Pfizer, a global pharmaceutical giant, has witnessed a significant decline in its stock price over the past year. From its peak of $57 in December 2021, the stock has plummeted by more than 50%, reaching a three-year low in November 2023. This dramatic downturn can be attributed to a confluence of factors, including weakening sales, patent expirations, and concerns over the company’s long-term growth prospects.
One of the primary reasons for Pfizer’s stock woes is the declining revenue from its COVID-19 vaccine and treatment products. Comirnaty, Pfizer’s mRNA vaccine, has been a lifeline for the company, generating billions of dollars in revenue during the pandemic. However, as vaccination rates have plateaued and booster shots become less frequent, demand for Comirnaty has waned. Similarly, sales of Paxlovid, Pfizer’s oral COVID-19 treatment, have also fallen due to reduced demand and increased competition from generic alternatives.
In addition to the diminishing COVID-19 revenue stream, Pfizer is facing patent expirations for several of its blockbuster drugs, including Eliquis, an anticoagulant, and Xeljanz, an arthritis treatment. The loss of exclusivity for these drugs will allow generic competitors to enter the market, eroding Pfizer’s pricing power and further squeezing its profit margins.
Furthermore, investors are growing concerned about Pfizer’s ability to replace its declining COVID-19 revenue with new growth drivers. The company’s pipeline of new drugs and therapies faces significant uncertainty, and there is no clear successor to Comirnaty in sight. This lack of a clear growth strategy is weighing heavily on investor sentiment.
Amidst these challenges, Pfizer has taken steps to address investor concerns. The company has announced share buybacks to return capital to shareholders and has made strategic acquisitions to bolster its pipeline. However, these measures have failed to halt the stock’s downward trajectory, reaching a record low of $28.62 on December 1st, suggesting that investors remain unconvinced about Pfizer’s long-term prospects.