Pfizer (PFE +1.68%) became a stock market star in early pandemic days as it brought the first coronavirus vaccine to market. The company generated billions of dollars in revenue thanks to its coronavirus vaccine and treatment, even reaching a record of more than $100 billion in total company revenue in 2022.
But in recent times, Pfizer's seen its earnings and share price decline along with demand for its coronavirus products. On top of this, some of Pfizer's blockbuster products are losing exclusivity later this decade, and this will weigh on revenue. Share performance has reflected this, with the stock declining more than 50% over the past three years.
The company hasn't been sitting around watching this happen, though. Instead, it has focused on reviving growth and keeping the new momentum going over the long term. Pfizer even put $43 billion behind one particular program to strengthen its expertise in this key treatment area and supercharge growth. My prediction is that this bet will help Pfizer stock take off in 2025. Let's take a closer look.
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Pfizer's time in the spotlight
First, let's consider the Pfizer story so far. The company has been around for 175 years, and through most of its history, Pfizer sold a broad range of drugs for various indications. But the pharma player truly stepped into the spotlight early in the pandemic with the development of its coronavirus products. These products, as mentioned, led to significant growth for the company -- followed by decline when demand for the products waned.
At the same time, the expiration of key patents is coming up for some major Pfizer drugs, including blood thinner Eliquis and breast cancer drug Ibrance. The company has even said that it expects $17 billion in lost revenue from 2025 through 2030 due to losses of exclusivity.
NYSE: PFE
Key Data Points
To compensate for this and for the decline in coronavirus product sales, Pfizer began a record product launch process -- bringing to market 19 new products or indications in just 18 months. The company also focused on acquisitions to grow, and this is where the $43 billion bet comes in. Last year, Pfizer paid this amount to buy Seagen, an oncology specialist focused on antibody-drug conjugates (ADCs). ADCs work by using the targeting power of monoclonal antibodies, with the antibody delivering powerful drugs directly to cancer cells.
Seagen drugs are offering Pfizer growth
Seagen had drugs on the market, and these drugs are already delivering growth for Pfizer. Adcetris for Hodgkin lymphoma, Padcev for bladder cancer, Tukysa for breast cancer, and Tivdak for cervical cancer have each seen revenue climb in the recent quarter year over year. Padcev's revenue even doubled, reaching more than $400 million. The Seagen acquisition also brought Pfizer a strong ADC pipeline, with several candidates already in phase 3 trials. Pfizer says it aims to have eight or more oncology blockbusters on the market as of 2030 -- and the pipeline we see today could make that a reality.
So, Pfizer's bet looks like it will pay off in the long run -- but why am I optimistic about the Seagen purchase driving gains as early as 2025? First, Pfizer looks particularly cheap today, trading at about 8x forward earnings estimates, considering its long-term prospects in oncology and overall. Second, the Seagen products, as mentioned above, are already offering the company significant growth. In the recent quarter, Pfizer's oncology portfolio -- including Seagen products and Pfizer's in-house developed products -- delivered revenue growth of more than 30%. The company became the third-largest U.S. oncology company by sales in the first half of the year.
Pfizer has set its biggest goals for 2030, but the growth to get there should happen in the months and years to come. As these revenue gains and new product launches happen, the stock could advance. That's why my prediction is that this big oncology bet will help Pfizer stock take off in 2025 -- and that means now is a great time to add this pharmaceutical player to your portfolio.
