Pfizer Analysts See 'Surprisingly Strong' Vaccine Updates In Q2, Question Biopharma's Blockbuster Potential

Pfizer Inc. PFE reported forecast-beating second-quarter results Tuesday and raised its full-year guidance.

The beat-and-raise quarter — and an update on its coronavirus vaccine program — sent the biopharma's shares higher by 3.94%.

The Pfizer Analysts: BofA Securities analyst Geoff Meacham maintained a Neutral rating on Pfizer with a $38 price target.

Cantor Fitzgerald analyst Louise Chen maintained an Overweight rating and $53 price target.

SVB Leerink analyst Geoffrey Porges has a Market Perform rating and $42 price target.

Barclays analyst Carter Gould maintained an Equal-weight rating and $35 price target.

UBS analyst Navin Jacob maintained a Neutral rating and increased the price target for Pfizer shares from $37 to $39.

Mizuho Securities analyst Vamil Divan maintained a Buy rating and $38 price target.

BofA Questions Pfizer's Ability To Deliver Blockbusters: Most major Pfizer products — namely Prevnar, Ibrance, Eliquis and Vyndaqel — reported sales ahead of estimates, BofA analyst Meacham said in a note.

The earnings beat was achieved on the back of lowered cost of goods sold and R&D expense, the analyst said. 

The COVID-19 impact was quantified as $500 million in the second quarter, he said. 

Although near-term headlines have been positive for the stock, Meacham said he's skeptical of Pfizer's ability to deliver blockbusters from the pipeline, especially during the patent cliff in 2026 and beyond. 

A COVID-19 vaccine may not fully offset these concerns, according to BofA. 

Cantor Says Pfizer Shares Headed Higher: Pfizer can meet or exceed its five-year CAGR target of at least 6% for revenue, Cantor analyst Chen said. This is above the industry average of 4%, the analyst said. 

Sales growth should be driven by solid execution and innovation, he said. 

Upward earnings revisions and multiple expansion could help move Pfizer shares higher, Chen said.

"PFE beat FactSet estimates for key brands including: Ibrance, Xeljanz, Eliquis and Prevnar, which should remove a near-term overhang on shares."

See also: The Week Ahead In Biotech: Spotlight On GW Pharma, Ultragenyx FDA Decisions, Pfizer Earnings

Pfizer Vaccine Performance Surprisingly Strong, Says SVB Leerink: Pfizer's second-quarter beat was driven by strong oncology sales and lower-than-expected operating expenses, SVB Leerink analyst Porges said.

The company raised biopharmaceutical sales guidance by $100 million and EPS guidance by 3 cents, the analyst said. 

"Interestingly, most of the key clinical trial progressions highlighted on the quarter were in the vaccine business (apart from BNT-162b), and the performance of the unit was surprisingly strong given COVID effects." 

Pfizer One Of The Better Biopharma Q2 Prints, Barclays Says: Pfizer's second quarter was one of the better results seen in the biopharma sector so far, despite the COVID-19 related headwinds, Barclays analyst Gould said.

The second-quarter print was overshadowed by the news of the company selecting a lead coronavirus vaccine candidate, the analyst said 

In the near-term, the stock could continue to trade on updates with read-through to BNT162b2's probability of success, the COVID-19 vaccine commercial paradigm and potential contracts likely to take shape in the EU, he said. 

Gould named the following as near-term catalysts for Pfizer: 

• An Eliquis patent ruling expected in the first week of August. 
• Updates across the Phase 2/3 COVID-19 trial with BNT162b2, ahead of a potential approval as soon as October. 
• Phase 1/2 data on 'b2 expected in the coming weeks. 
• Closing of Upjohn-Mylan NV MYL transaction in the fourth quarter.

Barclays raised its 2020 and 2021 revenue and EPS estimates for Pfizer. 

Takeaways On Pfizer's Q2 From UBS: Pfizer management appears confident that there will be enough events in its COVID-19 vaccine timelines by late September/early October, UBS analyst Jacob said.

This is despite expert opinions that fall readout timelines might be aggressive, the analyst said. 

If recruitment is slower, the company anticipates only a delay of one to two weeks, he said.

Regarding the surprising choice of 162b2 for Phase 3 trials instead of 162b1, Pfizer's Head of Research Dr. Dolsten said in elderly patients, 162b2 induced neutralizing antibodies that "well exceeded" convalescent plasma levels with no sign of Th2 activity, and potentially better durability of neutralizing antibodies vs. 162b1, according to UBS. 

In comments on the rare disease drug Vyndaqel, Pfizer said the  diagnosis rate increased to about 15%, driven by awareness efforts, with about 6,000 patients on the drug in second quarter, Jacob said.

PFE Price Action: At last check, Pfizer shares were down 1.06% at $38.60. 

Related Link: Here's How Much Investing $1,000 In Pfizer Stock Back In 2010 Would Be Worth Today

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