Pfizer CEO Albert Bourla helped save the world. Can he save his company’s shares?

The first anniversary of the pandemic has been a whirlwind for the CEO who has defined it. Pfizer’s Albert Bourla conducted several media interviews on Thursday – everything from CNBC and “Morning Joe” to his first television appearance in Israel, the small country where Pfizer is conducting a massive experiment with its Covid-19 vaccine. After the talks, Bourla held a lengthy meeting with the group of scientists, responsible for the manufacture and distribution of Pfizer, responsible for making 2 billion doses of the vaccine available this year. He also spent time reviewing Pfizer’s overall corporate strategy.

The success of Pfizer’s medical breakthrough continues to grow. Earlier this week, Bourla was told that data from Israel showed that the vaccine, invented and co-developed by Germany BioNTech, was 94% effective against asymptomatic SARS-CoV-2 infections two weeks after a second dose. It was another sign that Pfizer’s vaccine is an exceptional tool in the fight against the pandemic. This week Bourla, 59, wearing a blue ‘Science will win’ mask and matching shirt, himself received his second dose of vaccine at Pfizer’s headquarters in Manhattan, after being careful not to cut the line. vaccination.

“It’s been an amazing experience for me,” says Bourla of his final year at the helm of Pfizer. “Mankind has – suddenly without hoping that we would be in this position – invest all its hopes in us. It created enormous pressure.

Bourla and Pfizer have received praise from around the world for what they have accomplished: delivering a breakthrough vaccine against the nightmare virus in less than a year. President Joe Biden recently visited Pfizer’s manufacturing facility in Kalamazoo, Michigan, just to thank the company that developed the first Covid-19 vaccine cleared by the Food and Drug Administration.

“I came here because I want the American people to understand the extraordinary work that is being done to address the most difficult operational challenge this country has ever faced,” Biden said as he stood on a stage in Bourla side.

But there is one group that absolutely disapproves of Pfizer’s efforts to find a scientific solution to the viral plague. Stock market investors simply weren’t impressed. Despite Pfizer’s projection that the vaccine will generate $ 15 billion in revenue this year, Pfizer’s stock is trading at about the same level as on the eve of the pandemic, even as the stock market as a whole. increased. In fact, Pfizer stock is down 15% since Bourla started his run to the top of Pfizer in January 2019.

It is obvious that Moderna has become a darling of the stock market. The small biotech company that developed the second Covid-19 vaccine approved in the United States, using the same cutting-edge technology as Pfizer’s vaccine, has seen its inventory soar 529% during the pandemic. With the Covid-19 vaccine being its only commercial product, Moderna’s $ 56 billion market capitalization now accounts for nearly a third of the valuation value of giant Pfizer. BioNTech, the small German biotech company that is Pfizer’s partner for the Covid-19 vaccine, has also seen its stock skyrocket.

When you help save work from a global public health crisis, you can’t please everyone. “I’m frustrated,” Bourla says. “We deserve to be credited. But the current share price is a huge disappointment. “

When Bourla feels depressed about the issue, he remembers the words of Ian Read, the CEO of Pfizer who came before him, telling Bourla that delivering for shareholders was a marathon, not a sprint. Vaccine development has been a sprint, and Bourla is confident investors will soon understand that Pfizer’s stock is undervalued.

Stock market investors, of course, are not just a group that Bourla needs to pay close attention to these days. With the vaccine, he took on a huge responsibility and it is not easy to manage. The policy of manufacturing and distributing the Pfizer vaccine has been fraught with pitfalls, and Bourla hears from leaders of countries who feel they are not receiving their doses quickly enough. But distributing the vaccine to people who need it could be faster than solving Pfizer’s stock market problems.

Bourla became CEO of Pfizer during a transition period. In November, Pfizer completed the spin-off of its large generics company Upjohn which sells products like Viagra, Lipitor and Lyrica which have become patented. The divestiture was the latest part of a multi-year plan Bourla helped champion to transform Pfizer from a diverse pharmaceutical conglomerate into a scientific innovation company that would live or die on its ability to develop brand new drugs.

