Pfizer raises outlook after strong second quarter results
American pharmaceutical company Pfizer performed better than expected in the second quarter, mainly due to its corona vaccine co-developed with BioNTech. Pfizer has therefore raised its outlook for the remainder of this year. For the long term, the pharmaceutical company develops new drugs, which will be supplemented by the acquisition of Trillium Therapeutics.
In the second quarter of this year, Pfizer saw its annualized operating revenue rise with 86 percent to USD 19 billion. Excluding the corona vaccine (BNT162b2), which Pfizer developed with the German company BioNTech, the operational revenue growth in the second quarter would be significantly lower at 10 percent to USD 11,1 billion. Pfizer's adjusted earnings per share rose 72.6 percent to USD 1.07 over the same period. The American pharmaceutical company has raised its outlook for the entire 2021 fiscal year. Where Pfizer previously assumed annual sales of USD 70.5 to USD 72.5 billion, the pharmaceutical company is now counting on a revenue between USD 78-80 billion. Adjusted earnings per share for the full year were initially assumed at USD 3.55 to USD 3.65. Pfizer now expects adjusted earnings per share between USD 3.95 and USD 4.05.
Corona vaccine predominates
When the new outlook will be achieved, the corona vaccines that Pfizer has co-developed with BioNTech will contribute approximately USD 33.5 billion to the total annual revenue, if 2.1 billion vaccines are delivered. The prospects for an increasing demand for the vaccine are looking promising at this moment. For example, the corona vaccine from Pfizer and BioNTech was officially approved by the US Food and Drug Administration (FDA) at the end of August for use on children as young as 16 years old. This approval once again underlines the worldwide confidence in the vaccine. Meanwhile, Pfizer is also working on a study into the effectiveness of the vaccine on children between the ages of 5 and 11. The first results of this research have turned out to be very positive. At the beginning of October, the European Medicine Agency (EMA) recommended that people with a severely weakened immune system should be given a third shot or so-called booster shot. It is also currently being investigated whether a booster shot is also necessary for people with a weaker or normal functioning immune system. The demand for Pfizer’s and BioNTech’s corona vaccine will therefore remain high.
Pfizer offers more than corona vaccines
Although sales from corona vaccines will account for nearly half (42 percent) of total annual revenue, this year Pfizer is also working on its other successful drugs. For example, the pharmaceutical company is developing a flu vaccine that is now in its third study phase. In addition, Pfizer is known for a well-known drug that works as a blood thinner and medication for the treatment of cancer. The patents on these drugs are likely to expire in the coming years. To overcome this problem, Pfizer recently acquired Canadian pharmaceutical company Trillium Therapeutics. This mainly strengthens Pfizer's oncology activities, where Trillium Therapeutics offers various drugs for the treatment of blood cancer, amongst others. The acquisition is worth USD 2.26 billion. This acquisition is expected to actively contribute to the revenue growth from 2026, the same year in which several key Pfizer patents expire.
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Stock price development
Since mid-July, Pfizer's share price has surged above USD 50. Since then, the price has fallen again and is now (07.10.2021) at USD 42.74. On an annual basis, the share price is still more than 21 percent higher.
The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.
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