PFE: Has Money, Looking for Buys
Feb 8, 2022 20:00:53 GMT
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Post by icemandios on Feb 8, 2022 20:00:53 GMT
Albert Bourla has some plans for Pfizer's huge Covid cash haul. Hint: 'Acquisitions are very much in the cards'
John Carroll
Editor & Founder
Today was Pfizer CEO Albert Bourla’s chance to relish the market success of its Covid vaccine and drug and what a fresh flow of $54 billion-plus from the pandemic franchise this year can do for the company. First on the list? The BD team is buckling down to pick up the pace for more deals in the year ahead.
This is clearly Aamir Malik’s turn to shine, after taking the BD reins from John Young last summer as he completed a 34-year career run at Pfizer.
“In terms of the top-line, we are going to be incredibly flexible,” Malik told analysts today. “We have said repeatedly that we are most interested in compounds that have the potential to be real breakthroughs. And this can take the form of later-stage clinical development as well as earlier-stage medical innovation.”
Oncology, vaccines, rare diseases and internal medicine are among the core focuses in R&D, and Malik said they’ll continue to be active “where we have the scientific chops to make good scientific choices and add real value.”
“We’re going to be flexible on deal types,” added the BD chief. “Acquisitions are obviously very much in the cards, but strategic partnerships and alliances as well. In fact, some of our best successes have come from capital-light collaborations. If we see a larger opportunity that’s strategic and creates value and meets the criteria I just described, we certainly have the balance sheet to utilize to do that.”
As Zachary Brennan makes clear in his snapshot on the Pfizer numbers today, the unprecedented deluge of revenue has radically changed the numbers for the pharma giant — though even higher expectations blunted Wall Street’s reception of their Q4 numbers update. And it’s clear from the call that Pfizer remains conservative on its revenue projections, especially where Paxlovid comes in, as the number crunchers aren’t ready to speculate on how many new contracts will come through in the months ahead.
The spotlight now is turning to M&A and dealmaking, where Pfizer has some of the deepest pockets in the industry to shell out for a slate of deals between now and the end of the year. That theme, especially as biotech share prices are being hammered mercilessly, is also reflected among Pfizer’s peers as investors look anxiously for someone to save them from a near collapse in biotech valuations.
Pfizer was once one of the leaders in the Big Pharma merger trend, mashing huge organizations into one at considerable cost in terms of layoffs and site closures. But while they’re not limiting themselves on deal size right now, Bourla is clear that this is not the era to try and repeat that.
We are agnostic to size, where we are biased is deals, in order to justify the premiums, where we will have to do considerable cost synergies. These could be very profitable deals for other periods in the history of the company. Not now. Right now the company is having a manufacturing machine that is performing at its best, an R&D machine that is performing at its best, a commercial machine that keeps being the leader in the industry for their ability to execute and deliver. The last thing I want to do is to do a deal where to justify the premium to the other shareholders of the other company, we will have to shut down manufacturing sites and consolidate research sites and consolidate field forces….This is not the time to disrupt the momentum of the company.
Later in the Q&A period, Bourla picked back up on the BD theme, noting that the pharma giant has the pipeline to grow organically. But in order to achieve real high growth, deals will be essential.
Pfizer may be enjoying record numbers, but no one has repealed the law on R&D risk, with 2 programs in dire straights. One of those, PF-07304814, an IV SARS-CoV-2 main protease inhibitor, was intended for severely afflicted patients but failed the ACTIV-3 study run by NIH. Dosing has now ceased and Pfizer noted the program is being discontinued after they had assessed the “totality” of the data.
Pfizer also disclosed that their Phase III study — the JAVELIN lung 100 trial — of Bavencio for first-line treatment of metastatic non-small cell lung cancer compared to chemo failed.
Pfizer noted in its earnings release:
While avelumab showed clinical activity in this population, the study did not meet the primary endpoints of overall survival and progression-free survival in the high PD-L1+ population for either of the avelumab dosing regimens evaluated.
