Now is the time to buy Pfizer shares?


Investors were in a frenzy Monday morning after Pfizer (NYSE: PFE) announced the first positive results of a potential vaccine against the coronavirus which he is studying in partnership with BioNTech in a phase 1/2 trial held in Germany. Pfizer is collaborating with BioNTech on four potential vaccines in a program called BNT162, which includes one of its most advanced candidates, BNT162b1.

Preliminary data from the German study revealed that subjects exhibited varying degrees of CD4-positive T cell responses to BNT162b1, while 29 of 36 participants had CD8-positive T cell responses to the receptor binding domain of the SARS-CoV-2. (CD4 and CD8 are both types of white blood cells; the former are at the forefront of fighting infections in your body, while the latter can be fatal to cancer cells and other attackers.) Pfizer shares rose nearly 4% at the start. morning trading hours of July 20.

Pfizer is certainly not the only cook in the kitchen vying for the coronavirus vaccine race. AstraZeneca (NYSE: AZN) also reported on Monday that its coronavirus vaccine candidate with the University of Oxford had produced a positive immune response in subjects in early-stage human trials. Companies like Inovio Pharmaceuticals (NASDAQ: INO), Modern (NASDAQ: ARNM), and Novavax (NASDAQ: NVAX) are just a few examples of other industry giants clashing with Pfizer to bring an effective vaccine to market.

If you’re one of the many investors following the progress of Pfizer’s coronavirus vaccine, you might be wondering if now is the time to buy. You may also be wondering if this is still too risky given the uncertainty about the effectiveness of a potential vaccine in late stage trials. Here is what you need to know before buying shares of this pharmaceutical stock.

Image source: Getty Images.

Race to the Finish Line – A Timeline of Pfizer’s Coronavirus Vaccination Efforts

Pfizer first announced its collaboration with BioNTech on a coronavirus vaccine on March 17. Pfizer’s research, production, manufacturing and regulatory prowess form an ideal marriage with BioNTech’s proprietary mRNA vaccine platform. Pfizer has agreed to issue up to $ 748 million in payments, and BioNTech will reimburse Pfizer for half of the costs associated with developing the vaccine, if and when it hits the market.

Investors were elated when Pfizer announced on April 22 that the companies had received the green light from German regulators to launch a Phase 1/2 clinical trial of four vaccine candidates derived from BioNTech’s stable mRNA. The dosing step would include 200 participants aged 18 to 55 to receive between 1 and 100 micrograms of the candidate vaccines.

The company outlined some key goals for the Phase 1/2 trial. The first was to monitor the immune responses that the four potential vaccines elicited in the participants. Another was to assess how participants responded to different doses of the three vaccine candidates. A week later, on April 29, Pfizer and BioNTech announced the dosing of their initial cohort of participants in the Phase 1/2 study in Germany.

The first participants in the Phase 1/2 clinical trial of Pfizer and BioNTech in the United States were tested on May 5. The US study of the four vaccine candidates included 360 participants, with a group of subjects aged 18 to 55 and a second group of subjects between 65 and 85 years. Just a few weeks ago, on July 1, Pfizer released positive preliminary data from the U.S. Phase 1/2 study, which is still ongoing. The study found that subjects generated antibodies to the coronavirus after receiving just two doses of BNT162b1.

The potential effectiveness of BNT162b1 was further illustrated in the first data from the German phase 1/2 Pfizer study published on July 20. Pfizer and BioNTech intend to use the initial results from the two Phase 1/2 clinical trials, along with other data, to identify the correct doses for an upcoming Phase 2b / 3 trial. The companies will also use these information to determine which of the four candidate vaccines should proceed to the advanced clinical study.

So far, the two main candidates for the collaboration are BNT162b1 and another investigational mRNA vaccine, BNT162b2, both of which received fast track designation from the U.S. Food and Drug Administration (FDA) on July 13. . The planned clinical phase 2b / 3 The study, which could start before the end of the month, will be significantly larger than either of the phase 1/2 trials and will include up to 30,000 subjects worldwide . Assuming all goes well, Pfizer and BioNTech hope to have up to 100 million doses of the vaccine on the market by the new year, and possibly over 1.3 billion doses by the end of next year. . On July 20, the companies also announced an agreement with the UK to provide up to 30 million doses of a coronavirus vaccine between 2020 and 2021, if a vaccine is approved.

In a July 8 interview with TIME, Albert Bourla, CEO of Pfizer, said he was convinced that FDA approval of the vaccine could be obtained as early as this fall. According to Bourla, Pfizer plans to start manufacturing a vaccine before getting the FDA green light, an unusual and potentially risky move.

The pandemic and Pfizer’s record

Pfizer’s roughly 4% yield and its consistent history of increasing its dividend on an annual basis have made it popular with some growth investors. In 2019, Pfizer’s revenue reached $ 51.8 billion and the company merged its consumer health division with GlaxoSmithKlineof (NYSE: GSK) consumer segment last year. If you factor in this merger, annual revenue has decreased by 1%. Otherwise, Pfizer actually saw 2% revenue growth in 2019. Its biopharmaceuticals division experienced 8% operational growth in 2019, mainly due to drugs like the psoriatic arthritis drug Xeljanz and the anticoagulant Eliquis.

In the first quarter of 2020, the company achieved revenue of $ 12 billion, a reduction of 7% from its reported revenue in the first quarter of 2019. However, when you remove the effects From the consumer health division of Pfizer’s first quarter balance sheet, that operational decline is only 1%. Pfizer said the pandemic had actually increased its toll by around $ 150 million, largely due to increased demand for Eliquis. Eliquis’ worldwide sales increased operationally by 29% in the first quarter.

Another notable source of first-quarter revenue is sales of the cardiomyopathy drugs Vyndaqel and Vyndamax, whose combined global sales increased 156% in Q1, totaling $ 231 million. The turnover of the biopharmaceutical division also saw an operational peak of 12% in the first quarter of the year. The company reaffirmed that its expected 2020 revenue will be between $ 48.5 billion and $ 50.5 billion, which is also good news for investors. The company plans to complete the merger of its Upjohn subsidiary with Mylan (NASDAQ: MYL) later this year, which should help Pfizer grow.

To buy or not to buy?

An effective vaccine would clearly have a huge impact on Pfizer’s future growth. As encouraging as it is positive is the first data from the company’s ongoing vaccine trials, investors should refrain from putting all their hopes in Pfizer’s potential to win the coronavirus vaccine race.

However, investors should have a much better idea of ​​the outlook for Pfizer’s vaccines over the next few months, once results begin to emerge from the larger Phase 2b / 3 trial. For now, Pfizer’s robust dividend and substantial portfolio are two good reasons to buy and hold this stock.


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