Pfizer

  • Pfizer, the multinational pharmaceutical and   biotechnology corporation founded in 1849, has hit the headlines with an   announcement that the US Food and Drug Administration (FDA) has granted full   approval for the use of its COVID-19 vaccine. The  drug was previously   only approved for emergency use and  comes as the Delta variant has  spread   not only in the Southern States of  the USA, the Mid West  and Florida, but  also to  regions in SE Asia, Africa and the   Middle East.

  • The decision by the FDA affirms the efficacy and safety of the joint   Pfizer BioNTech vaccine. Pfizer CEO, Albert Bourla stated that only about 60% of eligible, Americans were fully   vaccinated, with infections, hospitalizations and death rates, continuing to   rise among unvaccinated populations in the country.

  • The FDA approval should result in additional sales and profits on an   ongoing basis for Pfizer, with an estimated 80-100 million people still   unvaccinated in the US. There is also a high probability of booster shots   especially for those above a certain age, as well as those with compromised   immune systems.

  • Pfizer has been undergoing significant changes in its business model   over the past few years, having spun off most of its older off-patent   businesses, such as Viagra, focusing on biopharma, with a strong oncology   pipeline of products.

  • The recent $2.3B deal announced by Pfizer to acquire a clinical   early phase immune-oncology company, which focuses on the global escalation   of cancer, is testament to the potential of a new phase in its new strategy.

  • The Pfizer share price, prior to the COVID-19 pandemic   underperformed the S&P500, however since early 2020 its price has risen   from a low of $32 in February 2020 to the current level of $48.50.

  • Wall Street analysts are   expecting 71% revenue growth and 52% EPS growth, resulting in a forward PE of   11x, which is attractive relative to that of the S&P forward PE at around   21x, with good upside prospects well into 2022.

Pfizer