According to the full-year financial report released last month, Pfizer's full-year revenue reached US$63.6 billion, a year-on-year increase of 7%. As the non-COVID product lines Vyndaqel, Eliquis, and the newly acquired product Seagen have all achieved good market performance, more key regulatory decisions and Phase III trial results are expected in 2025. According to the trend at the end of 2024, the global pharmaceutical market is expected to continue to grow in 2025, and the market size may exceed US$1.5 trillion, mainly driven by emerging markets (such as China and India) and innovative therapies (such as biologics, gene therapy). Leading companies such as Pfizer occupy an important position. The company will also increase investment in research and development.
Data from February showed that Pfizer's shareholder return rate over the past three years was negative 34%, partly due to a decline in COVID-19-related revenue and intensified market competition. Wall Street analysts believe that Pfizer urgently needs to rely on new product lines to reverse the decline in its stock price.
A year-and-a-half-long vaccine patent dispute may come to an end
On March 5, the Düsseldorf Court in Germany formally ruled that Pfizer and BioNTech infringed Moderna's new crown vaccine patent and required disclosure of relevant profits and compensation.
Comirnaty, a COVID-19 vaccine developed by Pfizer and BioNTech, is one of the first mRNA vaccines approved in the world, while Moderna's Spikevax is also based on mRNA technology. These two vaccines have saved countless lives during the pandemic and brought billions of dollars in revenue to the three companies. Now that the effects of the COVID-19 pandemic have faded, the ownership of the intellectual property rights of mRNA technology has sparked a fierce dispute.
This patent lawsuit was launched in multiple jurisdictions, forming a global legal game from the United States to Europe, and the origin of this patent lawsuit can be traced back to the epidemic period. On August 26, 2022, Moderna filed a patent infringement lawsuit against Pfizer and BioNTech in the Federal Court of Massachusetts, USA and the Regional Court of Düsseldorf, Germany. Moderna claimed that Comirnaty of Pfizer and BioNTech infringed its three core patents applied for between 2010 and 2016. These patents cover key innovations in the field of mRNA technology, such as chemical modification, full-length spike protein encoding, and lipid nanoparticle (LNP) delivery system.
Pfizer and BioNTech insist that their vaccine is based on BioNTech's proprietary technology and is not plagiarized. They countersued in December 2022, asking the court to rule that Moderna's patents are invalid on the grounds that they are "overbroad" and cover "basic concepts" that were disclosed as early as 2015.
Moderna said it would not seek to ban the sale of Comirnaty or compensation for sales in low-income countries, but would only demand royalties for commercial activities in high-income markets. This stance shows that it wants to protect intellectual property rights but does not want to be seen as hindering the popularization of vaccines.
In August 2023, Pfizer and BioNTech applied for an "inter partes review" to the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO), questioning the validity of two Moderna patents, claiming that they were based on "prior art" such as mRNA research in the 1990s and literature in 2004. In May 2024, the European Patent Office (EPO) upheld the validity of a key Moderna patent (EP949), which was a victory for Moderna. Until March 5, the Düsseldorf Court in Germany once again ruled that Moderna's new crown vaccine was infringed.
Both technical and commercial progress
Vepdegestrant, a breast cancer drug developed by Pfizer and Arvinas, achieved very effective results in the Phase III VERITAC-2 trial. The drug significantly prolonged progression-free survival (PFS) in patients with estrogen receptor 1 (ER1) mutations, becoming the first PROTAC protein degrader to show clinical benefit in a phase III trial. This is seen in the industry as a major breakthrough for Pfizer in oncology and may bring new hope to patients with ER+/HER2- metastatic breast cancer. Pfizer plans to share data with regulators and advance registration applications in 2025.
At the same time, generative AI is gradually being integrated into all aspects of the pharmaceutical industry. The purpose of applying artificial intelligence technology is to improve the efficiency of drug research and development, reduce costs, and accelerate the launch of new drugs. A Deloitte study shows that a leading biopharmaceutical company with annual revenue between $65 billion and $75 billion could create up to $5 billion to $7 billion in new value if it continues to expand its AI deployment over five years. The market expects that 30% of new drugs will be discovered through AI by 2025.
In order to make up for the loss of revenue caused by various patent issues, pharmaceutical companies are actively seeking mergers and acquisitions for strategic cooperation in another business way. As we mentioned earlier, Pfizer acquired Seagen for $43 billion at the end of 2023 in order to strengthen its layout in the field of antibody-drug conjugates. In addition, Pfizer is also working with gene editing company Beam Therapeutics to advance novel in vivo base editing projects, planning to spend up to $1.3 billion to develop treatments for rare diseases.
At least until 2025, Pfizer's growth may rely more on existing products and new drug approvals, and it is difficult for us to see disruptive breakthroughs in the short term. In the long run, if the cancer therapy goal is achieved in 2030, Pfizer may be able to return to its peak, but this requires time and execution. Therefore, let us use a cautious and optimistic attitude to closely monitor the progress of their R&D pipeline, but before that, there is no need to rush to adjust our investment expectations for Pfizer. After all, even if the potential that can be associated is expected, the prospect of a quick return in the short term is almost zero.
