Pfizer: Will Their Vaccine Be Ready In Time?

 Ticker: PFE

Rating: Overweight

Price Target: $41

Target Date: 12/2021

Industry View: Attractive

Overview:

Pfizer's (PFE) COVID-19 vaccine (BNT162b2) Phase 3 efficacy & safety will have major implications for Pfizer's stock price. Given compelling efficacy signals and no major safety issues to date, we are optimistic about the chances of a potential success in their vaccine.

Magnitude of efficacy will drive timing of the results announcement. The Phase 3 trial design includes four interim analyses. The greater the efficacy, the earlier results could be announced. Recall that Pfizer's CEO Albert Bourla issued an open letter on October 1 stating "we could have vaccine data ready to submit to the FDA by end of the third quarter, in October." Based upon our assumptions, we think Pfizer may be expecting vaccine efficacy >~70% (or success by the second interim analysis). Note that Pfizer has not indicated if it will comment publicly if the trial passes the first interim analysis without demonstrating >~77% efficacy, but we understand the second interim may occur just a few weeks after the first interim given expected event accrual rates.

In addition to Moderna's trials this is something we are watching very closely and believe will be a major catalyst to Pfizer's stock movement.

Pfizer Bonus Content:

In addition to our coverage of Pfizer, you may be wondering to yourself how we anticipate the world returning to normalcy. We offer the following: We believe mask requirements may still exist for an extended period of time post vaccine launch (before herd immunity can be reached). The efficacy of vaccines will help determine how long it will take to reach herd immunity and how long the public may need to wear masks for protection. For example, if the Pfizer and Moderna vaccines offer 70% protection against COVID infection, then for every 100 people vaccinated,30 could still be at risk of disease. But note that vaccination may also offer the benefit of reducing the severity of the disease even if it does not prevent infection. As such, while we can't predict the speed of herd immunity, we do believe that efficacy of the vaccine, is the most important metric to watch and we are hopeful we will get there!