Pfizer’s Covid-19 Vaccine Could Be Authorized by October, Analyst Says - Barron's

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Pfizer hopes to obtain emergency-use authorization from the Food and Drug Administration for its Covid-19 vaccine, produced in partnership with BioNTech, in October—a timeline that’s possible, and not the only positive for the biotech company, according to a Mizuho analyst.

Mizuho senior health-care analyst Vamil Divan discussed Pfizer’s (ticker: PFE) timeline for drug approval on a Wednesday call with Barron’s readers. “[Pfizer] talked about maybe having some interim data that could be sufficient for an emergency approval in the October time frame,” Divan said.

Judging by the data needed to approve Gilead Sciences (GILD) treatment remdesivir for emergency use, “it’s probably possible to see something approved [in] October, or certainly by the end of the year,” the analyst said.

Investors shouldn’t view Covid-19 vaccine development as a zero-sum game, Divan added, pointing to Pfizer’s contract with the U.S. government to supply 100 million doses later this year. “For Pfizer’s vaccine specifically, it’s a two-shot series. So that’s 50 million people that they potentially cover later this year into early next year,” Divan said.

That will fall short of the number of doses needed to vaccinate the entire U.S. population, let alone the rest of the world, he said, leaving room “for many of these companies to get their products to market and make an impact.”

While Divan says he expects at least one—and possibly multiple—vaccines to be available by next year, their rollout will likely be staggered, with the first doses going to health-care workers, first responders, and those at the highest risk of complications from the disease. “By the second half of the year, there might be enough supply out there to really get to go out to the masses,” he said.

Pfizer’s other major effort, a breast-cancer treatment, has been closely watched by investors. Disappointing news in June about a trial involving the drug, Ibrance, caused the stock to fall. Since then, the stock has recovered, in large part due to Pfizer’s vaccine news, but Divan says there’s more to like about Pfizer than its vaccine program.

“We do think there are other parts of the Pfizer story that are interesting, beyond the Covid vaccine and beyond the breast-cancer drug immunology space,” he told Barron’s readers, echoing a point from a note the analyst released Wednesday. “We believe Pfizer’s overall pipeline (beyond the COVID-19 vaccine) is being underappreciated, but fundamental investors we have spoken to in recent weeks seem less convinced that the event will provide reasons for increased enthusiasm on the overall story,” the report stated.

Beyond Pfizer, Divan spoke about AbbVie (ABBV), another one of his top picks, during the call. AbbVie acquired Allergan, the maker of Botox, last summer. Despite an immediate downturn in the aesthetics business following the arrival of the pandemic, “now we’re seeing that the demand is really there, people do still want to get these treatments,” he said.

While there is still uncertainty about whether patients will return, the aesthetics market recovered quickly after the 2008-09 financial crisis, Divan said. “We’re expecting something similar here, later this year or maybe more into next year or [2022],” the analyst said, adding that aesthetics is “simply a small part of the company.”

The analyst rates both Pfizer and AbbVie stocks Buy, with price targets of $43 and $111, respectively. Pfizer is trading around $38 today, and AbbVie shares fetch $95.08. Both stocks have high dividend yields, Divan noted, with Pfizer yielding 4% and AbbVie yielding 4.9%, according to FactSet.

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Pfizer’s Covid-19 Vaccine Could Be Authorized by October, Analyst Says - Barron's
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