Pfizer Drops GLP-1 Weight Loss Drug Candidate Amid Competitive Setback
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy PFE?
Source: Fool
- Development Setback: Pfizer recently dropped its internally developed GLP-1 weight loss drug candidate, resulting in a loss of competitive edge in the rapidly growing drug market, particularly against early leads from rivals Novo Nordisk and Eli Lilly.
- Dividend Appeal: With a dividend yield of 6.2%, significantly higher than the S&P 500's 1.1% and the average pharmaceutical sector's 1.7%, Pfizer's management has committed to maintaining dividends despite a payout ratio exceeding 100%, appealing to long-term investors.
- Agility in Response: Following the GLP-1 setback, Pfizer quickly pivoted by engaging in acquisitions and distribution partnerships, demonstrating its ability to adapt in a highly competitive pharmaceutical landscape.
- Valuation Attractiveness: Pfizer's price-to-sales, price-to-book, and forward P/E ratios are all below their five-year averages, and combined with its high dividend yield, this suggests the stock is attractively valued, even though improvements in business performance may take several years.
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Analyst Views on PFE
Wall Street analysts forecast PFE stock price to rise
16 Analyst Rating
5 Buy
11 Hold
0 Sell
Moderate Buy
Current: 26.860
Low
24.00
Averages
28.56
High
35.00
Current: 26.860
Low
24.00
Averages
28.56
High
35.00
About PFE
Pfizer Inc. is a research-based, global biopharmaceutical company. The Company is engaged in the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide. Its Biopharma segment includes the Pfizer U.S. Commercial Division, and the Pfizer International Commercial Division. Its product categories include oncology, primary care and specialty care. Its oncology products include Ibrance, Xtandi, Padcev, Adcetris, Inlyta, Lorbrena, Bosulif, Tukysa, Braftovi, Mektovi, Orgovyx, Elrexfio, Tivdak and Talzenna. Its primary care products include Eliquis, Nurtec ODT/Vydura, Zavzpret, the Prevnar family, Comirnaty, Abrysvo, FSME/IMMUN-TicoVac, Nimenrix, Trumenba, and Paxlovid. Its specialty care products include Xeljanz, Enbrel (outside the United States and Canada), Inflectra, Abrilada, Cibinqo, Litfulo, Eucrisa, Velsipity, the Vyndaqel family, Genotropin, BeneFIX, Xyntha, Somavert, Ngenla, Hympavzi, Sulperazon, Zavicefta, Octagam and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pfizer Drops GLP-1 Weight Loss Drug Candidate Amid Competitive Setback
- Development Setback: Pfizer recently dropped its internally developed GLP-1 weight loss drug candidate, resulting in a loss of competitive edge in the rapidly growing drug market, particularly against early leads from rivals Novo Nordisk and Eli Lilly.
- Dividend Appeal: With a dividend yield of 6.2%, significantly higher than the S&P 500's 1.1% and the average pharmaceutical sector's 1.7%, Pfizer's management has committed to maintaining dividends despite a payout ratio exceeding 100%, appealing to long-term investors.
- Agility in Response: Following the GLP-1 setback, Pfizer quickly pivoted by engaging in acquisitions and distribution partnerships, demonstrating its ability to adapt in a highly competitive pharmaceutical landscape.
- Valuation Attractiveness: Pfizer's price-to-sales, price-to-book, and forward P/E ratios are all below their five-year averages, and combined with its high dividend yield, this suggests the stock is attractively valued, even though improvements in business performance may take several years.
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- National Security Consideration: Section 232 covers products that may threaten national security, and Trump's defense of the pharmaceutical tariffs under this provision indicates that his policies could have far-reaching implications for the operations and cost structures of pharmaceutical companies.
- Pharma Response Strategy: Many pharmaceutical companies have negotiated a three-year tariff exemption with the White House, in exchange for providing some medicines at discounted rates through the TrumpRx website and increasing domestic manufacturing, demonstrating their adaptability in the face of policy uncertainty.
- Involved Companies List: Companies such as Pfizer (PFE), Eli Lilly (LLY), and Novo Nordisk (NVO) are part of this agreement, indicating a collaborative response within the industry that may influence future market competition dynamics.
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- Acquisition-Driven Growth: Following its acquisition of Seagen, Pfizer's bladder cancer drug Padcev has achieved over 10% growth, generating more than $1 billion in annual revenue, demonstrating the company's strategic focus and market potential in oncology.
- Weight Loss Market Opportunity: Pfizer's acquisition of Metsera positions it in the rapidly growing weight loss drug market, expected to approach $100 billion by the end of the decade, with its candidate's monthly dosing research potentially enhancing its competitive edge.
- Revenue Growth Momentum: Recent product launches and acquisitions have contributed to over $10 billion in revenue for Pfizer, a 12.4% increase year-over-year, with plans to meet cost-saving goals by year-end and reinvest $500 million in R&D, showcasing strong growth potential.
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Pfizer Drops GLP-1 Weight Loss Drug Candidate Amid Competitive Setback
- Development Setback: Pfizer recently dropped its internally developed GLP-1 weight loss drug candidate, resulting in a loss of competitive edge in the rapidly growing drug market, particularly against early leads from rivals Novo Nordisk and Eli Lilly.
- Dividend Appeal: With a dividend yield of 6.2%, significantly higher than the S&P 500's 1.1% and the average pharmaceutical sector's 1.7%, Pfizer's management has committed to maintaining dividends despite a payout ratio exceeding 100%, appealing to long-term investors.
- Agility in Response: Following the GLP-1 setback, Pfizer quickly pivoted by engaging in acquisitions and distribution partnerships, demonstrating its ability to adapt in a highly competitive pharmaceutical landscape.
- Valuation Attractiveness: Pfizer's price-to-sales, price-to-book, and forward P/E ratios are all below their five-year averages, and combined with its high dividend yield, this suggests the stock is attractively valued, even though improvements in business performance may take several years.
See More
Trump's Threat of Pharmaceutical Tariffs Persists Despite Supreme Court Ruling
- Tariff Threat Persists: Despite the Supreme Court ruling that Trump lacks the authority to impose 'reciprocal' tariffs, the threat of pharmaceutical tariffs remains due to their enactment under Section 232 of the Trade Expansion Act of 1962, which is unaffected by the ruling and could significantly impact the pharmaceutical industry.
- National Security Consideration: Section 232 covers products that may threaten national security, and Trump's defense of the pharmaceutical tariffs under this provision indicates that his policies could have far-reaching implications for the operations and cost structures of pharmaceutical companies.
- Pharma Response Strategy: Many pharmaceutical companies have negotiated a three-year tariff exemption with the White House, in exchange for providing some medicines at discounted rates through the TrumpRx website and increasing domestic manufacturing, demonstrating their adaptability in the face of policy uncertainty.
- Involved Companies List: Companies such as Pfizer (PFE), Eli Lilly (LLY), and Novo Nordisk (NVO) are part of this agreement, indicating a collaborative response within the industry that may influence future market competition dynamics.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, indicating a shift in market sentiment that could influence investor decisions and market trends.
- Overview of Updates: While specific upgrades and downgrades are not detailed, the overall rating changes may prompt investors to reassess their holdings, potentially affecting trading volumes and price fluctuations of the related stocks.
- Expected Market Reaction: Analyst rating adjustments typically trigger immediate market responses, and investors should monitor these changes to timely adjust their investment strategies and capitalize on potential market opportunities.
- Information Access: Investors can access a comprehensive view of rating changes through Benzinga's analyst ratings page, aiding them in making more informed investment decisions.
See More
Market Dynamics and Investment Opportunities Analysis
- Blue Owl Capital Loan Sales: Blue Owl Capital's loan sales are part of a plan to return capital to investors, and while observers have raised 'canary in the coal mine' warnings regarding mispriced private credit loans, the situation does not appear tragic, potentially offering market opportunities.
- Weak U.S. GDP: The preliminary fourth-quarter U.S. GDP growth came in at just 1.4%, significantly below expectations, with the government shutdown likely dragging on growth, leading to market concerns about future economic recovery challenges.
- Texas Roadhouse Strong Performance: Texas Roadhouse shares rose over 3% in early trading, as the market overlooked a weak fourth quarter due to a strong start in Q1, indicating sustained consumer demand for dining despite ongoing beef inflation challenges.
- Klarna's Disappointing Earnings: Klarna reported a wider-than-expected net loss for the quarter, and its fiscal 2026 outlook fell short across key metrics, prompting JPMorgan and UBS to cut their price targets to $20, reflecting market concerns about its future performance.
See More
Moderna Faces Patent Lawsuit from BioNTech Over COVID-19 Vaccine
- Patent Infringement Lawsuit: BioNTech has filed a lawsuit against Moderna in Delaware federal court, alleging that its COVID-19 vaccine mNEXSPIKE infringes on BioNTech's patent related to its rival product Comirnaty, highlighting escalating legal disputes among vaccine manufacturers.
- Patent Details Revealed: The lawsuit cites Patent No. 12,133,899, which covers a streamlined messenger RNA vaccine design that BioNTech claims to have discovered while developing Comirnaty with Pfizer, underscoring its innovation in vaccine development.
- Revenue Impact Estimate: According to the lawsuit, Moderna's mNEXSPIKE vaccine is expected to account for 55% of its vaccine revenue during the 2025/26 respiratory virus season, indicating that this lawsuit could pose a significant threat to Moderna's future revenue.
- Legal Response Statement: A Moderna spokesperson stated that the company is aware of the lawsuit and will actively defend against these claims, demonstrating its legal defense strategy, although BioNTech has not yet responded to the matter.
See More
Pfizer Navigates Transition to New Growth Phase
- Vaccine Revenue Decline: Pfizer generated over $37 billion from its coronavirus vaccine in 2022, but as demand wanes and older blockbuster drugs face patent expirations, the company is forced to reassess its revenue structure to adapt to market changes.
- Acquisition-Driven Growth: Following its acquisition of Seagen, Pfizer's bladder cancer drug Padcev has achieved over 10% growth, generating more than $1 billion in annual revenue, demonstrating the company's strategic focus and market potential in oncology.
- Weight Loss Market Opportunity: Pfizer's acquisition of Metsera positions it in the rapidly growing weight loss drug market, expected to approach $100 billion by the end of the decade, with its candidate's monthly dosing research potentially enhancing its competitive edge.
- Revenue Growth Momentum: Recent product launches and acquisitions have contributed to over $10 billion in revenue for Pfizer, a 12.4% increase year-over-year, with plans to meet cost-saving goals by year-end and reinvest $500 million in R&D, showcasing strong growth potential.
See More
