Pfizer investors stand to benefit further from COVID-19 pill development

Wealth advisor at Ideal Portfolio Services Dwayne Taylor said shareholders of drug maker Pfizer stand to reap gains from the development of the company’s COVID-19 pill.

Last week the pharmaceutical giant announced that it had created the pill that cuts COVID-19 hospitalisations and deaths in high-risk patients by 89 per cent. Under one per cent of the 1,219 unvaccinated adults in the study, who received the drug, Paxlovid, within three days of getting sick, ended up in hospital. None of the recipients died.

Pfizer’s pill for COVID-19, Paxlovid, cut hospitalisations and deaths in high risks patients by 89 per cent. (Photo: kalilahreynolds.com)

The dramatic result has the potential to alter the course of the pandemic as a pill that can be taken at home at the first sign of symptoms could effectively tame the COVID-19 crisis globally.

After the announcement the company’s shares surged 11 per cent on Friday, which Taylor said could be an indication that investors are betting that the pill will be a game-changer for the world. He said investors will be looking forward to more capital gains, especially with the pill shaping up not to be an expensive option.

“We will just see how it plays out but they are playing high right now based off the performance,” he said.

Pfizer’s announcement last week came after another pill, produced by Merck, received its first regulatory approval in the UK. Merck’s treatment, however, reduced hospitalisations by only 50 per cent. Paxlovoid, on the other hand, could receive authorisation in early 2022.

“Obviously, they are going to take advantage of this increased interest in their products and take advantage of the publicity of them having a somewhat better option in the market, but it will be interesting to see how it will play out because at the end of the day it’s down to the consumer,” he said.

Merck’s COVID-19 pill (Photo: AFP)

Taylor cautioned that while the company has seemingly taken a win with the pill, there are those who are still cautious about the efficacy of its COVID-19 vaccine, which could still impact the performance of shares.

Global investors are also betting that the highly effective pill will also reduce demand for COVID-19 vaccine overall and cause sell-offs in international markets. At least one vaccine maker in China saw shares falling after Pfizer’s pill announcement.

“It’s very interesting but the pill is not to say that Pfizer is the better option, because people have to be objective and some still have their perceptions,” he said.

“Each of these pharmaceutical giants have had different issues in the past, so as much as Pfizer may be having an excellent quarter, there are still people out there with apprehensions to taking their vaccine,” he added.

Pfizer’s pill announcement came on the heels of its third-quarter results which saw revenues jumping some 134 per cent from US$10.27 billion to US$24.09 billion.

According to Taylor, the COVID-19 vaccine, Comirnaty, would have contributed significantly to those numbers, raking in roughly US$13 billion by itself. Up to October 31, the company had produced 2.6 billion doses of the vaccine with 2 billion distributed worldwide.

Pfizer vaccine (Photo: AP)

Taylor said the data suggests that take-up of the vaccine has been strong even as some countries, like Jamaica, struggle to negotiate supplies to increase vaccination rates. Children 12-17 are currently being prioritised for the Pfizer vaccine in Jamaica.

The vaccine had become the first to be approved by the US Food and Drug Administration (FDA). The vaccine was also recently approved for children as low as five years old in the United States by the FDA and the Centers for Disease Control and Prevention.