Why Pfizer’s future looks brighter in 2021

Despite the success of its COVID-19 vaccination program, Pfizer (NYSE: PFE) did not impress investors with its stock market performance last year. This may change in the future, however. In this Motley Fool Live video recorded Jan. 13, 2021, Corinne Cardina, chief health and cannabis bureau, and Fool.com writer Keith Speights discuss why Pfizer’s future is brighter in 2021.

Corrine Cardina: Let’s talk about its stock, so the biggest difference between those we talked about Modern, BioNTech: Pfizer has a dividend. Its dividend is currently earning 4.2%.

Keith, you actually wrote an article about Pfizer as an investment, I will be posting it in the chat for everyone, but can you tell us why Pfizer was so flat in 2020 despite this huge, exciting news and what? what do you think about it for 2021?

Keith Speights: Yeah, like you said, Pfizer really fell apart in 2020. The stock hasn’t gone down much, but it hasn’t done much either.

The main reason behind this was that Pfizer had conducted two disappointing clinical studies on Ibrance, their breast cancer drug. They were really hoping to expand Ibrance’s opportunities in the early stage breast cancer market. The studies simply failed.

Again, we are talking about risk and even big companies like Pfizer run into these issues. So they were very disappointed and therefore the investors were very disappointed. That was the big problem.

I think there was also concern that Moderna’s vaccine might outperform Pfizer in the market because of some of the ultra-cold storage requirements of Pfizer’s vaccine. I think it was a lesser factor.

Then there was just the problem that Pfizer didn’t produce very good numbers throughout 2020, mainly because they were being dragged down by declining sales of Lyrica, which was discontinued there. not that long ago and sales were dropping rapidly, and that just held them back.

But the reasons I think this year could be better, first of all, is that, as we just talked about, Pfizer created the Upjohn unit, which housed Lyrica and many other drugs that see their sales. lower. Pfizer created this, it is now part of a totally different company. Pfizer ends up with all of these blockbuster drugs we’ve talked about in these exciting pipelines.

So they have a lot more reason to grow up now. The company expects it to generate an average annual profit growth of around 10%. Again, we come back to precision, but they still see potential profit growth of 10% over the next few years. It’s much better than what they did.

They envision revenue growth in the order of 6%, and that’s risk-adjusted. This could be better than if their pipeline candidates turn out even better than they expect, but then they have a lot of money coming from their COVID vaccine. We were talking about $ 14 billion on the low end, they will receive about half of it.

So they have this other great blockbuster that’s already on the market in the United States and other countries. They have two big decisions from the FDA ahead, one for an osteoarthritis drug, tanezumab, which could easily be a blockbuster. They expect the FDA to make a decision in June on their new 20-valent pneumococcal vaccine that succeeds Prevnar 13. It could be a blockbuster. Look, Pfizer has a lot of growth opportunities, this stock could be a buy now.