Going into the pandemic, Pfizer carefully managed the expiration of the patent for Lyrica, the pain treatment drug that has generated up to $ 5 billion in annual sales. The company was able to continue growing revenue to $ 41.9 billion in 2020 and appears on track to deliver on its commitment to increase revenue by 6% per year through 2026. But Pfizer will lose its patent protection and its commercial exclusivity on drugs that represent up to $ 20 billion. sales in the second half of the decade and that captured the attention of Wall Street. This kind of “patent cliff” is a typical big problem a pharmaceutical CEO faces.

So far, the Covid-19 vaccine has not helped Bourla in this area. Pfizer could end up generating more than $ 15 billion in revenue in 2021 from the vaccine and possibly $ 4 billion in profits. But stock traders don’t care too much about these numbers, even though they are among the largest ever generated by a biopharmaceutical in a single year, as Wall Street doesn’t expect this financial performance to be repeatable.

“That’s all, 15 and next year nothing, that’s the value they give us,” said Bourla. “This is not the case. You can never be sure of these things, but the likelihood of us going to annual revaccinations for Covid seems very high.”

Bourla is right. To both boost the immune response to the virus and protect against variants, it seems very possible that Pfizer and its strong brand of Covid vaccine will be in high demand in the future. And this year, Pfizer charged a pandemic price – $ 19.50 per dose in the United States. That’s a steal compared to the typical cost of a new vaccine, and the post-pandemic price may well be higher. A dose of Merck’s HPV vaccine, Gardasil, costs over $ 200.

Nonetheless, what Bourla relies on to be reproducible is the speed, focus and agility the company has brought to the virus vaccination effort. If the pandemic was a test of the new Pfizer, the company has passed with flying colors. There are other reasons for optimism as well. The company’s Vyndaqel and Vynamax brands, used to treat a rare disease leading to heart failure, saw sales increase 170% to $ 1.3 billion last year and show great promise. The experimental drug abrocitinib, an experimental treatment for atopic dermatitis, is expected to produce $ 3 billion and could be approved by the FDA in a matter of weeks. Pfizer’s application for its latest pneumococcal conjugate vaccine, the backbone of its huge vaccine business, received priority review from the FDA for potential approval for adults by June.

In total, the company has paved the way for $ 15 billion in new revenue by 2025, and that doesn’t include what Bourla hopes to do in vaccines with the now proven messenger RNA platform, on which the Covid-19 vaccine is based. . Even without mRNA, he’s generally excited about what Pfizer can accomplish with some of its experimental vaccines, ranging from preventing the dangerous scourge of Clostridium difficile infections to Lyme disease and the tragic respiratory syncytial virus infection in human beings. babies Pfizer hopes to prevent by immunizing pregnant women. the mothers.

There will be setbacks. Last year, Pfizer’s hit metastatic breast cancer drug Ibrance failed a key clinical trial in early breast cancer, but Bourla believes Pfizer also strategically planned those kinds of disappointments.

“What excites me the most about our pipeline is that it’s very diverse, it’s not one or two things that are the big hitters,” Bourla says.

There’s been a lot of talk on the boards of corporate America about contributing to sustainability and social impact, not just turning $ 1 of shareholder value into $ 10. Bourla took the step. His company has produced a vaccine that contributes to sustainability and social impact in spades. He is convinced that, for a biopharmaceutical company, service to patients, society and shareholders must be symbiotic and he is determined to prove it.

“The biggest misconception about the pharmaceutical business model is that whatever is good for shareholders is bad for patients. In fact, the reverse is true, ”says Bourla. “In the current model of the pharmaceutical industry, one that has been developed over the past decade, and one that is clearly evolving even further, there is no way for shareholders to see value unless patients don’t see real tangible value.