Pfizer stock is consolidating as the company faces a myriad of moving parts for its BioNTech (BNTX)-partnered Covid vaccine.
In July, German biotech CureVac sued BioNTech, saying the Covid vaccine violates its intellectual property. The company is seeking fair compensation from BioNTech and two subsidiaries, though it makes no mention of whether it expects Pfizer (PFE) to pony up.
Meanwhile, the Food and Drug Administration asked Covid vaccine makers to update their boosters to target the B.A.4 and B.A.5 sub-variants of omicron. The companies say they could launch those updated shots in October. So far, they have only tested boosters that target B.A.1, an earlier version of omicron that lost out in the dominance battle to B.A.4 and B.A.5.
The companies are also working to vaccinate children younger than 5. Last month, the FDA signed off on Pfizer and BioNTech’s Covid vaccine for children age 6 months to under 5 years old. The agency also allowed Moderna‘s (MRNA) shot for children 6 months to under 6 years old. Pfizer’s vaccine requires three shots, while Moderna’s needs only two.
The news has been more mixed for Pfizer’s antiviral Covid pill, Paxlovid. The pill didn’t lead to a statistically significant improvement in hospitalizations and deaths for vaccinated patients with a normal risk of severe Covid.
Pfizer just invested $25 million in Akero Therapeutics (AKRO), which is testing treatments for nonalcoholic steatohepatitis, a form of fatty liver disease. The company also wrapped its acquisition of ReViral, adding onto its efforts to target a respiratory virus. Pfizer is also working to acquire Biohaven Pharmaceuticals (BHVN), a migraine-focused biotech.
It also just teamed up with Roivant Sciences to launch Proivant Therapeutics, which is working on treatments for autoimmune diseases.
So, all in all, is PFE stock a buy or a sell?
Pfizer Stock Fundamentals: Earnings Strong
In the first quarter, adjusted Pfizer earnings were $1.62 per share on $25.66 billion in sales. Earnings surged 72% and sales rocketed 77%. Both beat projections. Comirnaty sales were $13.2 billion, above forecasts. Paxlovid brought in $1.5 billion in sales, below expectations.
Pneumonia vaccine Prevnar and blood thinner Eliquis topped forecasts, and grew a respective 59% and 12% operationally. But sales of arthritis drug Xeljanz tumbled 29%. In the U.S., revenue from breast cancer med Ibrance fell 5%.
Overall, total first-quarter growth lined up with CAN SLIM rules for investing. But excluding the impact of Comirnaty and Paxlovid, sales inched just 2% higher. 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.
That trend is expected to continue in the second quarter. Analysts polled by FactSet call for adjusted income of $1.79 a share and $25.45 billion in sales, rising a respective 67% and 34%.
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 $6.72 a share, minus some items, up 52%. Analysts call for sales to pop 27% to $103.45 billion. Pfizer expects $98 billion to $102 billion in sales and adjusted earnings of $6.25-$6.45 per share.
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’s advisors said the benefits of Pfizer’s vaccine outweigh the risks for children under 5. 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.
Further, the vaccine is still going through testing. It led to a similar level of antibodies in young kids as it did in teens and adults. But the company has yet to reach the number of cases it needs to finalize the effectiveness numbers. The vaccine is one-tenth the dosage given to adults.
Moderna’s 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.
Pfizer and BioNTech have also tested an omicron-specific booster. As a fourth shot, the booster led to a 13.5-19.6-fold increase in omicron-blocking antibodies, depending on the dosage. Instead, the FDA is hoping the companies will update their booster again, this time focusing on two newer member of the omicron family: B.A.4 and B.A.5. Their previous omicron shots focused on B.A.1.
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. Molnupiravir also carries the risk of cancer or passing birth defects onto unborn children in pregnant women.
Other PFE Stock News
Bearishly, Pfizer announced disappointing test results for its blockbuster drug, Ibrance, combined with another drug called letrozole in women with a form of breast cancer. Patients lived longer while taking the combination, but the results weren’t statistically significant.
But the company is working to expand beyond Covid with messenger RNA technology, the platform used to develop the vaccine. It has a gene-editing deal with Beam Therapeutics (BEAM), and deals with Codex DNA (DNAY) and privately held Acuitas Therapeutics to its bolster messenger RNA efforts.
Technical Analysis: PFE Stock Eyes Buy Point
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a perfect Composite Rating of 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 94 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 outranks 94% of all stocks in terms of performance.
The pharmaceutical company’s EPS Rating, a measure of profitability, is a 89 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 Or A Sell?
Based on CAN SLIM rules of investing, PFE stock isn’t a buy right now. It’s also not a sell. Shares are consolidating, but have yet to break out. Investors are encouraged to buy a stock when it rises above and is within 5% of its entry.
The company is expected to grow bullishly in the second quarter, keeping it in line with CAN SLIM advice. But that will mostly come on the back of its Covid products.
It’s important to keep tabs on how Pfizer stock performs as Covid moves into its endemic phase. Results appear promising so far, but it will be important to see how the company deals with the dominance of the omicron variant.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
YOU MAY ALSO LIKE: