Pfizer (PFE) stock continues trending sideways after announcing promising updates for two cancer drugs, but also shutting down a gene therapy program.
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In one study, multiple myeloma patients who received Pfizer’s Elrexfio lived for 24.6 months, at the median. Another study tested Adcetris against chemotherapy in patients with a form of lymphoma. The Adcetris group lived for a median of 13.8 months compared to 8.5 months for the chemo group.
But the news did little to help Pfizer stock. Pfizer also shut down its study of a gene therapy for children with a muscle-wasting disease known as Duchenne muscular dystrophy. Neither the primary goal of the study, nor secondary goals, met the bar for success.
In other news, Pfizer beat first-quarter expectations thanks to a one-time benefit from its Covid drug, Paxlovid. Pfizer is also tacking on new drug approvals. The Food and Drug Administration signed off on Tivdak, a alongside Seagen, for patients with recurrent or metastatic cervical cancer.
U.S. regulators also approved Pfizer’s gene therapy for hemophilia B, Beqvez. It will cost $3.5 million for a one-time treatment. And European regulators gave Pfizer the nod for Emblaveo, a treatment for some bacterial infections that resist other drugs.
But Pfizer stock hit its lowest point since January 2013 in April. Shares have risen about 11% since then, as of the close on July 1. So, is PFE stock a sell right now?
Pfizer Stock Fundamentals: ‘Massive’ Upside
Leerink Partners analyst David Risinger said there was “massive” upside in Pfizer’s first-quarter report.
Adjusted earnings fell 33% to 82 cents per share, but walloped expectations for 51 cents, according to FactSet. Sales also tumbled 20% to $14.88 billion, but topped forecasts for $13.87 billion.
As expected, sales of Comirnaty, the Covid shot Pfizer developed with BioNTech (BNTX), plummeted 88% to $354 million. Sales also missed projections for $446.5 million. Excluding the impact from Paxlovid and Comirnaty, total sales rose 11%. Analysts polled by FactSet expect Comirnaty sales to hit annual low points each second quarter.
Vyndaqel proved to be a bright spot in the quarter. Sales skyrocketed 66% to $1.14 billion, topping calls for $895.2 million. Vyndaqel treats cardiomyopathy due to hereditary transthyretin-mediated amyloidosis. In this condition, abnormal protein builds up on the heart tissues, causing problems.
But sales of migraine treatment Nurtec came in at $178 million, up just 7% and below forecasts for $316.5 million.
For the second quarter, Pfizer stock analysts forecast earnings of 45 cents per share and $13.07 billion in sales. Earnings are expected to dive 33%. But sales are expected to edge 2.6% higher. This could be the first quarter of sales growth since the fourth quarter of 2022.
Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth. Pfizer is not hitting those marks. Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
Pharmaceutical Company’s Annual Metrics
Pfizer’s sales have fallen markedly since hitting a record in 2022. Last year, sales tumbled 42% to nearly $58.5 billion. Top sellers included Comirnaty and Paxlovid, which brought in a $11.22 billion and $1.28 billion, though sales tumbled a respective 70% and 93% year over year.
Blood thinner Eliquis generated $6.75 billion in sales, up 4% on a strict, as-reported basis. Prevnar sales inched 2% ahead to $6.44 billion.
But other key products saw downfalls. Revenue from Xeljanz, which treats inflammatory conditions, fell 5% to $1.7 billion. Sales of Enbrel, developed with Amgen (AMGN), toppled 17% to $830 million. Pfizer sells Enbrel outside the U.S. and Canada.
For 2024, Pfizer expects adjusted earnings of $2.15 to $2.35 per share and $58.5 billion to $61.5 billion in sales. At the midpoints, earnings would climb more than 22% as sales rise almost 3%.
Pfizer Stock And Recent News
The recent study of Elrexfio shows “compelling overall survival data,” Roger Dansey said in a statement. Dansey is Pfizer’s chief development officer for oncology.
Pfizer tested Elrexfio in patients with relapsed or refractory multiple myeloma. This means the cancer has returned following treatment or isn’t susceptible to other treatments. Overall, patients lived for a median of 24.6 months, and their disease didn’t worsen for a median of 17.2 months.
In another study, Pfizer tested its Seagen-acquired drug, Adcetris, in patients with diffuse large B-cell lymphoma. This is the third type of lymphoma in which Adcetris has had an overall survival benefit.
But the gene therapy study was a pockmark for Pfizer stock. The company scrapped its study after the Duchenne muscular dystrophy treatment failed to improve motor function in boys age 4 to 7. Boys are more likely to have Duchenne.
Secondary goals, including 10-meter run/walk and time to rise from the floor also didn’t meet the bar for success. Pfizer’s dropout means Sarepta Therapeutics (SRPT) has one fewer competitor for its newly approved gene therapy, Elevidys.
Technical Analysis: PFE Stock Tops 50-Day Line
Pfizer stock is trading just below its 200-day moving average. Shares dipped below their 50-day line on June 17 and 18, MarketSurge shows. On July 2, shares were trading in line with that mark. It’s important to note that shares are not forming a chart pattern for investors to watch.
On April 18, shares hit their lowest point since January 2013.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a Composite Rating of 35 out of a best-possible 99. The measure weighs a stock’s key growth metrics against all other stocks. Leading stocks tend to have Composite Ratings of 95 or better, according to IBD Digital.
Pfizer stock has a Relative Strength Rating of 27 out of a best-possible 99. The RS Rating measures a stock’s 12-month running performance against all other stocks. That RS Rating means Pfizer stock ranks in the bottom 27% of all stocks in terms of performance over the last year.
The pharmaceutical company’s EPS Rating, a measure of profitability, is 33 out of a best-possible 99. The EPS Rating compares a stock’s recent and longer-term earnings growth against all other stocks.
Is PFE Stock A Sell?
Based on savvy rules of investing, PFE stock isn’t a sell right now. Shares briefly dipped below their 50-day line, but are now trading in line with that mark. But shares also aren’t a buy right now.
Pfizer stock still has to prove its fundamental and technical merit. Also, shares aren’t forming a chart pattern with a clear entry for investors, despite recently regaining ground and topping their 50-day moving average.
It will be important to watch how Pfizer stock performs as the company shores up its pipeline and seeks new approvals in its efforts to move beyond the astronomical growth it saw at the height of the pandemic. Though it has a booster Covid shot, like rivals Moderna (MRNA) and Novavax (NVAX), analysts don’t expect sales to ever hit their pandemic-era growth.
Instead, the Street is closely watching the adult RSV vaccine, which hit the market at the same time as a competitor from GSK (GSK). Pfizer’s efforts now that it owns Seagen could also be key to future growth.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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