If winners keep winning, as the saying goes, then 2022 should be a great year for Pfizer (PFE 2.40%). The company has consistently delivered blowout financial results in recent quarters, thanks largely to its COVID-19 vaccine, Comirnaty. Investors have responded by bidding up Pfizer's shares; the company was one of the best-performing pharma giants in 2021.
But how will things turn out for Pfizer in 2022? Let's look at what's going on with this drugmaker and determine whether its shares can soar nearly 80% to be worth $100 by the end of this year.
The coronavirus tailwind isn't over
Many of us hoped that the pandemic would slowly but surely subside once vaccines became widely available. Alas, that doesn't seem to be happening. Even in countries with relatively high vaccination rates -- such as the U.S. where 79.1% of people aged five and above have received at least one dose -- newer and more contagious variants of the coronavirus are still wreaking havoc. First, it was delta and now it is omicron that is causing a surge in cases.
While the final numbers aren't in yet, Pfizer said it expects to generate $36 billion from Comirnaty for the full 2021 fiscal year. And given the evolution of the pandemic, 2022 should be another strong year on this front. During Pfizer's third-quarter conference call, Chief Financial Officer Frank D'Amelio said the company sees potential sales of about $29 billion for Comirnaty in 2022.
But that's not all. In late December, Pfizer received emergency use authorization from the U.S. Food and Drug Administration for its COVID-19 antiviral treatment, Paxlovid. Pfizer has already agreed to sell 20 million treatment courses of Paxlovid to the U.S. Government and an additional 2.75 million courses to the United Kingdom. Based on the price tag of the first 10 million treatment courses it contracted to the U.S. ($5.29 billion), Pfizer should generate at least $10 billion in sales from Paxlovid this year.
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Other avenues for growth
While Pfizer's coronavirus-related work will have the most significant effect on its financial results this year, some of its other products will undoubtedly contribute too. In the third quarter, Pfizer's revenue (excluding Comirnaty) increased by a decent 7% year over year to $11.1 billion. Sales of the company's anticoagulant Eliquis jumped 21% to $1.3 billion during the quarter while cancer medicine Xtandi recorded $309 million in sales, up 16% from the year-ago period.
One blemish in Pfizer's lineup is immunosuppressant Xeljanz. In January 2021, the drugmaker released results of a study that revealed an increased risk of serious heart-related events and cancer for patients treated with it. As a result, regulators updated Xeljanz's prescription information, which now includes a boxed warning for these risks. That explains why Xeljanz's revenue has been decreasing -- down 7% year over year to $610 million in the third quarter. Despite this issue, management believes Xeljanz could start seeing growing sales this year as the market adjusts to these changes.
Will Pfizer's stock soar this year?
What does this all mean for Pfizer now? While the company set the bar very high in 2021, Pfizer's financial results could be even stronger in 2022. The company's COVID-19 business is still firing on all cylinders, and the rest of its portfolio is robust as well. On top of that, the drugmaker is trading at just 11.5 times next year's earnings, less than the 13.5 average for pharma companies as of Dec. 1.
That said, expecting its stock to surge 80% in a mere 12 months could be a tall order for a company the size of Pfizer -- even if it is performing exceptionally well right now. In my view, that's not going to happen this year, but for long-term investors, it doesn't matter. Pfizer has the tools to perform well, not just in the next 12 months but also for many years to come. And given that it is reasonably valued, now may be a great time to add shares of this top pharma company to your portfolio.
