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: As COVID vaccine and Paxlovid sales decline, analysts want to know what’s next for Pfizer

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Pfizer
PFE,
-2.20%

is the latest pandemic stock to face questions about its long-term strategy as revenue from its COVID-19 vaccine and antiviral business starts to dry up. 

Bank of America analysts on Wednesday downgraded the stock to neutral from buy, citing the anticipated drop in revenue in the company’s COVID portfolio in 2023 and uncertainty that future product launches will make up for lost revenue.

“Pfizer has done a very good job at expanding the late-stage portfolio internally and from BD/M&A and has a number of exciting new launches in migraine, RSV, ulcerative colitis, and hematology/oncology on the horizon,” the analysts wrote in an investor note. “That said, these products and others in the Phase 3 pipeline could take years to contribute to the P&L, at a time when the COVID franchise is likely to be in persistent decline.”

Pfizer’s shares were down 1.7% in trading on Wednesday. The stock closed at $51.26 on Tuesday, a 16% decline since its pandemic peak of $61.25 on Dec. 21, 2021. 

The pharmaceutical giant transformed itself from a legacy drugmaker to a leader in the pandemic, first by developing Comirnaty, the COVID vaccine, with BioNTech
BNTX,
-1.70%

in 2020 and then Paxlovid, an antiviral pill that people with COVID can take at home. But as the intensity of the pandemic has waned — and booster uptake remains low — that’s going to mean significantly less revenue in Pfizer’s COVID franchise.

The Bank of America analysts predict a total of $32 billion in revenue in 2023 for Comirnaty and Paxlovid. The vaccine is on track to generate $33.7 billion in revenue in 2022, while Paxlovid sales are expected to come in around $22.1 billion for the year, according to the FactSet consensus. That’s an estimated $55 billion in COVID revenue last year.

Pfizer knew it would have a shortfall to make up for. The company went on a lavish M&A spree last year, notably buying Biohaven Pharma for $11.6 billion and Global Blood Therapeutics for $5.4 billion. It also set up new collaborations, like the one announced in December with Oric Pharmaceuticals Inc. 
ORIC,
-3.51%

to develop a multiple myeloma treatment and another to develop an RSV treatment with ReViral Ltd.

That said, the analysts said that categories like multiple myeloma and RSV are and are expected to be crowded with competitors, making it harder for new therapies to differentiate themselves.

Pfizer’s stock is down 7.7% over the past 12 months, while the SPDR S&P Pharmaceuticals ETF
XPH,
+1.47%

declined 11.5$

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