For now, those kinds of speed bumps won’t do much to rattle management. They have enough money to bring in a multitude of replacements. The question now is, which ones will they go after?
John Carroll
Editor & Founder
Today was Pfizer CEO Albert Bourla’s chance to relish the market success of its Covid vaccine and drug and what a fresh flow of $54 billion-plus from the pandemic franchise this year can do for the company. First on the list? The BD team is buckling down to pick up the pace for more deals in the year ahead.
This is clearly Aamir Malik’s turn to shine, after taking the BD reins from John Young last summer as he completed a 34-year career run at Pfizer.
“In terms of the top-line, we are going to be incredibly flexible,” Malik told analysts today. “We have said repeatedly that we are most interested in compounds that have the potential to be real breakthroughs. And this can take the form of later-stage clinical development as well as earlier-stage medical innovation.”
Oncology, vaccines, rare diseases and internal medicine are among the core focuses in R&D, and Malik said they’ll continue to be active “where we have the scientific chops to make good scientific choices and add real value.”
“We’re going to be flexible on deal types,” added the BD chief. “Acquisitions are obviously very much in the cards, but strategic partnerships and alliances as well. In fact, some of our best successes have come from capital-light collaborations. If we see a larger opportunity that’s strategic and creates value and meets the criteria I just described, we certainly have the balance sheet to utilize to do that.”
As Zachary Brennan makes clear in his snapshot on the Pfizer numbers today, the unprecedented deluge of revenue has radically changed the numbers for the pharma giant — though even higher expectations blunted Wall Street’s reception of their Q4 numbers update. And it’s clear from the call that Pfizer remains conservative on its revenue projections, especially where Paxlovid comes in, as the number crunchers aren’t ready to speculate on how many new contracts will come through in the months ahead.
The spotlight now is turning to M&A and dealmaking, where Pfizer has some of the deepest pockets in the industry to shell out for a slate of deals between now and the end of the year. That theme, especially as biotech share prices are being hammered mercilessly, is also reflected among Pfizer’s peers as investors look anxiously for someone to save them from a near collapse in biotech valuations.
Pfizer was once one of the leaders in the Big Pharma merger trend, mashing huge organizations into one at considerable cost in terms of layoffs and site closures. But while they’re not limiting themselves on deal size right now, Bourla is clear that this is not the era to try and repeat that.
We are agnostic to size, where we are biased is deals, in order to justify the premiums, where we will have to do considerable cost synergies. These could be very profitable deals for other periods in the history of the company. Not now. Right now the company is having a manufacturing machine that is performing at its best, an R&D machine that is performing at its best, a commercial machine that keeps being the leader in the industry for their ability to execute and deliver. The last thing I want to do is to do a deal where to justify the premium to the other shareholders of the other company, we will have to shut down manufacturing sites and consolidate research sites and consolidate field forces….This is not the time to disrupt the momentum of the company.
Later in the Q&A period, Bourla picked back up on the BD theme, noting that the pharma giant has the pipeline to grow organically. But in order to achieve real high growth, deals will be essential.
Pfizer may be enjoying record numbers, but no one has repealed the law on R&D risk, with 2 programs in dire straights. One of those, PF-07304814, an IV SARS-CoV-2 main protease inhibitor, was intended for severely afflicted patients but failed the ACTIV-3 study run by NIH. Dosing has now ceased and Pfizer noted the program is being discontinued after they had assessed the “totality” of the data.
Pfizer also disclosed that their Phase III study — the JAVELIN lung 100 trial — of Bavencio for first-line treatment of metastatic non-small cell lung cancer compared to chemo failed.
Pfizer noted in its earnings release:
While avelumab showed clinical activity in this population, the study did not meet the primary endpoints of overall survival and progression-free survival in the high PD-L1+ population for either of the avelumab dosing regimens evaluated.
For now, those kinds of speed bumps won’t do much to rattle management. They have enough money to bring in a multitude of replacements. The question now is, which ones will they go after?
