Shares of Pfizer rose 0.25 percent on Tuesday, and added 0.33 percent more in after-hours trading to $36.36 as the pharmaceutical giant received an authorization from the US Food and Drug Administration for its pneumonia vaccine.
The company has an existing market capitalization of $219.97 at 6.06 billion shares outstanding. Meanwhile, Pfizer stock has been trading in a 52-week range of $28.25 to $36.46.
With the FDA’s approval, Pfizer’s Prevenar 13 is currently the only cure available for all ages in the market. Previously, the pneumonia vaccine has already obtained regulatory clearance for the treatment of pneumococcal disease affecting adults aged 50 and above. Now, Prevenar 13 is allowed to be used on adults aged 18 to 49.
According to Pfizer, the increased age indication more closely regulates the immunization methods for adults aged 19 or over, with the 2012 US Centers for Disease Control (CDC) and Prevention’s Advisory Committee’s directions for patients stricken by numerous serious diseases. The lineup extends from HIV and cancer to other medical conditions such as cerebral spinal fluid leaks and cochlear implants.
"This expanded age indication in adults 18 to 49 offers an important public health benefit as appropriate vaccination against S. pneumoniae is critical to reducing the risk of pneumococcal disease, including in those with immunocompromising conditions," explained Dr. Luis Jodar, Chief Medical and Scientific Affairs Officer for Pfizer Vaccines.
Last year, Prevenar products generated $6.25 billion in gross annual sales, up 40 percent from 2014. The pneumonia vaccine has also been previously certified for children aged 3 weeks to young adults aged 17 years old. The FDA moved to approve it for adults aged 18 to 49 based on the data from a late-stage research in adults who had not been vaccinated for pneumonia in the past.
The Approval for use in a broader age group could provide significant upside for Pfizer revenue as the vaccine is already added in immunization programs in 102 countries. The strength of Pfizer can be seen in several areas such as its revenue increase, steady stock price performance, reasonable valuation levels, growth in net income and good cash flow from operations.
Pfizer Benefits from Opioid Deal
During a meeting to review the opioid epidemic, FDA Commissioner Dr. Robert Califf said that “there’s a lot of sin to go around” and he noted that among the sinners are drug manufacturers.
On that same day, Pfizer inked a contract with the city of Chicago and agreed not to be involved in the kind of marketing that helped boost the epidemic. Chicago Mayor Rahm Emanuel touted a landmark agreement and a huge step toward eliminating the risks of prescription painkillers, which are deemed responsible for over 14,000 deaths two years ago, according to federal health administrators.
Several market analysts believe that in this particular deal, Pfizer is the only sure winner. The agreement was reached after Chicago officials pushed a two-year lawsuit against five drug makers, including Purdue Pharma and Johnson & Johnson, for allegedly enticing the public about the risks of opioids and fueling an increase in city health care costs.
However, Pfizer is not included in the case. The pharmaceutical giant is really a small player in the opioid market. Its lone product generated only $16.6 million in sales, with nearly 28,200 prescriptions in the past year.
A Pfizer spokeswoman said that it is illegal to promote a prescription drug for unapproved uses, and samples should not be dispersed for controlled substances such as opioids.
“Pfizer looks good. They get a lot of public relations points,” a clinical pharmacologist stated. “But when you dissect the agreement, it won’t make any practical difference, unless they shared information with Chicago not in the public domain.”
1. Here’s the best financial news platform. FSM News provides the latest market news. Subscribe Now and get newsletter daily.