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Pfizer Inc PFE

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Pfizer’s Continued Strong Pipeline Development Increasingly Sets Up Solid Near-Term Growth

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

After a deep dive on several of Pfizer’s pipeline drugs combined with continued strong data for COVID-19 treatment Paxlovid, we have increased our projections for several key drugs leading to a fair value estimate increase to $48 from $45.50. The strong pipeline increasingly supports our wide moat rating for the firm. However, we believe the uncertainty around the duration of sales from Pfizer’s COVID-19 vaccine Comirnaty and COVID-19 treatment Paxlovid is increasing. We still believe the majority of these product sales will occur in the near term, followed by a sharp decline by 2024. However, we recognize the growing uncertainty around how long the COVID-19 pandemic will last, especially with the continual rise of variants. As a result, we are increasing Pfizer’s uncertainty rating to medium from low. We believe a medium uncertainty better reflects the potential outcomes surrounding the massive cash flows Pfizer is generating with COVID-19 products. While we believe the market is likely factoring in too long of a tail for sales from COVID-19 products, we believe there is a 25% chance of a bull case that these products will be in demand for a longer duration that we assume in our base case.

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Company Profile

Business Description

Pfizer is one of the world's largest pharmaceutical firms, with annual sales close to $50 billion (excluding COVID-19 vaccine sales). While it historically sold many types of healthcare products and chemicals, now, prescription drugs and vaccines account for the majority of sales. Top sellers include pneumococcal vaccine Prevnar 13, cancer drug Ibrance, cardiovascular treatment Eliquis, and immunology drug Xeljanz. Pfizer sells these products globally, with international sales representing close to 50% of its total sales. Within international sales, emerging markets are a major contributor.

235 East 42nd Street
New York, NY, 10017
T +1 212 733-2323
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 78,500