U.S. Markets closed
  • S&P Futures

    3,651.00
    -9.50 (-0.26%)
     
  • Dow Futures

    29,680.00
    -124.00 (-0.42%)
     
  • Nasdaq Futures

    12,431.75
    -20.50 (-0.16%)
     
  • Russell 2000 Futures

    1,831.90
    -3.60 (-0.20%)
     
  • Crude Oil

    44.14
    -0.41 (-0.92%)
     
  • Gold

    1,813.70
    -5.20 (-0.29%)
     
  • Silver

    23.70
    -0.33 (-1.36%)
     
  • EUR/USD

    1.2083
    +0.0004 (+0.0362%)
     
  • 10-Yr Bond

    0.9340
    +0.0900 (+10.66%)
     
  • Vix

    20.77
    +0.20 (+0.97%)
     
  • GBP/USD

    1.3420
    -0.0003 (-0.0228%)
     
  • USD/JPY

    104.3530
    +0.0370 (+0.0355%)
     
  • BTC-USD

    18,456.73
    -239.45 (-1.28%)
     
  • CMC Crypto 200

    362.71
    -17.15 (-4.52%)
     
  • FTSE 100

    6,384.73
    +118.54 (+1.89%)
     
  • Nikkei 225

    26,821.16
    +33.62 (+0.13%)
     

Pfizer Analyst Says COVID-19-Driven Rally Not Backed By Vaccine Economics

Shanthi Rexaline
·2 min read

Pfizer Inc. (NYSE: PFE) and BioNTech SE – ADR announced an agreement with the U.S. government Wednesday to supply an initial consignment of 100 million doses of the coronavirus vaccine the companies are developing in the event of future emergency use authorization or full approval for the shot. 

US Government Deal Positive For Pfizer: Pfizer's deal is positive for the nation as well as the company, BofA Securities analyst Geoff Meacham said in a note. 

The U.S. government has the optionality to acquire an additional 500 million doses the analyst said. Assuming a two-dose regimen, 600 million doses could cover over 90% of the U.S. population, he said. 

For Pfizer, the vaccine news is a positive development, Meacham said.

That said, the analyst does not see the vaccine programs as being fully derisked is looking ahead to additional data as Phase 3 trials get underway.

Pfizer's Vaccine Economics: At the $20 price point implied by the U.S. government's contract value and assuming a 50-50 gross profit split between Pfizer and BioNTech, Meacham expects the vaccine to be helpful to Pfizer's P&L.

This is especially true as company contends with portfolio risks that include the adjuvant Ibrance failure, recent pipeline programs that failed to stand apart from competition and the Eliquis patent ruling, the analyst said. 

Pfizer shares have added about $30 billion in value since their recent low in June, mainly on COVID-19 news. The valuation implies about 1.5 billion doses sold at the $20 price point, Meacham said. 

To justify the valuation, Pfizer may have to sell about 6 billion doses at a 50% margin, according to BofA — more than the sell-side firm's assumed number of patients treated worldwide through 2030 .

PFE Rating, Price Action: Meacham maintained a Neutral rating on Pfizer with a $38 price target. 

At last check, Pfizer shares were down 0.18% at $38.49. 

Related Links:

Intel, Texas Instruments To Kickstart Chip Earnings With 'Better-Than-Feared' Results

Nvidia Analysts See Multibillion-Dollar Opportunity In Automated Driving Deal With Mercedes-Benz

Latest Ratings for PFE

Date

Firm

Action

From

To

Jun 2020

SVB Leerink

Initiates Coverage On

Market Perform

Jun 2020

JP Morgan

Maintains

Neutral

Apr 2020

Barclays

Maintains

Equal-Weight

View More Analyst Ratings for PFE
View the Latest Analyst Ratings

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.