This co-investment should take the company to new heights.
However, in recent years, the all-or-nothing strategy has brought Pfizer downhill. The CEO quoted, “the pride of the pharmaceutical industry” “ends up in a very rapid deterioration.”
How Alliance Prosperity Gives to Deep Downs
COVID BOOM flushed the company with cash, and the global biotech company at Seattle-based headquarters deployed a series of new deals. In fact, with co-portfolio sales of $56 billion in 2022, Pfizer signed a deal worth up to $70 billion. In addition to the $43 billion deal by oncology pioneer Seagan in 2023, the deals include the $1.6 billion acquisition of migraine drug maker Biohaven Pharmaceutical Holding Co. Ltd and $5.4 billion global blood therapy company, producing sickle-cell-specific drugs for sickle-cell drug production.
But as the pandemic subsides, Pfizer’s co-portfolio sales have dropped from $56 billion in 2022 to $9 billion in 2024. Furthermore, its new deal was not expected. There is nothing to write about the efficacy of migraine drugs in clinical trials, and Pfizer’s dream is in trouble after finding serious side effects.
It can be said that many of Pfizer’s transactions have been miscalculated, which may have lowered the funds. Starcity is an aggressive investor who has been challenging to manage these capital allocation decisions. Overall, investors have also lost patience.
NYSE Listed Pfizer Inc. has corrected more than 50% from its 2021 peak. NSE Listed Pfizer Ltd, which owns 64% of its global parents, has a similar journey. Of course, since September 2024, NSE stocks have been colored by local factors such as currency deprivation after the FII sell-off and counter-trend.
Are things rising?
One of Pfizer’s biggest deals was the acquisition of Shigan in 2023 for $43 billion. From the outside, this is likely a deal to restore Pfizer’s fate. In response to this deal (among other things), Pfizer Ltd. shares appreciated 74%, reaching its peak ₹In September 2024, each person was 6,164.
Pfizer’s $4 billion oncology-driven revenue for the quarter ended December 2024 came from Seagen. In fact, Seagan’s share of FDA-approved antibody-toxic conjugate (ADC) technology is expected to contribute $10 billion to Pfizer’s risk-adjusted revenue in 2030.
Even if Seagan is not included, Pfizer’s oncology portfolio is rising to power. Its cancer drug Xtandi, which received NMPA approval in July 2024, clocked more than $500 million in revenues in the quarter ended December 2024. Further, the combination of Xtandi and Talzenna has been proven to improve survival by 9-14 months, and the FDA has approved Pfizer-Astella’s Padcev for the treatment of typically unresponsive refractory lymphomas.
Braftovi and Mektovi, Pfizer, have proprietary cancer drugs in the U.S., Canada and certain emerging markets, witnessed a 65% increase in sales.
Thanks to these positive progress in its oncology portfolio and the seasonal growth of its Covid portfolio sales to $4.1 billion, Pfizer was able to report revenue growth for two consecutive quarters. Revenues for full-year was $63.6 billion, up 12% year-on-year even if the seasonal growth in its Covid portfolio was excluded. Supported by significant developments in its internal medicine and oncology R&D pipeline, the company reiterated revenue guidance of $6.1-640 million in 2026.
Pfizer Ltd surged 9% intraday on Monday and its close range, glittering against a dark backdrop of 1% correction in the wider Nifty 50 index. The optimism twist was approved by the company’s board of directors to establish a market and supply partnership with Mylan Pharmaceuticals Inc.
Under the agreement, the two companies will jointly sell and sell Ativan and Pacitane in India. Given Mylan’s network with super experts in central nervous system therapy, the partnership is expected to help Pfizer enhance its distribution and clinical presence.
Are Pfizer’s correction steps sufficient?
In recognition that it can be seen as indiscriminate acquisitions during the co-acquisition period, Pfizer has shifted its focus to cost reduction over the past few years. Costs were reduced by $4 billion, and debt was cut by $7.8 billion in 2024. This is not at the expense of R&D, which grew by about 6% to $3 billion in the three months ended December 2024.
Dividend expenses continue throughout the year. The company also reaffirms Pfizer’s commitment to growing its oncology portfolio by lifting its oncology head to chief science officer. A new Chief Strategy and Innovation Officer and two new board members have also been formed.
Despite these corrective measures, Pfizer lags behind competition in a difficult regulatory environment. Even if the CDC revised RSV proposal narrows the RSV market in the United States, it loses the RSV vaccine race GSK. It also abandons control of the intestinal control drugs before it can produce fruit.
It also lost its exclusivity in Canada, while some of Pfizer’s major drug trials failed and had to exit the market. In addition, its patents for sale of Eliquis and Prevnar expire in 2026 and are expected to affect more than 10% of its revenue.
The company also owns $10 billion in kittens to further boost inorganic expansion, and its fate is a question of conjecture.
Finally, in terms of macro impact, former U.S. President Joe Biden’s inflation reduction bill has been squeezing profit margins for pharmaceutical companies. Changes in the U.S. presidency have made things worse and the government is expected to fund biopharmaceutical research.
Conspiracy theories in the US around vaccines, the newly appointed US health secretary who holds an “anti-vaccine” view, and a growing resentment of US citizens towards healthcare and insurance industries have also added fuel to the fire. While the president’s and health secretary’s meetings with the who’s who of the pharma industry lend some hope, the US president’s turn is anybody’s guess.
For more analysis of this type, read Profit pulse.
Ananya Roy is the founder of SEBI registered investment advisor Creditull Capital. X: @ananyaroycfa
Disclosure: The author does not hold any shares in the company in question, except SBI Life. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to do their own research and consult a financial professional before making any investment decisions.
