Pharma giant Pfizer (PFE 0.63%), is the co-developer with Germany's BioNTech (BNTX 0.66%) of one of the international vaccines against COVID-19. The pair has seen much success from the COVID-19 vaccine with it contributing the bulk of Pfizer's operational growth of 30% year over year, bringing the 2022 sales to roughly $100 billion. Now, the pharma looks set for significant growth powered in part by vaccines for other high-profile infectious diseases.

Let's examine some key data for investors to consider.

COVID-19 product sales drove 2022 growth

Sales growth was notable in 2022, however, excluding the vaccine, which goes under the brand name Comirnaty, and the COVID-19 treatment Paxlovid, growth was just 2%. Adjusted diluted earnings per share (EPS) rose by a strong 62% for the year to $6.58, and unadjusted diluted EPS was up 42% to $5.47. In 2023, Pfizer expects revenues of about $13.5 billion for Comirnaty and about $8 billion for Paxlovid, which would amount to declines of 64% and 58%, respectively.

A downside risk for Pfizer comes from the same source as one of its main strengths: Comirnaty. Competitor Moderna sued Pfizer and its German partner in federal court in Massachusetts last August, alleging infringement of its patents for its competing COVID-19 vaccine. Given the complexity of patent law and the novelty of the medical technology involved, predicting the outcome of this case is impossible.

While uncertain litigation outcomes and declining COVID-19 sales put pressure on the top line, the company is shifting focus to other vaccines. Other new Pfizer vaccines now undergoing FDA regulatory review include:

  • the pneumonia vaccine Prevnar 20 Pediatric,
  • a respiratory syncytial virus (RSV) vaccine for older adults that goes for now under the clunky name RSVpreF,
  • and a five-strain meningococcal vaccine known as MenABCWY.

PFE shares are currently near their 52-week low, but the company's long-term potential should outweigh concerns over this passing dip.

A focus on vaccines

The other vaccines now well along in the pipeline are an important reason why the company still looks strong for investors. Before 2020, vaccines had long been considered the red-headed stepchild of the pharmaceutical industry. They weren't sexy or super-profitable like the blockbuster drugs for cholesterol, cancer, or depression. At that time, Big Pharma showed little interest in developing new vaccines or producing much more than the minimum required of tried-and-true vaccines, which had long since seen their patent protections expire.

Post-COVID, everything looks different. Experts warn that new pandemics could break out at any time. Just after fears eased over a "tripledemic" of COVID, RSV, and flu earlier this winter, concern began to rise over the bird flu epidemic devastating animal populations across North America and whether it might jump to infecting humans.

Under the Prescription Drug User Fee Act (PDUFA), drug companies pay part of the cost of FDA review of their new products, and in return, the agency sets "goal dates" for its responses, although it often falls behind on these targets. For Pfizer's Biologics License Applications (BLAs) for Prevnar 20 Pediatric, RSVpreF, and MenABCWY, the goal dates are in April, May, and October, respectively. The FDA is considering the first two of these vaccines under its priority review program, and for the pediatric vaccine, the company only had to file a supplemental BLA because other versions of the vaccine are already approved.

In the second half of 2023, Pfizer expects the FDA's decision on its New Drug Application for etrasimod (selective S1P receptor modulator) for patients with moderately to severely active ulcerative colitis. The European Medicines Agency expects to make its decision on the drug in the first half of 2024.

Further back in its pipeline, Pfizer announced in December that its experimental vaccine for Lyme disease, VLA15, had produced elevated levels of antibodies and no safety concerns after six months in clinical trial participants. Pfizer and its French partner in developing the vaccine, Valneva SE (VALN -2.58%), currently sponsor phase 3 clinical trials, the last stage of testing before sponsors submit their investigational drugs or vaccines for FDA approval. But the kinds of risks inherent in drug and vaccine development were underscored on Feb. 17 when Pfizer said it had to drop half the participants in the VLA15 trial. The company stated, "following violations of Good Clinical Practice (GCP) at certain clinical trial sites run by a third-party clinical trial site operator," it also said this did not affect participants' safety.

Also still in clinical trials are Pfizer's elranatamab (PF-06863135) and fidanacogene elaparvovec. PF-06863135 is intended to be used as a sole therapy in cancers such as relapsed or refractory multiple myeloma, which the FDA granted its "breakthrough therapy designation" last November. The drug produced favorable safety and efficacy results in a "pivotal" phase 2 trial last year. Pfizer also announced positive top-line results from a phase 3 study for fidanacogene elaparvovec (hemophilia B gene therapy) in December.

After years in which critics of Big Pharma have accused the industry of making money off "me-too drugs" that mimic already available therapies, the basket of new vaccines and pharmaceuticals that Pfizer is offering seems a welcome and potentially profitable change. Since the company has already reported significant growth, the revenue dip is likely to be temporary. With heightened medical and public concern around infectious respiratory diseases likely to continue for a long time to come, Prevnar 20 Pediatric and RSVpreF are likely to be best sellers if they prove to be successful. Investors could then see the company's growth return as quickly as it dipped.