Pfizer (PFE) stock bounded higher in mid-May on enthusiasm for its potential rival to Novo Nordisk (NVO) and Eli Lilly (LLY) in diabetes treatment and weight loss.
X
Pfizer tested its treatment over 16 weeks in patients with type 2 diabetes. A high dose of the twice-daily pill led to roughly 10 pounds of weight loss. In comparison, patients who received a high dose of Novo’s weekly injection, Ozempic, lost that much over 30 weeks, according to the drug’s Phase 3 study.
But one analyst noted Pfizer has yet to decide whether to send its twice-daily pill into final-phase testing. The company is awaiting the results of a midstage study of a once-a-day pill.
Investors and patients are zeroing in on a series of approved and experimental drugs that lead to weight loss. They mimic a gut hormone that signals to the brain when the stomach is full. They also help increase insulin production in the pancreas, improving blood sugar control.
The segment could be important for Pfizer, which is navigating an expected decline for its Covid vaccine and oral treatment. Sales of both beat expectations in the first quarter, but the company’s outlook for the year suggests both will tumble in 2023.
Pfizer also could be closing in on an RSV vaccine for older adults. Respiratory syncytial virus causes coldlike symptoms in most people, but can be deadly in newborns and older adults. GSK (GSK) has already gained approval for its shot Moderna (MRNA) also hopes to follow suit.
A panel of advisors to the Food and Drug Administration voted unanimously to support the approval of Pfizer’s RSV vaccine for pregnant women. It aims to protect newborns. But just 10 voted in support of the vaccine’s safety.
In other news, Pfizer is acquiring Seagen (SGEN) for $43 billion. Seagen works on cancer treatments known as antibody drug conjugates. These drugs send toxic chemicals directly to tumors in an attempt to limit harm to healthy tissues.
So, all in all, is PFE stock a buy right now?
Pfizer Stock Fundamentals: Earnings Beat, But Slide
During the first quarter, Pfizer earned $1.23 per share, on an adjusted basis, on $18.28 billion in sales. Earnings skidded 24% as sales tumbled 29%. But analysts called for much steeper declines.
One analyst, though, says the beat came on the back of better-than-expected sales of Covid products, the BioNTech (BNTX)-partnered vaccine and oral treatment Paxlovid.
Comirnaty generated $3.06 billion in sales while antiviral pill Paxlovid brought in $4.07 billion. Both topped Wall Street’s expectations. But Comirnaty sales tumbled 77% as demand for Covid vaccines wanes. Paxlovid sales skyrocketed 177%.
But Pfizer’s outlook for the year indicates sales of both will fall in 2023.
Meanwhile, sales of newly acquired products Nurtec and Oxbryta — treatments for migraines and sickle cell disease — missed expectations.
Revenue from one of Pfizer’s most notable drugs, Xeljanz, plunged 36% on an as-reported basis to $237 million. Xeljanz treats immunological conditions, but is facing pressure after the FDA required companies with products in this class to add a new warning label to the prescription.
Sales of Bristol Myers Squibb (BMY)-partnered blood thinner Eliquis climbed 5% to $1.87 billion. But Eliquis will lose exclusivity on the market in the upcoming years.
In the current quarter, analysts call for adjusted Pfizer earnings of 62 cents per share on $13.73 billion in sales. Earnings would plummet 70% and sales would fall 51%.
Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth. Pfizer is not hitting those marks. Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
Pharmaceutical Company’s Annual Metrics
Pfizer’s sales hit a record $100.33 billion in 2022. Top sellers included Comirnaty and Paxlovid, which brought in a respective $37.81 billion and $18.93 billion in sales.
Blood thinner Eliquis brought in $6.48 billion, up 9% on a strict, as-reported basis. Sales of pneumonia vaccine Prevnar climbed 20% to $6.34 billion.
But other key products saw downfalls. Revenue from Xeljanz, which treats inflammatory conditions, tumbled 27% to almost $1.8 billion. Sales of cancer drug Ibrance also fell 6% to $5.12 billion.
