Author: ALLISON GATLIN
Source
Pfizer stock jumped in early December after the Food and Drug Administration gave its adult respiratory syncytial virus vaccine a priority review.
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The priority review means the FDA could approve the adult RSV shot in May. Cases of the respiratory illness have been on the rise, impacting infants and the elderly. Pfizer (PFE) is developing vaccines for people age 60 and older and for pregnant women in an attempt to immunize newborns.
Also this month, Pfizer announced a collaboration with Clear Creek Bio to develop a new antiviral pill to treat Covid. Further, Pfizer and BioNTech (BNTX) asked the FDA to sign off on their Covid booster shot for children under age 5. This would be the last group allowed to receive the updated shot, which aims to protect against the original virus as well as the BA.4 and BA.5 strains.
But the benefits for younger people are still unclear. The companies recently compared their first booster and the updated one. The updated shot led to a fourfold increase in antibodies capable of handling the BA.4 and BA.5 sub-variants of omicron in people age 55 and older. Pfizer and BioNTech didn’t offer the same comparison for younger people, however.
Last month, Pfizer posted a beat-and-raise earnings report. The company also raised its guidance for the Covid vaccine called Comirnaty by $2 billion to $34 billion, and reiterated expectations for $22 billion from antiviral pill Paxlovid.
Recently, Pfizer finished acquiring sickle cell drug maker Global Blood Therapeutics and migraine assets from Biohaven Pharmaceutical (BHVN). In the June quarter, sales of GBT’s Oxbryta grew by half year over year. Pfizer expects GBT and its pipeline to add $3 billion in peak worldwide sales.
The deal adds to Pfizer’s rare diseases business. September-quarter sales from that division brought in 15% of Pfizer’s total revenue. Its biggest drug in that unit, Vyndaqel, is likely to face competition from Alnylam Pharmaceuticals (ALNY) in the near future.
Pfizer invested $25 million in Akero Therapeutics (AKRO). Akero is studying treatments for nonalcoholic steatohepatitis, a form of fatty liver disease. Pfizer also has partnerships with Roivant Sciences (ROIV) in autoimmune diseases and ulcerative colitis.
So, all in all, is PFE stock a buy right now?
Pfizer Stock Fundamentals: Earnings Strong
In the third quarter, Pfizer’s adjusted earnings soared 40% to $1.78 per share and were well above forecasts. Sales fell 6% to $22.64 billion, but also beat expectations. Comirnaty and Paxlovid brought in a combined $11.92 billion in sales.
Sales of blood thinner Eliquis and pneumonia vaccine Prevnar climbed a respective 9% and 11%. But revenue from cancer treatment Ibrance fell 7% to $1.28 billion.
Overall, total third-quarter growth didn’t line up with CAN SLIM rules for investing. Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth. Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
Sales are expected to rise almost 2% to $24.32 billion in the fourth quarter. Analysts polled by FactSet also call for adjusted earnings of $1.07 per share, down a penny year over year.
Pharmaceutical Company’s Annual Metrics
Pfizer’s sales popped 95% to $81.29 billion in 2021. Top sellers included vaccines and its cancer treatment business. Overall, vaccine sales were $42.63 billion. Comirnaty brought in 86% of that. Cancer treatments generated $12.33 billion, up 13%.
But Pfizer’s inflammation and immunology sales fell 3% to $4.43 billion. Revenue from Enbrel, an Amgen (AMGN)-partnered treatment for inflammatory conditions, tumbled 12% to $1.19 billion.
For 2022, analysts surveyed by FactSet call for Pfizer to report earnings of $6.48 a share, minus some items, up 47%. Analysts call for sales to pop 23.5% to $100.34 billion.
Pfizer expects $99.5 billion to $102 billion in sales and adjusted earnings of $6.40-$6.50 a share. That includes $34 billion from Comirnaty and $22 billion from Paxlovid.
Pfizer Stock And Covid News
As the only company with a Covid shot and treatment, Pfizer stock is closely tied to the pandemic.
The FDA signed off on Covid shots for children 5 and younger. But they noted some issues. Two doses of the vaccine led to little benefit, meaning parents will have to follow through with all three shots to reach maximum protection.
The company said three doses of its Covid vaccine proved 73.2% effective in children age 6 months to under 4 years old. Each dose is one-tenth the size given to adults. The majority of the cases among vaccine recipients were caused by the BA.2 sub-variant of omicron.
Moderna‘s (MRNA) two-dose regimen, on the other hand, is one-quarter the dosage of its adult shot. In the final analysis, the regimen was 37%-51% effective.
Both companies also have FDA permission to offer second booster shots to people age 50 and older, as well as some immunocompromised people. There are also first boosters available for children as young as 5. The FDA has also signed off on the omicron-specific booster for people age 5 and up. It’s now looking at Pfizer’s application for the omicron-blocking booster in children under age 5.
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.
The results were better than Merck (MRK) and Ridgeback Biotherapeutics’ rival pill, molnupiravir, which reduced hospitalizations by 30%. One molnupiravir patient died.
Pfizer also is working with Clear Creek Bio on another oral antiviral.
Other PFE Stock News
Pfizer recently began a Phase 3 study of its messenger RNA-based flu shot. The study will enroll 25,000 adults in the U.S. The messenger RNA, or mRNA, platform is the same technology behind its Covid vaccine.
Pfizer also said its RSV vaccine was almost 86% effective in older adults. Like Pfizer’s updated Covid vaccine, the RSV shot is bivalent. This means it can target two strains of the virus. Its maternal vaccine was also 81.8% effective in the first 90 days of a newborn’s life.
Pfizer and its partner, Myovant Sciences (MYOV), gained U.S. approval for Myfembree as a once-daily pill for moderate to severe endometriosis. In the final test, the drug cut menstrual pain while reducing average bone mineral density loss by less than 1%.
But Pfizer recently terminated a study of an experimental cardiomyopathy drug. An interim analysis suggested the drug was unlikely to meet its goals in the Phase 3 study.
Pfizer is also working to expand beyond Covid with mRNA technology. It has a gene-editing deal with Beam Therapeutics (BEAM), and deals with Codex DNA (DNAY) and privately held Acuitas Therapeutics to its bolster mRNA efforts.
Technical Analysis: PFE Stock Eyes Buy Point
Pfizer stock is now trading above its 200-day and 50-day moving lines, according to MarketSmith.com.
Shares are now consolidating with a buy point at 61.81.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a Composite Rating of 90 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 also has a Relative Strength Rating of 77 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 top one-quarter of all stocks in terms of performance over the last year.
The pharmaceutical company’s EPS Rating, a measure of profitability, is a 93 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 CAN SLIM rules of investing, PFE stock isn’t a buy right now. Shares are above their key moving averages, but haven’t broken out of a new consolidation.
Further, the company isn’t expected to line up with CAN SLIM advice in the fourth quarter.
It’s important to keep tabs on how Pfizer stock performs as Covid moves into its endemic phase.
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.
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