Pfizer (PFE 0.23%) will report its fourth-quarter results on Feb. 8 and investors are bound to find answers to questions about the company's ongoing performance. Since the early days of the pandemic in January 2020, the stock has risen by more than 54%, beating the market's 40% return. Aside from the usual slew of clinical trial updates and new pipeline projects, all eyes will be on sales of Comirnaty and Paxlovid, the pharma company's two commercialized coronavirus medicines.
Whereas the gains in market share of the Comirnaty jab will be in focus, the outlook for the Paxlovid antiviral pill is more complex. Let's take a moment to consider the most relevant factors for investors as they make buying or selling decisions when the earnings report is published next month.
Image source: Getty Images.
Will the COVID pill rollout keep up its momentum?
As a major pharma company, Pfizer's expertise is in developing drugs, advancing those drugs through the clinical trials process, and then commercializing them profitably around the globe.
Pfizer's latest success story is its new antiviral pill called Paxlovid which aims to prevent severe disease in people who are infected with the coronavirus by stopping viral replication cold. The U.S. government has already agreed to purchase 20 million doses of the drug this year, 10 million of which should be delivered before June.
So far, Paxlovid has been developed and manufactured at a face-melting pace, and recent signs point to that pace quickening. As of late November, Pfizer planned to manufacture 80 million doses. In January, it set a goal for 3.6 billion tablets for 2022, making 120 million courses of treatment in total. Management has left the door open to scaling production output even further this year, depending on whether governments are interested in purchasing enough of the drug to stockpile it for future surges.
On Jan. 18, Pfizer reported new data showing that the drug appeared to be effective at preventing the omicron variant of the coronavirus from replicating in vitro. This means the company is likely to have even more buyers in the wings.
In short, investors should be on the lookout for any updates relating to the volume of Paxlovid advance purchase agreements and manufacturing capacity.
SVB Leerink analyst Geoffrey Porges predicts that Pfizer could make $24.2 billion from sales of the antiviral in 2022, which would put it close behind Comirnaty's expected sales of around $31 billion. Porges predicts that'd put its revenue for the year at around $101 billion.
Assuming the stock's price-to-sales (P/S) multiple remains around 4.4, that'd put its market cap at around $444.4 billion, a massive increase over its current level near $284 billion.
If the company reports that things are going even faster than its recently scaled-up plans -- and by the look of it, that's probable -- it'll be another strongly positive sign for this pharma stock.
Are there new mRNA drugs in the works?
With two mRNA vaccines for COVID on the market, the field of mRNA medicine has gone mainstream. And in that vein, investors should keep an eye out for any indications that Pfizer is staking its claim during the looming gold rush. Though its pipeline has projects in a slew of different disease areas, mRNA medicines are likely to be relevant to treatments in many varying conditions.
Pfizer recently initiated a slew of fresh collaborations within the mRNA space, inking deals with the field's leaders like BioNTech as well as with businesses like Beam Therapeutics and Acuitas Therapeutics. With BioNTech, the goal is to develop an mRNA-based shingles vaccine. Pfizer's collaboration with Beam Therapeutics is focused on drug development for rare genetic diseases, and its work with Acuitas is based around the biotech's lipid nanoparticle drug-delivery systems.
All three of these deals will help to secure Pfizer's future as a leading mRNA company and increase the chances that it'll be able to box out the other powerful competitors like Moderna. But more investment is probably better in that regard. If there's any clue about the pharma's intentions to acquire or forge new agreements with the smaller businesses in the space, it'll be a positive sign for its future prospects.
Plus, getting a bit more information about the existing work with Beam and Acuitas could also be good news. Especially with regard to Acuitas' lipid nanoparticle technology, even modest breakthroughs in the lab could have implications for all of Pfizer's other mRNA projects.
So, listen to the earnings call and try to pick up any tidbits about how the collaboration is proceeding. The more the stakeholders talk about the collaboration, the more favorable it'll be. Likewise, any hints about new pipeline projects in the mRNA space are likely to tie into the new agreements directly, which means that there are bound to be potential positive revenue impacts down the line.
