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Could Pfizer's COVID Pill Be Even Bigger Than Its Vaccine?

By Adria Cimino – Nov 10, 2021 at 6:30AM

Key Points

  • Pfizer’s investigational pill reduced hospitalization and death by 89% in a clinical trial.
  • The company is submitting the data to the FDA in a request for authorization.
  • Sales for a coronavirus pill could surpass $10 billion annually, some analysts say.

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It probably means another billion-dollar opportunity is on the way.

Pfizer (PFE -0.25%) has won the title of leader when it comes to coronavirus vaccine prevention. The company recently said it holds 74% of the U.S. vaccine market and 80% of the European market. That's great news. But things are getting even better. Now, Pfizer may be about to claim leadership in another blockbuster area: coronavirus treatment.

The big pharma company last week released results of a phase 2/3 trial of its investigational COVID-19 pill. Data were so strong that an independent monitoring committee recommended Pfizer stop enrolling patients in the trial -- and seek regulatory authorization. Moving forward, many of us have one big question. Could a Pfizer coronavirus pill be even bigger than the company's vaccine?

A person takes a pill with a glass of water.

Image source: Getty Images.

A $36 billion forecast

First, some background on the vaccine. Pfizer has reported quarter after quarter of billion-dollar vaccine sales ever since the product launched last December. Most recently, Pfizer lifted its annual revenue forecast for the vaccine to $36 billion. That's up from about $33 billion. Pfizer shares vaccine profit with partner BioNTech. But that still leaves the company with significant revenue from the product.

Pfizer expects to generate $29 billion in revenue next year from the vaccine. That's according to advance purchase agreements signed so far. So, it's possible that next year's sales guidance will increase.

However, will vaccine revenue stagnate or fall post pandemic? That's the question no one can truly answer right now. That said, it's very possible vaccine or booster revenue won't drop drastically -- and will remain high over the long term. Experts predict the coronavirus is here to stay. And that means people will need protection -- especially those most vulnerable to severe illness.

Now, let's take a look at the prospects for Paxlovid, Pfizer's investigational coronavirus pill. Paxlovid cut the risk of hospitalization or death by 89% in the clinical trial. The treatment was given to non-hospitalized adult patients who were at risk of developing a severe case of COVID-19. Pfizer plans to submit these results as part of its rolling submission for authorization to the U.S. Food and Drug Administration (FDA).

Paxlovid acts by interfering with viral replication early in infection. That's why the idea is to prescribe it for patients as soon as they're diagnosed with COVID-19. They then can take the pill treatment at home.

Merck's investigational pill

Right now, an approved antiviral pill doesn't exist. But Pfizer actually may not be first to market. Merck presented positive data from a study of its investigational coronavirus pill last month. The FDA plans to hold an advisory committee meeting on Nov. 30 to discuss Merck's submission. We don't yet know when the FDA will discuss the potential Pfizer product. Merck's investigational pill reduced the risk of hospitalization or death by 50%. We don't have complete data reports from each company. But from what we do know, Pfizer's candidate seems to be more efficacious.

As for market size, a Jefferies & Co. estimate says annual sales for a coronavirus pill could top $10 billion annually, Reuters reported.

Of course, if we look at Pfizer's vaccine sales right now, even owning that entire pill market wouldn't make a pill the bigger product by sales. In the future, a coronavirus pill could become the bigger product -- if vaccine sales decline. The price Pfizer sets for its vaccine and booster products in the coming years also could be a determining factor. For instance, demand could decline, but an increase in prices could compensate or partially compensate. Right now, without these elements, it's too early to determine whether coronavirus pill sales eventually may surpass vaccine sales.

But here's what we can say. The COVID-19 pill candidate, if authorized, clearly could become a major part of Pfizer's portfolio of coronavirus products. Considering its efficacy, Pfizer could take the lead over Merck when it comes to market share.

At the same time, as mentioned above, it seems likely vaccine sales will continue for quite some time. So, the launch of a pill could give Pfizer dominance in coronavirus prevention and treatment. All of this means, even if the coronavirus pill isn't as big as the vaccine -- it's still big enough to significantly add to Pfizer's earnings prospects well into the future.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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