Pfizer and BioNTech Shares Rally After Jointly Developed COVID-19 Vaccine Proves Over 90% Effective

Pfizer and BioNTech said that the first interim efficacy analysis from the phase-3 study found their jointly-developed mRNA-based vaccine candidate to be over 90% effective in preventing COVID-19 among participants, sending shares higher in pre-market trading on Monday.

However, the company said the submission for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration has been planned for soon after the required safety milestone is achieved, which is currently expected to occur in the third week of November.

“We look forward to tolerability and safety details, which have not yet been disclosed. The trial will continue through a final analysis at 164 confirmed cases. The trial has enrolled 43,538 participants to date, and of these, 38,955 had received a second dose as of Nov 8. PR noted that there will be a new secondary endpoint evaluating efficacy based on cases accruing 14 days after the second dose,” said David Risinger, equity analyst at Morgan Stanley.

“Pfizer expects to produce >50M vaccine doses in 2020 and up to 1.3B doses in 2021. We plan to update our financial model; please see Oct 7 report titled “All eyes on COVID vaccine timeline” which includes our published Pfizer vaccine risk-adjusted model,” Risinger added.

Following this announcement, Pfizer shares surged about 14% to $41.4 in pre-market trading on Monday; however, the stock is down about 7% so far this year. Additionally, BioNTech shares climbed over 25% to $115.13 in pre-market trading; the stock is up over 170% so far this year.

Executives’ comments

“The first interim analysis of our global Phase 3 study provides evidence that a vaccine may effectively prevent COVID-19,” said Prof. Ugur Sahin, BioNTech co-founder and CEO. “We will continue to collect further data as the trial continues to enroll for a final analysis planned when a total of 164 confirmed COVID-19 cases have accrued. I would like to thank everyone who has contributed to make this important achievement possible.”

”After discussion with the FDA, the companies recently elected to drop the 32-case interim analysis and conduct the first interim analysis at a minimum of 62 cases. Upon the conclusion of those discussions, the evaluable case count reached 94 and the DMC performed its first analysis on all cases. The case split between vaccinated individuals and those who received the placebo indicates a vaccine efficacy rate above 90%, at 7 days after the second dose,” said Dr. Albert Bourla, Pfizer Chairman and CEO.

“This means that protection is achieved 28 days after the initiation of the vaccination, which consists of a 2-dose schedule. As the study continues, the final vaccine efficacy percentage may vary. The DMC has not reported any serious safety concerns and recommends that the study continue to collect additional safety and efficacy data as planned. The data will be discussed with regulatory authorities worldwide.”

Pfizer Stock Price Forecast

Eight equity analysts forecast the average price in 12 months at $42.88 with a high forecast of $53.00 and a low forecast of $38.00. The average price target represents a 17.80% increase from the last price of $36.40. From those eight analysts, four rated “Buy”, four rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $42 with a high of $48 under a bull-case scenario and $31 under the worst-case scenario. The firm currently has an “Equal-weight” rating on the pharmaceutical company’s stock. Pfizer had its price target upped by investment analysts at SVB Leerink to $43 from $42. The firm presently has a “market perform” rating on the biopharmaceutical company’s stock.

Several other analysts have also recently commented on the stock. Royal Bank of Canada set a $43.00 target price on shares of Pfizer and gave the company a “buy” rating. Truist assumed coverage and set a “buy” rating and a $42 target price on the stock. At last, Atlantic Securities downgraded shares of Pfizer from an “overweight” rating to a “neutral” rating and cut their price target to $39 from $44.

We think it is good to buy at the current level and target at least $53 as 100-day Moving Average and 100-200-day MACD Oscillator signal a buying opportunity.

Analyst Comments

“We project solid growth prospects, and the company’s COVID vaccine candidate offers optionality. Pfizer’s financials and dividend are set to adjust in 4Q20 when it completes the Viatris transaction,” Morgan Stanley’s Risinger added.

“Pipeline execution will be key to investor perception, given late-decade patent expiration exposure.”

Upside and Downside Risks

Risks to Upside: Upside risks are COVID vaccine success, better COVID vaccine data than competitors, core business financial upside, positive pipeline developments, and encouraging strategic action – highlighted by Morgan Stanley.

Risks to Downside: Downside risks are COVID vaccine failure, COVID vaccine underperforms competitors, financial shortfalls, pipeline disappointments, disappointing strategic action, and negative US drug pricing developments.