For 2023, Pfizer expects adjusted earnings of $3.25-$3.45 per share and $67 billion to $71 billion in sales. At the midpoint, earnings would tumble 49% and sales would fall 31%. Pfizer expects $13.5 billion from Comirnaty and $8 billion from Paxlovid, down a respective 64% and 58%.
Pfizer Stock And Covid News
The company has adapted its original Covid vaccine to include an element targeting newer subvariants of omicron dubbed BA.4 and BA.5.
The updated booster still attempts to block the ancestral Covid strain. That shot is now available as a booster for children age 6 months and older, and as a second dose for people age 65 and older, as well as those with immune-compromising conditions.
But there are a couple of problems here. First, the authorizations were based on laboratory studies and human test data from an earlier iteration of the omicron-blocking booster.
Second, the new booster shot blocks a version of omicron that is now less dominant. According to the Centers for Disease Control and Prevention, a newer subvariant called XBB.1.5 is now dominant in the U.S., accounting for about 64% of cases. BA.4 and BA.5 account for virtually no cases in the U.S.
Pfizer and BioNTech say the updated booster has triggered antibodies against newer omicron iterations, but a study at the University of Texas Medical Branch didn’t find a robust response against the BQ.1.1 strain, according to CNBC. That strain accounts for a fraction of cases and is in decline.
On the antiviral side, Pfizer tested Paxlovid in unvaccinated Covid patients at risk of developing severe disease. It cut down on hospitalizations by 89% when patients started treatment within three days of symptoms beginning. No Paxlovid recipients died.
Pfizer also is working with Clear Creek Bio on another oral antiviral.
Other PFE Stock News
U.S. regulators recently approved Pfizer’s pneumococcal vaccine for infants and children. It attempts to block 20 strains that cause pneumococcal diseases. The most commonly known pneumococcal disease is pneumonia.
In a recent study, Pfizer said a combination of its drug Xtandi and another anti-cancer medicine called leuprolide reduced the risk of cancer spread or death by 58% in men with prostate cancer vs. a placebo and leuprolide. But the news didn’t help Pfizer stock, which has largely declined since December.
The FDA also accepted Pfizer’s application for approval of a combination using drugs Baftovi and Mektovi in patients with a form of lung cancer marked by a genetic mutation. The FDA will make a decision on whether to approve the regimen in the fourth quarter.
In March, the FDA approved a migraine nasal spray from Pfizer called Zavzpret and an FDA panel of independent experts voted in support of Pfizer’s RSV vaccine for older adults. The panel was split, however, with seven in favor of the shot’s effectiveness and safety. Four voted against the vaccine.
Technical Analysis: PFE Stock Hits 50-Day Line
Pfizer stock is trading below its 50-day and 200-day moving averages, according to MarketSmith.com.
Shares are not forming a chart pattern for investors to watch.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a Composite Rating of 74 out of a best-possible 99. The measure weighs a stock’s key growth metrics against all other stocks. Leading stocks tend to have Composite Ratings of 95 or better, according to IBD Digital.
Pfizer stock has a Relative Strength Rating of 24 out of a best-possible 99. The RS Rating measures a stock’s 12-month running performance against all other stocks. That RS Rating means Pfizer stock ranks in the lowest quarter of all stocks in terms of performance over the last year.
The pharmaceutical company’s EPS Rating, a measure of profitability, is an 88 out of a best-possible 99. The EPS Rating compares a stock’s recent and longer-term earnings growth against all other stocks.
So, Is PFE Stock A Buy?
Based on savvy rules of investing, PFE stock isn’t a buy right now. By at least one measure, it was a sell when Pfizer stock dropped below its 50-day line in January. Stocks that fall below that key line often experience downward pressure at that ceiling.
It will be important to keep tabs on how Pfizer stock performs as Covid moves into its endemic phase and as the company expands its pipeline. Investors are closely watching the adult RSV vaccine, which could hit the market at the same time as rivals from GSK and Moderna. The diabetes pill is further behind, but could also be an important contributor for Pfizer.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
YOU MAY ALSO LIKE:
Biotech Stocks To Watch And Pharma Industry News
Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader
IBD Stock Of The Day: See How To Find, Track And Buy The Best Stocks
Watch IBD’s Investing Strategies Show For Actionable Market Insights
Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists
Source link