pfizer stock

Pfizer stock was trading lower in US pre-market price action today amid the fall in the broader markets. The company has filed with the FDA for full approval for Paxlovid, its anti-COVID-19 pill. It has also landed a multi-billion-dollar deal with the US government to supply COVID-19 vaccines.

In 2021, Pfizer’s COVID-19 vaccine became the first COVID-19 vaccine to have received a full FDA approval. Later Moderna’s vaccine also got full FDA approval. Paxlovid currently has conditional approval in over five dozen countries. The pill has helped reduce hospitalizations at a time when new COVID-19 cases continue to be reported around the world.

Notably, the COVID-19 vaccine and Paxlovid have been key cash flow drivers for Pfizer. If the FDA provides full approval to Paxlovid, Pfizer would be able to market and advertise the product. Also, the pill can then be commercially available at pharmacies. Currently, the pill is bought by the US government and offered to patients. The federal government has bought 1.6 million Paxlovid pills so far and has committed to buying 20 million of these.

If Paxlovid gets full FDA approval, Pfizer might also be able to secure approvals in other countries. Meanwhile, some have been doubting Paxlovid’s efficacy. Notably, Dr. Anthony Fauci has reportedly had a rebound of COVID-19 symptoms after taking Paxlovid.

In its release, Pfizer said, “Data from our clinical development program, coupled with the more than 1.7 million patients around the world who have been prescribed our oral treatment to date, reinforce PAXLOVID as an important treatment option for mild-to-moderate COVID-19 in patients at greater risk of progression to severe symptoms, regardless of vaccination status. We look forward to working with the FDA toward full regulatory approval for PAXLOVID.”

Pfizer Announced a $3.2 Billion Deal with the US government

Yesterday, Pfizer signed a $3.2 billion deal with the US government to supply 105 million COVID-19 vaccines. The company said that these may also include Omicron-adapted COVID-19 vaccines, provided they are approved by the FDA. The deliveries would begin in late summer and last until the end of 2022.  The federal government has the option to buy another 195 million doses and take the total to 300 million.

Commenting on the transaction, Pfizer’s CEO Albert Bourla said “As the virus evolves, this new agreement will help ensure people across the country have access to vaccines that may provide protection against current and future variants.”

Defensive stocks have outperformed in 2022

Defensive stocks, including pharma companies, have outperformed in 2022. Pfizer stock is down around 13% in the year, which is less than the fall in S&P 500. However, there has been a terrible sell-off in growth names and stay-at-home companies. Peloton stock has fallen to a new low amid concerns over its business. In the electric vehicle space also, where stocks were flying high until about a year back, there has been a massive sell-off.

NIO stock has also fallen amid the turmoil. The stock fell further yesterday after a short-seller accused the company of accounting fraud, which the company denied.

Some analysts have been advising pivoting towards defensives and favor buying stocks like Pfizer. Pharma companies generally don’t see much disruption in business during a recession, whose probability has been rising amid the Fed’s rate hikes. Pfizer’s dividend yield of 3.1% is also higher than the S&P 500’s yield. Jim Cramer advised investors to seek solace in dividend stocks amid the market turmoil.

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