Pfizer (PFE 3.64%) recently reported billions of dollars in revenue last year thanks to its coronavirus vaccine. And the big pharma company predicts its vaccine and new coronavirus treatment together will bring in $54 billion this year. But that's not all. Pfizer's entire portfolio of products may bring annual revenue past the $100 billion mark.
Sounds pretty impressive. Still, some investors worry about Pfizer's growth after the pandemic. The risk is a major drop in coronavirus vaccine sales. And this could come at a time when some of Pfizer's biggest drugs begin to face generic competition. Now here's some good news. These concerns about Pfizer's future may be greatly overdone. Pfizer CEO Albert Bourla recently pronounced 14 words that should reassure Pfizer investors -- and those looking to get on the shares.
Image source: Getty Images.
Why investors are worried
First, let's talk a little more about investors' concerns. Right now, vaccination rates are high in many countries and regions. For example, 64% of the U.S. population and 72% of the European Union population are fully vaccinated. At the same time, coronavirus cases are on the decline -- and some experts have said the situation may switch from pandemic to endemic as soon as this year. So, the idea is all of this may result in a drastic drop in vaccine demand.
But a significant decline in demand might not happen. It's important to remember that, in an endemic situation, a virus continues to circulate. This means the population still needs vaccination. And that equals ongoing revenue for vaccine makers.
As for generic competition, yes, blockbusters such as blood thinner Eliquis and breast cancer drug Ibrance are set to lose patent protection later this decade. In fact, analysts have even estimated that more than 80% of Eliquis' revenue could drop off by 2030, according to FiercePharma.
But Pfizer's CEO says consensus estimates that expect an overall decline in the company's top line between 2025 and 2030 are wrong.
"Our goal is to continue to be a growth company from '25 to 2030," Bourla said during Pfizer's recent earnings call. Among reasons for his confidence, Bourla cited the "durability" of Pfizer's coronavirus products and the strength of the company's pipeline.
Six out of 10 doses are Pfizer
Here's a quick look at both. First, the coronavirus program. Pfizer has established itself as the vaccine leader. The company said six out of 10 vaccine doses given in the U.S. as of early this month were Pfizer shots. And Pfizer continues to gain market share. The Pfizer vaccine represented 70% of all doses distributed in the U.S. and the EU as of the first week of February.
At the same time, Pfizer is taking leadership in the treatment market too. The U.S. Food and Drug Administration has authorized pills by Pfizer and big pharma rival Merck. But trial data suggests Pfizer's efficacy may be stronger. Pfizer's trial showed an 89% reduction in risk of hospitalization or death. The Merck study showed a 30% relative risk reduction.
More than 40 countries have authorized Pfizer's pill, Paxlovid. And the company aims to produce 120 million treatment courses this year.
Importantly, Pfizer is moving quickly to keep up with the coronavirus market of the future. The company is working on a next-generation pill and is testing new versions of its vaccine to better address new variants. The relationships Pfizer has already built with governments, its infrastructure and experience, and its focus on staying one step ahead should help it maintain leadership in the field.
89 pipeline candidates
Now, a look at the pipeline. The pharma giant has 89 candidates in development. Last year, Pfizer began 13 pivotal trials -- that's a record high for the company. If even a few of these trials go smoothly, new product launches may be right around the corner.
Pfizer also has put an emphasis on research and development. Last year, it increased R&D spending to $10.5 billion from $8.9 billion a year earlier. Pfizer also is seizing opportunities beyond its own laboratories. It's invested almost $25 billion in business development deals since 2019. And the company says this may add $13 billion to 2030 revenue.
So Bourla's words are encouraging. And the company's efforts and financial data support his case. Pipeline and R&D investments may compensate for some of the blockbuster losses ahead. And it looks as if the coronavirus portfolio could remain a strong driver of revenue growth for quite some time -- even after the pandemic is over. After all, if vaccine revenue declines, it may still maintain itself at a very high level.
All of this means there is reason to be optimistic about Pfizer's growth this year -- and well into the future.
