Pfizer Stays Put At Core Xeljanz, Prevnar Launch With Surge In Sales

Pfizer Inc.’s healthcare industry is facing challenges, but the upcoming launches of two key drugs and other new products should allow the company to outperform, according to Raymond James analysts.

“We believe Pfizer has a solid footing going into 2018,” wrote analysts led by Simon Ohanian. “The near-term headwinds are similar to what we’ve seen from large pharma peers and can be fully expected given increased competition, especially in branded generics. The team has a positive view on Xeljanz and Prevnar as peak ex-U.S. sales look robust.”

Pfizer aims to launch a biosimilar to the blockbuster arthritis drug Remicade in May, an accomplishment now considered a breakthrough in the generic biologic drug space, according to the analysts.

“While this is a very large label expansion opportunity (and drug launches are always difficult), we believe this product will prove to be successful based on test results and existing market dynamics,” they said.

The analysts see a number of other new products that could help offset some of the negative impacts of competition. Pfizer has recently submitted for approval a new breast cancer drug known as Inlyta and an immunotherapy treatment to treat lung cancer.

“We believe these launches represent a possible and meaningful shift in Pfizer’s long-term growth trajectory,” the analysts wrote.

For the full year, Pfizer expects earnings per share of $2.40 to $2.50. For the upcoming quarter, it sees earnings per share of $0.76 to $0.78.

“With an announced stock buyback program and a large buyback program still available to Pfizer if needed, we believe there is upside to current consensus,” the analysts wrote.

The analysts have an outperform rating on the stock and $51 price target, a significant premium to where shares currently trade.

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