Pfizer's (PFE) COVID Treatment Pill Falls Short

Paxlovid fails to reach primary goal in preventative therapy trial

Pfizer Inc. (PFE), the biotechnology and pharmaceutical company responsible for one of the world's leading COVID-19 vaccines, has announced significant headwinds for its Paxlovid drug. Paxlovid, which is Pfizer's pill for treating COVID-19 and is distinct from the company's vaccine for the disease, has failed to reach its primary goal of reducing risk of COVID-19 infection among adults exposed to the coronavirus via household contact.

Regardless, Paxlovid will likely be among the fastest-selling drugs of all time, with a projected $24 billion in sales for 2022, according to the data analytics company Airfinity Ltd. Paxlovid has shown to be up to 88% effective in reducing the risk of hospitalization or death due to COVID-19 in certain circumstances.

Key Takeaways

  • Pfizer's Paxlovid pill for treating COVID-19 has failed to reduce risk of COVID-19 infection among adults exposed to the coronavirus in a household setting.
  • The drug is highly effective at reducing hospitalization and death risk due to COVID-19 in certain circumstances.
  • Paxlovid is expected to see sales of $24 billion for 2022.
  • The prophylaxis trial results could negatively affect government contracting decisions regarding Paxlovid, but analysts believe that sales potential remains strong.

Potential Impact on Paxlovid Sales

The fact that Paxlovid failed its prophylaxis trial adds to recent reports that some patients have developed recurrent COVID-19 symptoms after completing a treatment course of the drug. However, it is unclear how these developments could affect Paxlovid sales. Bloomberg Intelligence analysts suggested that the data could take away "a small incremental sales opportunity" for future years, at most. Morgan Stanley analysts pointed to a potential negative impact on government contracting decisions due to a more limited addressable opportunity for the drug.

Pfizer has said that patients who see recurring COVID-19 symptoms after completing Paxlovid treatment can take more of the drug. However, current U.S. guidelines cap Paxlovid treatment to five consecutive days. Research regarding the phenomenon of recurrent symptoms is ongoing.

What Happened With Paxlovid's Trial?

In late April, Pfizer announced that its pill to treat COVID-19, Paxlovid, had failed to show a statistically significant reduced risk of infection for adults exposed to the coronovirus via a member of their household, as compared with a placebo.

What Does the Paxlovid Data Mean for Sales Potential?

Paxlovid's recent trial failure may have a negative impact on Pfizer's future government contracts for the drug, although it is difficult to say the scope of the impact. Some analysts expect that the results will have minimal effect on Paxlovid's sales potential, which is viewed as quite strong.

What Is the Impact of the Paxlovid Trial on Investors?

Pfizer shares fell by about 2.2% immediately following the company's announcement about the trial. Shares have dropped by about 30% since peaking in mid-December 2021. However, Pfizer stock has provided a one-year trailing total return of 27.4% as of May 5, far outpacing the broader market over that period.

Article Sources
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  1. Bloomberg. "Pfizer Falls as Covid Pill Fails in Preventive Therapy Trial."

  2. U.S. Food and Drug Administration. "FDA Updates on Paxlovid for Health Care Providers."

  3. Bloomberg. "Pfizer Says Patients Who Relapse After COVID Pill Can Repeat Treatment."

  4. TradingView. "Stock Performance: PFE and S&P 500."

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