Pfizer Inc. (NYSE:PFE) 3 Year Growth Plan: Should You Buy the Stock?

Pfizer Inc. (NYSE:PFE) missed analysts’ estimate for second quarter revenue amid a declining demand for its rheumatoid arthritis treatment Enbrel and pneumonia vaccine Prevnar. Pfizer Inc. (NYSE:PFE) sales came in at $12.9 billion, missing the estimate of $13.08 billion. Revenue from Enbrel plummeted over 19% in the quarter to reach just $617 million. The decline was mainly due to the tough competition from biosimilars like Abbvie’s Humira and a biosimilar versions of Enbrel made by Biogen Samsung BioLogics.

Pfizer Inc. (NYSE:PFE) flagship drug Viagra is under intense pressure and things will get worse in the future, as Viagra’s patent will expire in 2020. In the second quarter, Viagra sales totaled to $359 million. In the third quarter, revenue from the erectile dysfunction drug is expected to drop to $351 million. This is because the market now has a Viagra competitor, known as Cialis, which is made by Eli Lilly (LLY).

But despite the bad news from the second quarter, it should be noted that a massive turnaround is brewing at Pfizer. Pfizer Inc. (NYSE:PFE) CEO Ian Read said in the earnings call that his company is expected to get approvals of about 20-25 drugs, 15 out of which have the potential to be “blockbusters”. Read’s claim isn’t unfounded. Pfizer recently posted positive results from a phase 3 trial of a biosimilar of Roche’s Avastin. The biosimilar is for the treatment of non-squamous non-small cell lung cancer (NSCLC). The opportunity for Pfizer Inc. (NYSE:PFE) is huge. Last year, Avastin was the second biggest drug, with total sales of $7 billion. There are over 220,000 new lung cancer patients expected only in the US in 2017. If Pfizer Inc. (NYSE:PFE) gets an approval for its biosimilar, the stock will soar to new highs.

Pfizer is also working on PF-06410293, a Humira biosimilar. The company also had huge success in the development of Rituxan biosimilar. Rituxan is a blood cancer treatment made by Roche. Both Humira and Roche as blockbuster drugs, have sales of billions of dollars annually.

Pfizer spent a whopping $1.7 billion (14% of revenue) on its pipeline in the second quarter, which is one of highest pipeline spending in the pharmaceutical industry.

On Wednesday, BMO Capital Markets increased its price target on Pfizer to $37. BMO analyst Alex Arfaei said that Pfizer “appears” to have the potential for blockbuster opportunities in the pipeline which would pay off by 2020. The analyst said that Pfizer will get several years of revenue growth after the launch of these blockbuster drugs.

Pfizer Inc. (NYSE:PFE) is up by 2.92% since the start of this year.

Free books, reports and subscriptions...