drop in sales from its Covid-19 products. Also, some of its drugs will lose market exclusivity over the coming years. Seagen's revenues are expected to top $3 billion in 2024, and it has a promising deep oncology pipeline. Seagen's sales are estimated to top $10 billion by 2030.
Pfizer lost more than 28% – dropping from $39 at the beginning of 2020 to around $28 in late March 2020 – then spiked over 2x to around $60 in December 2021, primarily due to its Covid-19 vaccine sales. However, it has declined since then to around $30 now. This can be attributed to a significant decline in its Covid-19 product sales.
Pfizer's Covid-19 pill cuts the risk of hospitalization or death by 89% in high-risk adults who've been exposed to the Covid-19 virus. The company secured regulatory approvals for this pill, and it garnered $19 billion in sales in 2022. The sales for this drug have declined over the last year or so.
Pfizer garnered over $36 billion in Covid-19 vaccine sales in 2021 and $38 billion in 2022, while the Covid-19 vaccine revenue is expected to drop to $13.5 billion in 2023.
Pfizer and its German partner BioNTech currently produce one of the most sought-after Covid-19 vaccines. Pfizer CEO Albert Bourla has said that people who receive Covid-19 vaccines will likely require booster shots within a year and potentially require an annual shot thereafter, much like seasonal flu shots, to protect against the virus as it evolves. However, it doesn't appear to be the case, given a very low demand for the Covid-19 vaccine sales even in the recent quarters.
Pfizer is looking to expand its vaccine business following the pandemic, extending its use of the gene-based mRNA technology, which has proved highly effective in the Covid-19 vaccines.
Previously, the Food & Drug Administration (FDA) did not have a process to grant approvals for biosimilars. However, the recent approval of biosimilars in Europe and the FDA approvals of biosimilars in the U.S. is likely to pave the way for further drugs. Pfizer has received FDA approvals for multiple biosimilars, including ones for blockbuster drugs, Humira, Rituxan, Avastin, and Herceptin, among others. This will likely bolster the company's overall sales growth over the coming years.
GlaxoSmithKline and Pfizer have merged their consumer healthcare divisions in a joint venture. Pfizer owns a 32% stake in the new entity. The deal was closed in 2019, and the new entity commands a share of over 7% in the over-the-counter market.
Key drivers of Pfizer's value that present opportunities for upside or downside to the current Trefis price estimate for Pfizer:
Pfizer is one of the world's biggest pharmaceutical companies in terms of revenue. In October 2009, Pfizer completed the acquisition of pharmaceutical giant Wyeth for $68 billion and went on to acquire Hospira in 2015, which positioned it strongly in the sterile injectables and biosimilars market.
The company reports its results primarily in the following segments: 1. Primary Care, 2. Specialty Care, 3. Oncology, and 4. Pfizer CentreOne.
The biggest contribution to the value of the stock comes from the Primary Care segment, accounting for over 40% of Pfizer's value, in our view.
The 2020 coronavirus crisis impacted pharmaceutical companies on two fronts, 1. supply chain disruptions and 2. direct sales due to the postponement of minor health-related issues and surgeries. While Pfizer saw strong demand for its Covid-19 vaccine, the sales of its other pharmaceutical drugs were impacted in 2020. The Covid-19 products sales also started to decline since 2023.
In the last few years, several drugs have lost patent exclusivity. This has impacted not only Pfizer, but the pharmaceutical industry as a whole. As a result, Pfizer and other firms will need to focus on growing areas of immunology and oncology.
The fast-growing pharma market in emerging economies, referred to as the 'Pharmerging' economies, has the capability and technical prowess to manufacture generic versions of blockbuster drugs. These generic drugs are often sold at prices that are substantially cheaper than their branded counterparts, thereby severely affecting big pharma's ability to generate profits in the long run.
Governments around the world are trying to rein in fiscal spending in order to manage their budget deficits. Since healthcare costs are one of the biggest components of any national budget, it is obvious that increased healthcare legislation and reforms around the world will hurt revenues for the entire pharmaceutical sector.
