What happened
Shares of Pfizer (PFE -0.08%) were up by 4% as of 12:08 p.m. ET Wednesday. The drugmaker's stock is rising today in response to two separate catalysts.
First up, President Joe Biden's Test to Treat initiative, announced during his State of the Union address on Tuesday, ought to be a boon for Pfizer's oral COVID-19 pill Paxlovid. Second, the Food and Drug Administration (FDA) has granted Breakthrough Therapy status to the drugmaker's late-stage respiratory syncytial virus (RSV) vaccine, RSVpreF.
Image source: Getty Images.
So what
Although Pfizer is already guiding for a whopping $22 billion in Paxlovid sales this year, President Biden's Test to Treat plan could push this annual revenue figure even higher. Biden's initiative would allow anyone who tests positive for COVID-19 to receive a free course of Paxlovid in order to prevent hospitalization.
On the RSV vaccine side of things, Pfizer now has a commanding lead in the race to develop a vaccine for this common seasonal illness. The big deal is that an effective RSV vaccine would likely generate mega-blockbuster sales figures in short order (greater than $5 billion per year).
Now what
Is Pfizer's stock still worth buying? The shares, by most analyst estimates, are trading well under fair value right now. Geopolitical headwinds, inflation fears, and concerns about the sustainability of its COVID franchise have all acted in concert to push the drugmaker's shares lower since the start of 2022.
However, this hefty pullback doesn't appear to be warranted from a fundamental perspective. Pfizer is a fundamentally sound company with a stellar shareholder rewards program and a healthy outlook.
All told, bargain hunters might want to take advantage of this early-year dip in the drugmaker's shares.
