Pfizer, Inc.: The pharma game-changer

written on December 15, 2020

Perhaps most well-known for its erectile dysfunction medication Viagra, US global pharmaceutical giant Pfizer, has made several breakthroughs along the years, altering patients’ lives for the better. Boasting several blockbuster products and much sought-after shelf space in pharmacies and households, it has become one of the largest pharmaceutical companies across the globe, landing on the Fortune 500 list. In recent years, the company has experienced a number of challenges ranging from legal settlements over marketing practices of its products to stiff competition from other heavyweights like the likes of Johnson & Johnson and some of its medication coming off patent. Yet, Pfizer has nonetheless forged ahead.

As several countries are afflicted by a second wave of the COVID-19 pandemic and much of the world has turned once again into becoming home-bound recluses, Pfizer - which is currently in the lead for being the first drugmaker to post successful results from crucial trials of a potential vaccine - has dominated the headlines, driving the stock market to surge and bringing hope to all.

A brief history of Pfizer

With a diversified global healthcare portfolio that includes medicines and vaccines for sectors such as immunology, oncology, cardiology, endocrinology and neurology, as well as major blockbuster medications such as Lipitor, Xanax, Diflucan, Zithromax and Viagra amongst others, the making of Pfizer has an impressive history spanning more than 171 years.

Founded in 1849 in New York by cousins Charles Pfizer and Charles Erhart who were both German immigrants to the US, the two men - one a chemist and the other a confectioner - set up what was initially a fine chemicals business. The first product they developed and sold was santonin, a major treatment for intestinal worm which was a common affliction at the time. Merging Pfizer’s skills as a chemist and Erhart’s training as a confectioner, the product was made to taste like toffee, transforming it into a palatable medication. Their combined efforts paid off and the medication became a huge success, setting the pace for the company’s future development.

Within 10 years, Pfizer was importing a range of chemicals such as mercurials, boric acid, tartaric acid and others, while it played a crucial role during the American Civil War, when it was able to provide iodine, morphine, chloroform and tartar. As the business grew at a breathtaking rate, Pfizer reached $1.4 million in sales by 1865. Following the war, the company continued to focus on both medicines and industrial chemicals, powering brands like Coca Cola and Dr Pepper by producing the citric acid needed for these beverages.

Pfizer also saved many lives during both World Wars. As World War I brought about a shortage of calcium citrate, Pfizer chemists discovered a fungus that could ferment sugar to citric acid, paving the way for its commercial production and boosting the company’s knowledge and expertise in fermentation technology. Twenty or so years later, during World War II, Pfizer was the only company at the time producing penicillin. Thanks to its deep-tank fermentation that boosted its efforts to mass-produce the medication, it became the world’s largest producer of what has been touted as a miracle drug.

The 1950s saw the company expand even further into antibiotics with the production of Terramycin which became its first pharmaceutical to be sold in the US under the Pfizer label, while its success saw the company expand beyond the US, establishing itself in places such as Brazil, Canada, Cuba, Mexico, Panama, Puerto Rico, England and Belgium. At the same time, it established an agricultural division featuring a 7-acre farm and research facility exclusively dedicated to crafting cutting-edge solutions to animal health problems.

Throughout the next decades, Pfizer rolled out a number of top selling medications such as Vibramycin, Feldene, Zoloft and Zithromax to name a few. But perhaps one of its most well-known blockbusters came in the 1990s in the form of a little blue pill and the name Viagra. Originally produced as an anti-hypertension medication, Pfizer scientists realised that it had the power to treat erectile disfunction, becoming the fastest selling drug in history, so much so that within three months of its launch, Pfizer pocketed $400 million, while over the past two decades, it has consistently generated $1.8 billion in annual sales.

Today Pfizer operates through its Primary Care, Speciality Care, Oncology, Emerging Markets, Established Products, Consumer Healthcare, Nutrition and Animal segments and employs over 88,000 individuals. As the race for a COVID-19 vaccine heated up, Pfizer made headlines for sealing a deal with the US government for 100 million doses, while Japan has agreed to purchase 120 million doses and the UK signed on for 30 million doses. More recently, it made waves once more, when in November 2020, it announced that its COVID-19 vaccine has proven to be 90% effective after it was tested on 43,500 people.

Fun fact

Did you know that Viagra has had other uses other than to treat erectile dysfunction? For instance, sildenafil sold under the brand name Viagra among others, has been used to treat pulmonary hypertension in adults, while thanks to Viagra’s ability to widen the blood vessels inside the lungs allowing them to function more efficiently, the medication has been given in tiny doses to premature babies to get them off ventilators faster.

Pfizer goes public

Pfizer went public in June 1942, offering 240,000 shares of its common stock to the public.
The pharma giant has split its stock five times since its IPO. Shares underwent a 2-for-1 split four times, in 1983, 1991, 1995 and 1997 respectively, while the last split took place in 1999 with a 3-for-1 split. This means that for every Pfizer share owned pre-split, a shareholder would now own 2 shares following the 2-for-1 splits and similarly, after the 3-for-1 split, for every share owned pre-split, a shareholder would now own 3 shares.

So is Pfizer stock a buy?

Pfizer has experienced moderate growth over the past five years which led to its stock being dropped from the Dow Jones Industrial Average in August. However, following the news that its vaccine is over 90% effective in preventing COVID-19, its shares rose more than 15% in one trading session.

Pfizer’s genius for developing winning drugs since its inception has greatly benefited long-term shareholders. Its top sellers in 2019 have been the pneumonia vaccine Prevnar 13 which inched up 1% to $5.85 billion in revenue, the anticoagulant Eliquis that brought in $4.22 billion and the cancer treatment Ibrance which generated $4.96 billion in sales.

Regardless of its COVID-19 vaccine success or failure, the company’s robust pipeline which includes medication to fight cancer, inflammation and immune disorders among other things, a 32% revenue increase over the past five years from its oncology sector and at a $220 billion market cap with a dividend yield of 4.11%, Pfizer’s stock could offer potential gains both in the near and long-term.

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