Pfizer (PFE 0.55%) ended 2022 with a bang, delivering its highest level of revenue ever -- $100 billion -- thanks to its coronavirus vaccine and treatment. But the drop in demand for those products last year, as we headed toward a post-pandemic world, meant a big decline from those revenue levels, and that's weighed on share performance. Pfizer shares have tumbled 37% over the past year.
At the same time, some of Pfizer's other blockbusters are set to lose exclusivity later this decade, further weighing on earnings. So, you may not imagine Pfizer as a stock that could help you retire a millionaire. But it may be worth taking a second look at this big pharma player, because, despite these challenges, a new era of growth might be just ahead. Let's find out more.
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Lower Comirnaty and Paxlovid revenue
First, a closer look at Pfizer's path, from coronavirus peak revenue through today. The company's earnings took off as sales for vaccine Comirnaty and treatment Paxlovid soared in earlier pandemic days. Last year, those products together brought in peak revenue of $55 billion. Now, though, coronavirus cases and demand for covid products have declined -- and Pfizer is expecting significantly lower revenue for Comirnaty and Paxlovid in the future. The company predicts $8 billion in combined revenue this year.
Meanwhile, other top-selling products -- such as breast cancer drug Ibrance and blood thinner Eliquis -- are set to lose exclusivity this decade. Pfizer predicts patent expirations will result in lost sales of $17 billion from 2025 to 2030.
But Pfizer has been preparing for this moment by readying other products that should drive future revenue. In fact, the pharma giant is completing its biggest-ever series of product launches. It aimed to release 19 new products in a period of 18 months, products that should bring in $20 billion in revenue in 2030.
At the same time, Pfizer has made several acquisitions that also should boost revenue down the road. For example, it recently completed the purchase of Seagen, an oncology company specializing in antibody-drug conjugates. This type of product uses the power of antibodies to target tumors -- and deliver drugs directly to them.
Pfizer expects Seagen's products to deliver more than $3 billion to revenue this year and $10 billion in 2030. And Pfizer predicts business deals -- including the Seagen purchase -- should result in $25 billion in revenue by that time.
All of this means Pfizer is on the road to compensating for its patent expirations -- and growing beyond them too.
Tracking Pfizer's progress
To track Pfizer's progress, it's important to look at sales prior to the launch of its covid products -- a pandemic is an uncommon situation, so it doesn't offer us a fair comparison point. In 2019, Pfizer reported sales of about $51 billion, and the company aims for $84 billion in sales in 2030 from non-covid products. On top of this, coronavirus products still could continue to bring in billion-dollar revenue, especially if the company successfully develops a combined coronavirus/flu vaccine -- the candidate now is in clinical trials.
Now, let's consider Pfizer's share performance. Its coronavirus product sales helped the share price to reach its highest ever, but it's since fallen 50% from that peak. The next few years may be challenging for the company as older products lose exclusivity -- and it will take some time to grow sales of newer products. So, the stock may not take off immediately. But, all of the moves Pfizer is making today could help the shares win over time -- meaning now makes a great moment for patient, long-term investors to buy Pfizer stock.
Could it help you retire a millionaire? If you invest only in Pfizer, it's very unlikely that move will do the trick. Even if the stock tripled, you would have to invest a fortune today to eventually reach the $1 million mark. And even compounding isn't likely to reach the goal. For example, if you add $100 per month to Pfizer stock from age 30 to 65, assuming a 10% rate of return, your investment would reach $325,229.
But, as part of a diversified portfolio, and through holding onto Pfizer and other promising stocks for the long term, Pfizer could help today's investor retire a millionaire -- especially since this healthcare giant may be heading for another era of growth down the road.
