Pfizer Inc (Pfizer Stock) has presented its most in-depth explanation regarding how the pharmaceutical giant can continue to increase revenue in the coming years, even though patent expirations will cost the company $17 billion by 2030.
Despite the tremendous revenue boost the business earned from its Covid-19 vaccine and antiviral, Pfizer stock (NYSE:PFE) has traded at a discount to peers for years because of fears about the so-called patent cliff.
According to FactSet, shares are trading at 10.5 times the expected earnings over the next 12 months. This is a significantly lower multiple than that of competitors such as Johnson & Johnson, which trades at 17.2 times earnings, and Eli Lilly, which trades at 40.4 times earnings.
Pfizer’s Chief Executive Officer, Albert Bourla, revealed a strategy to replace the 17 billion dollars in yearly income expected to be lost by the decade’s end. He indicated that the corporation would gain $25 billion in annual revenue through business development and another $20 billion through products in the company’s internal pipeline that were slated to be launched soon.
On Monday, the business provided specifics regarding the sources from which it anticipates receiving those revenues. Pfizer anticipates that its messenger RNA vaccines will bring in between $10 billion and $15 billion in annual revenue by 2030. By that time, the company’s portfolio may include:
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- A vaccine against the flu.
- A combination vaccine against the flu and Covid-19.
- A vaccine against shingles.
Pfizer also stated that a treatment it is currently working on to treat obesity and type 2 diabetes, which belongs to the same family of medications as Lilly’s highly-touted Mounjaro, has the potential to reach annual sales of at least $10 billion when it reaches its full potential. Pfizer’s entry has the benefit of being a pill, whereas Lilly and Novo Nordisk’s (NVO) alternatives are injections.
Pfizer Stock Price
By Tuesday morning, the presentation had begun to influence the thinking of Wall Street regarding the company, at least to some degree. Pfizer shares rose by 3% on Tuesday. At the same time, analysts at Goldman Sachs raised their recommendation for the company’s stock to Buy from Neutral and raised their price objective for the stock to $60 from $47. On Monday, Pfizer stock finished trading at $52.16.
Following the presentation given by Pfizer Chief Financial Officer David Denton, SVB Securities analyst David Risinger wrote in a note that was released early on Tuesday that he anticipates analysts will increase their long-term pipeline projections for Pfizer; however, he cautioned that cost estimates could also rise as a result of David Denton’s comments. Pfizer is given a rating of Market Perform from Risinger, and the price objective is $49.
Pfizer stated in its presentation that it anticipates peak sales of more than $6 billion worldwide for the migraine medications it purchased from Biohaven due to the transaction between the two companies (BHVN). Pfizer paid $11.6 billion for Biohaven. After the acquisition, Biohaven’s non-migraine businesses were split off into a new firm named Biohaven.
According to the company, sales of their respiratory syncytial virus vaccine will reach more than $2 billion annually in 2027. This vaccine will likely launch for older adults and expectant mothers the following year. It will compete directly with GSK’s older adults’ RSV vaccine. GSK has stated that their vaccine will be available first.
In addition, Pfizer stated that the global revenue of its medicine Etrasimod as a treatment for ulcerative colitis may be between $1 billion and $2 billion per year and that the annual revenue of its drug Ritlecitinib for alopecia areata might reach $1 billion.
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