Any good news in the race to develop a COVID-19 vaccine garners plenty of attention. That's exactly what happened last week after Pfizer (PFE 0.11%) and BioNTech (BNTX 2.23%) announced preliminary results from a phase 1 study of COVID-19 vaccine BNT162b1.

It's not surprising that Pfizer stock jumped on the positive news. But does the potential for its COVID-19 vaccine really make the big pharma stock a buy?

Healthcare professional holding a vial labeled COVID-19 Vaccine and giving a thumbs-up

Image source: Getty Images.

Why investors are excited

Investors have reason to be excited after the update from Pfizer and BioNTech. Researchers evaluating the efficacy of COVID-19 vaccine candidates especially look for the production of antibodies that bind to the novel coronavirus and antibodies that neutralize the virus. BNT162b1 delivered on both fronts.

Participants in the phase 1/2 study received two doses of BNT162b1. Seven days after the second dosing of the vaccine, all participants who took the 10-microgram or 30-microgram dose had significantly elevated binding antibodies and neutralizing antibodies.

What's particularly impressive about the results is that the vaccine candidate appeared to produce neutralizing antibody levels at or above those found in patients who have recovered from COVID-19. BNT162b1 was even able to achieve this at relatively low dose levels.

It's still early, but Pfizer and BioNTech could have a winner on their hands if further clinical testing goes well. The two drugmakers are also evaluating at least three other messenger RNA (mRNA) vaccine candidates for immunization against SARS-CoV-2, the novel coronavirus that causes COVID-19.

The big picture

Pfizer and BioNTech aren't the only companies developing COVID-19 vaccine candidates. Several drugmakers are farther along in testing, notably including AstraZeneca and Moderna. It's possible that multiple vaccines will ultimately prove to be successful.

There's also a much bigger picture for Pfizer than just its novel coronavirus program. Pfizer raked in $51.8 billion in revenue last year. It boasted eight blockbuster products and several more that are likely on the way to generating annual sales of $1 billion or more.

Pfizer should soon see its sales growth accelerate with the planned spinoff of Upjohn and merger of the unit with Mylan. The new company resulting from the Upjohn-Mylan deal will inherit several drugs for which sales are declining. That clears the way for Pfizer's rising stars, including blood thinner Eliquis and rare-disease drug Vyndaqel, to make a greater impact on its overall growth.

Everything won't be sunshine and roses for the "new" Pfizer, though. The company reported a major clinical setback in June for Ibrance as an adjuvant therapy in treating early-stage breast cancer. Pfizer had previously hoped that the early-stage adjuvant opportunity would double the addressable patient population for Ibrance, which made nearly $5 billion in sales last year.

An answer with an asterisk

Is Pfizer's COVID-19 vaccine program enough by itself to make the stock a buy? The answer is "no."

The reality is that no drug or vaccine on its own can make Pfizer a great pick. Pfizer is simply too big for that to happen. And no early-stage program, no matter how promising, is likely by itself to fundamentally change the dynamics for a drugmaker Pfizer's size.

However, that answer of "no" comes with an asterisk. In my view, Pfizer is a stock that's on the bubble of being a good pick. The company's lineup and pipeline should enable it to deliver reasonable growth after the Upjohn-Mylan transaction closes. With its dividend added in, Pfizer's total returns could be attractive.

The problem is that the setback for Ibrance could negatively impact Pfizer's growth. That's where the company's COVID-19 vaccine comes into play. If Pfizer and BioNTech achieve success with the BNT162 program, it's possible that the vaccine could generate enough revenue to largely offset the lower potential for Ibrance.

I think that a more complete answer to the question at hand is "no, not yet." The early results for BNT162b1 aren't enough to make Pfizer a buy. But if the COVID-19 vaccine keeps sailing through clinical testing, it could very well swing the balance in favor of Pfizer. For investors who already own the pharma stock, my view is that it's worth waiting to see what happens.