President Joe Biden announced on Jan. 4 that his administration will double its order of Pfizer COVID-19 treatment pills, which will “decrease hospitalizations and deaths” and are “a game-changer” as the country moves forward. Economic repercussions, largely positive, resulted from this announcement.
Pfizer stock rose after the news and was up 1.8% on the morning of Jan. 5.
“Today, I’m directing my team to work with Pfizer to double our order from 10 million to 20 million treatment courses to be delivered in the months ahead. We may need even more. That’s the estimate we need right now. We’ve already placed the largest order in the world; now I’m doubling that order,” Biden said in a speech, according to a transcript.
CNBC reports that Pfizer shares gained 1.5% in the premarket following a Bank of America upgrade to “buy” from “neutral” concerning the stock. The upgrade is based on factors such as the rollout of the oral COVID-19 pill, Paxlovid, as well as significant pipeline investments, according to CNBC.
Pfizer said that collectively, approximately 10 million Paxlovid treatment courses have been accelerated for delivery by the end of June, with the remaining 10 million to follow by the end of September, per a statement.
“With the Omicron variant surging, the availability of and accessibility to treatment options is of utmost importance, as millions of people are being diagnosed with COVID-19 each and every day,” Albert Bourla, chairman and CEO of Pfizer, said in the statement. “With data showing significant reductions in hospitalizations and deaths, along with the potential for Paxlovid to maintain robust antiviral activity against Omicron, we believe this therapy will be an important tool in the fight against COVID-19. We are pleased to be working with the U.S. government to help broaden patient access to this potentially game-changing therapy.”
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Analyst Geoff Meacham wrote that “in 2022 we expect the Pfizer narrative to shift to the benefits of its C-19 success in the form of stepped up pipeline/portfolio investments, especially given >$100B in cash generated to 2025,” Seeking Alpha reports. Meacham noted that his prior neutral view on Pfizer stock was predicated on concerns over patent expirations, but also that Paxlovid should provide sustained revenues and cash flow.
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