What happened
Pharmaceutical company Pfizer (PFE 0.65%) saw its shares rise 10.3% in March according to data from S&P Global Market Intelligence. The stock opened the month at $46.69 and rose to a high of $55.30 on March 21, before closing the month at $51.77. Pfizer's move didn't stem from one announcement, but rather was a steady rise based on several developments.
So what
The biggest news for Pfizer in March was that the Food and Drug Administration (FDA) had expanded the Emergency Use Authorization for Pfizer's COVID-19 vaccine to be used as a second booster shot. The vaccine, known as Comirnaty and developed in collaboration with BioNTech, can be used as a second booster shot for adults 50 and older who had previously received a first booster of any authorized COVID-19 vaccine. The FDA also gave its approval for a second booster dose for individuals 12 and older who are immunocompromised and had received an earlier booster shot.
That's good news for Pfizer because Comirnaty accounted for $36.8 billion in revenue in 2021, approximately 45% of the company's total revenue in the year and more than any other therapy the company produced. An additional booster shot means the company will likely see good revenue numbers from the vaccine for at least a few more quarters.
Another big development was tied in when the company completed its $6.7 billion purchase of Arena Pharmaceuticals. The clinical-stage biotech specializes in therapies to treat various immune-inflammatory conditions and has a lead drug, etrasimod, that is being studied to treat ulcerative colitis (UC) and atopic dermatitis.
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On March 11, Pfizer announced that it had completed the deal to buy Arena. Less than two weeks later, it made the first of two announcements regarding positive top-line results from two phase 3 studies on etrasimod to treat UC. The therapy met the primary and secondary endpoints in the two studies and showed a favorable safety profile; Pfizer said it expects to submit regulatory filings for the drug later this year. Estimates of what the drug could bring in annually range from $1 billion to $2.5 billion.
Now what
Pfizer nearly doubled its revenue last year, pulling in $81.3 billion, a year after it had $41.7 billion in revenue. It will be hard for the healthcare stock to do that again. However, investors are encouraged that the windfall that the company's COVID-19 franchise brought Pfizer will pay off in other ways as well. The addition of Arena Pharmaceuticals appears likely to pay off and makes sense as it dovetails with Pfizer's other immunology and inflammation blockbusters that include Xeljanz and Enbrel, which brought in $2.5 billion and $1.2 billion last year, respectively.
The company's 89-drug pipeline, which includes 27 in phase 3 trials, also can benefit from extra research and development spending that the company can afford, thanks to a successful 2021.
