Five years ago, the eyes of the world were on Pfizer (PFE 1.10%). The big drugmaker was racing to develop a COVID-19 vaccine with its partner, BioNTech (BNTX +3.97%). Its stock was poised for a huge gain once that vaccine launched. In general, Pfizer was on the ascent.
It's a different story today. Sales for Pfizer's COVID-19 vaccine have declined significantly. The company has encountered clinical setbacks. Its stock has plunged roughly 60% below its late 2021 peak. Pfizer is no longer on the ascent.
But where will Pfizer be in five years? Here are five answers to that question.
NYSE: PFE
Key Data Points
1. Different top-selling drugs
Pfizer's top-selling blockbuster drugs today include blood thinner Eliquis, Prevnar pneumococcal vaccines, its Vyndaqel/Vyndamax franchise targeting cardiomyopathy caused by transthyretin-mediated amyloidosis, and breast cancer drug Ibrance. The list will almost certainly look different in 2030.
Eliquis and Prevnar 13 lose U.S. patent protection next year. Ibrance follows suit in 2027. Pfizer hopes to push the loss of exclusivity for Vyndaqel/Vyndamax out to 2028, pending a patent term extension. The company's patent cliff also includes kidney cancer drug Inlyta, autoimmune disease drug Xeljanz, and prostate cancer drug Xtandi, all of which go off-patent within the next two years.
Which drugs will fill their shoes? Pfizer already has a successor to Prevnar 13 on the market -- Prevnar 20. Acquisitions and internal R&D have also added other rising stars to its portfolio.
2. A bigger player in oncology
One relatively safe bet about how Pfizer's lineup will look different five years from now is that the company will be a bigger player in oncology. Sales for bladder cancer drug Padcev, lung cancer drug Lorbrena, multiple myeloma therapy Elrexfio, and breast cancer drug Talzenna are already growing rapidly.
Of the 30 late-stage programs in Pfizer's pipeline, 20 target cancer indications. These programs include several new target indications for existing drugs, such as Elrexfio and Padcev, along with promising new candidates such as atirmociclib.
Image source: Getty Images.
3. More efficient
The Pfizer of 2030 will likely be more efficient than the company today. Pfizer is focusing heavily on optimizing its operations. The company expects savings of around $1.5 billion from the first phase of this effort, which should conclude by the end of 2027. Its overall goal was to achieve cost savings of $4.5 billion. However, Pfizer now thinks the number will be $1.2 billion higher, thanks in part to leveraging automation and artificial intelligence.
These operational efficiencies will extend to Pfizer's R&D efforts. Pfizer CEO Albourt Bourla told analysts in April that the company is "intensifying our rigorous commercial assessment and portfolio prioritization from early clinical development." He added that Pfizer will direct its "investment and attention to potential blockbuster or mega-blockbuster" therapies.
4. Bigger and growing modestly
Overall, I predict Pfizer will be a bigger company five years from now. I also expect that it will continue to grow beyond then, albeit modestly.
Just how big Pfizer will be is hard to say. There's a lot of negativity about the company's prospects baked into its share price, with the stock trading at only 8.3 times forward earnings. However, if this negativity wanes as a result of good news (perhaps from acquisitions or positive earnings surprises), Pfizer's market cap could realistically approach $200 billion by 2030 versus around $137 billion today.
5. Still paying a great dividend
I'm confident that Pfizer will still pay a great dividend in 2030. The company's management remains firmly committed to the dividend program. CFO Dave Denton said in the first-quarter earnings call, "[T]he dividend remains a critical component and a key component of our capital allocation strategy."
Pfizer's board of directors and executive team realize that the dividend is an important reason investors continue to buy the stock. I doubt they'll do anything to jeopardize the dividend program.
Will Pfizer's dividend yield top 7% as it does now? Probably not, at least not if the stock performs relatively well over the next few years as I expect it will.
