Pfizer Inc. and its German partner BioNTech will start to supply the UK with their mRNA vaccine from next week after the country was first to approve the COVID-19 treatment. Pfizer shares rose 4.3% and BioNTech jumped almost 8% in Wednesday’s pre-market trading
Pfizer (PFE) and BioNTech announced that the UK’s Medicines & Healthcare Products Regulatory Agency (MHRA) has granted a temporary authorization for emergency use of their BNT162b2 vaccine against COVID-19. This is the first Emergency Use Authorization (EUA) for a COVID-19 vaccine based on a global Phase 3 trial. The two companies said that they expect additional regulatory decisions for approval of their COVID-19 vaccine in the US and Europe to be made this month.
“Today’s Emergency Use Authorization in the UK marks a historic moment in the fight against COVID-19. This authorization is a goal we have been working toward since we first declared that science will win, and we applaud the MHRA for their ability to conduct a careful assessment and take timely action to help protect the people of the UK,” said Pfizer CEO Albert Bourla. “As we anticipate further authorizations and approvals, we are focused on moving with the same level of urgency to safely supply a high-quality vaccine around the world.”
The MHRA’s decision is based on data from the vaccine’s Phase 3 clinical study, which demonstrated a vaccine efficacy rate of 95% in participants without prior SARS-CoV-2 infection and also in participants with and without prior SARS-CoV-2 infection. Efficacy was consistent across age, gender, race and ethnicity demographics, with an observed efficacy in adults age 65 and over of more than 94%. In the trial, BNT162b2 was generally well tolerated with no serious safety issues.
Pfizer and BioNTech (BNTX) have previously signed an agreement to supply a total of 40 million doses to the UK, with delivery scheduled for 2020 and 2021. The two companies confirmed that they have a combined manufacturing network for the potential global supply of up to 50 million vaccine doses in 2020 and up to 1.3 billion doses by the end of 2021.
Shares of Pfizer surged 15% over the past month, taking the year-to-date gain to 6%. From the Street, the stock scores a cautiously optimistic Moderate Buy consensus. That’s based on 4 Buys vs 9 Holds. The average analyst price target stands at $41.31, putting the upside potential at 4.8% over the next 12 months.
Mizuho analyst Vamil Divan, who recently reiterated a Buy rating on the stock with a $44 price target, said that he expects approval and initial administration of the vaccine to high-risk individuals this month.
“The durability of the vaccine’s impact remains outstanding and can only be answered over time, but the initial efficacy appears about as good as could be expected and certainly better than investors (and scientists) had been expecting,” Divan wrote in a note to investors. “We estimate sales of ~ $875M in 2020, ~$7.25Bn in 2021 and then trending down to ~$700M-$800M annually in the outer years of our model.”
“Beyond the numbers, vaccines sales and cash should provide Pfizer with additional options in terms of investing in their business, pursuing acquisition or licensing opportunities, or returning cash to shareholders,” the analyst summed up. (See Pfizer stock analysis on TipRanks)
Meanwhile, BNTX shares plunged 8% on Tuesday after Merrill Lynch analyst Tazeen Ahmad downgraded the stock to Hold from Buy, citing tight competition pressure from other vaccine developers. The analyst believes that the vaccine approval is already priced into the stock’s 237% rally this year and sees limited catalysts for more gains.
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