Could Pfizer be a millionaire stock?

In the past month, Pfizer (NYSE: PFE) The stock is up more than 20% thanks to enthusiasm that it will be the first company in the world to bring a scientifically validated coronavirus vaccine to market. In addition to helping end the devastating COVID-19 pandemic, the company’s marketing efforts will also generate tens of billions of dollars in potential revenue.

As stocks gain momentum, many investors are wondering if they can get rich from Pfizer stocks with minimal investment. Today, let’s see if this can manifest in reality or become a scenario that skeptics warn about while staying on the sidelines.

A fantastic company

Last month, Pfizer and BioNTechof (NASDAQ: BNTX) The messenger RNA (mRNA) coronavirus vaccine, BNT162b2, has achieved 95% efficacy in late stage, placebo-controlled clinical studies. The vaccine has started being given to patients in the UK and is awaiting EUA from the US Food and Drug Administration (FDA) and European Medical Agency approval. It is the very first vaccine against the coronavirus to enter the market.

By the end of 2020, Pfizer plans to produce 50 million doses of BNT162b2 and increase that number to 1.3 billion by the end of 2021. At a price of $ 19.50 per dose, there is considerable income potential. Aside from this growth catalyst, Pfizer’s core businesses also performed well.

On November 16, Pfizer completed the split of its generics business Upjohn to form Viatris. It was a smart move by Pfizer, as Upjohn has been hampering the company’s bottom line for some time. In the third quarter of 2020, Upjohn’s revenue fell 18% year-over-year as the FDA approved a record number of generics as part of its initiative to fight high drug prices.

Currently, Pfizer’s core business is branded oncology drugs, cardiovascular therapies, anti-infective therapies and biosimilars. In the third quarter of 2020, its biopharmaceutical sales increased 4% from the third quarter of 2019, to $ 10.2 billion. For the full year, the new Pfizer expects to achieve $ 42.4 billion in revenue and $ 2.38 in earnings per share.

By 2025, the company predicts it will be able to grow revenues by more than 6% per year. This excludes potential earnings from BNT162b2.

What are the skeptics saying?

Just because Pfizer has the first-mover advantage with its vaccine doesn’t mean that it will do well. Unfortunately, Pfizer’s vaccine must be stored at temperatures as low as -94 degrees Fahrenheit and diluted before administration. Logistical difficulties lead to the waste of half of the vaccines in the world. Once the vaccines from Pfizer’s competitors are released en masse, governments around the world are likely to favor them, due to their easier means of delivery while offering the same efficacy.

Additionally, Pfizer is only entitled to half of the gross profits of BNT162b2 due to a 50/50 revenue and expense sharing partnership with BioNTech. In addition, the global vaccine market is already highly saturated, with more than 5.7 billion pre-orders. All of these factors combined allow BNT162b2 to provide just over a year of sales for Pfizer. Although some analysts predict the vaccine will hit $ 40 billion in sales over the next few years.

What’s the verdict?

Without a doubt, Pfizer has had remarkable success in promoting a coronavirus vaccine and splitting its business segments to devote its attention to its core biopharmaceutical business. There is certainly money to be made with Pfizer stock, especially given its 3.81% annual dividend yield on top of its growth catalyst.

However, its actions won’t turn small investments into million dollar holdings anytime soon. Right now, the coronavirus vaccine industry is just too saturated, and Pfizer’s cash flow from BNT162b2 is likely to decline sharply after 2022. As more coronavirus vaccines are approved and as the world population will receive it, this market will shrink considerably.

Pfizer is definitely a smart choice for investors looking for a great pharmaceutical stock to hold on to for the long term. However, for those who want to get rich in the short term from coronavirus vaccine developers, I suggest checking out BioNTech instead.