How Much Revenue Could Pfizer's Oral COVID-19 Pill Fetch?

Pfizer, Inc. PFE announced Wednesday its oral COVID-19 antiviral pill, Paxlovid, has been authorized for use by the U.S. Food and Drug Administration.

The Pfizer Analysts: SVB Leerink analyst Geoffrey Porges has a Market Perform rating and a $52 price target for Pfizer.

BofA Securities analyst Geoff Meacham maintained a Neutral rating and a $59 price target.

Broad Label, Increased Supply To Give Pfizer Dominant Market Position: Pfizer received the nod for the oral COVID-19 treatment ahead of Merck & Co., Inc. MRK, which submitted its application for its molnupiravir more than a month ahead of Pfizer, Porges said in a note.

The analyst sees the increase in Pfizer's expected supply of Paxlovid to 120 million courses next year as significant. The company will sell and distribute most of these courses, resulting in revenue well in excess of SVB Leerink's current forecast of $24 billion in Paxlovid sales in 2022 and $33 billion in 2023, the analyst said.

Revenue contribution will drop to $10 billion in 2024, the analyst said. This total $67 billion in Paxlovid sales estimated for 2022-'24 is well above consensus, he added.

The expansion of Paxlovid's use to teens is a positive surprise, given Pfizer's Phase 2/3 EPIC-HR study was conducted only in patients aged 18 or older, Porges said.

The impact of drug-drug interactions on Paxlovid uptake will be modest since many of the drugs on the list can be paused for the short duration of Paxlovid treatment without significant impact for patients, Porges said. Patients that will likely be excluded from Paxlovid use are those with severe liver or renal impairment and those who have uncontrolled HIV-1 infection, he added.

The drug label also didn't preclude pregnant women from Paxlovid treatment and painted a risk/benefit profile that was relatively benign compared to Merck's molnupiravir, which showed embryonic development and fetal growth risks in animals, the analyst said.

Paxlovid has a better efficacy profile than some leading antibody therapies, and with some of the antibody therapies having lost efficacy against the omicron variant, Paxlovid will be a "highly attractive option for physicians and patients," Porges said.

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Paxlovid Should Remain A Steady Contributor, BofA Says: There should be no problem selling every course of Paxlovid Pfizer makes in 2022, BofA analyst Meacham said. The lag time between production and shipping/revenue recognition means Pfizer won't recognize the revenue from every dose in 2022, he added.

Longer-term, Paxlovid is likely to remain a steady contributor, the analyst said.

"We expect breakthrough infections to continue regularly in the endemic phase, and while a baseline level of immunity from vaccines and prior infections will limit severity, we expect treatment of COVID cases as they occur in high-risk individuals to be standard of care," Meacham said.

Government entities are expected to stockpile Merck's pill and so initial sales will likely be there, the analyst said. Longer-term, Paxlovid will likely be the preferred agent, he added.

Pfizer Price Action: Pfizer shares were slipping 1.36% to $58.74 Thursday afternoon at publication.

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