Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
Tuesday, Pfizer stock maintained its Neutral rating and $24.00 price target from Cantor Fitzgerald, following the announcement of a significant in-licensing deal. Pfizer, currently trading at $23 and maintaining a strong 7.48% dividend yield, has entered into an agreement with 3SBio to acquire a VEGFxPD-1 bispecific, known as SSGJ-707, for an upfront payment of $1.25 billion and potential milestone payments nearing $5 billion. According to InvestingPro analysis, Pfizer appears undervalued based on its Fair Value estimates.
The transaction propels Pfizer into the competitive arena of VEGFxPD-1 therapies, building on a clinical trial collaboration with Summit revealed in February. Despite the deal’s potential, analysts at Cantor Fitzgerald have expressed concerns due to the substantial initial investment and Pfizer’s position behind its competitors. This move comes after Merck (NSE:PROR)’s acquisition of LaNova six months prior, which involved a notably higher upfront payment.
Cantor Fitzgerald’s analysis suggests that Pfizer’s latest strategic step carries considerable risk, hinging on the new drug class surpassing market expectations or SSGJ-707 proving to be the superior product within its category. Currently, there is insufficient data to support either outcome confidently.
The deal also raises questions about Pfizer’s financial flexibility. With the company generating $11.2 billion in levered free cash flow over the last twelve months and maintaining its 55-year streak of consecutive dividend payments, the additional financial burden from this deal may impact Pfizer’s ability to pursue other opportunities. Cantor Fitzgerald’s stance reflects these concerns, suggesting that Pfizer’s margin for error has become even narrower with this latest endeavor. Discover more detailed insights and 8 additional ProTips about Pfizer’s financial outlook with InvestingPro.
In other recent news, Pfizer Inc. (NYSE:PFE) has secured an exclusive licensing agreement with 3SBio Inc. for the development and commercialization of the cancer drug SSGJ-707 outside China. The deal includes an upfront payment of $1.25 billion, with potential milestone payments up to $4.8 billion and tiered double-digit royalties on future sales. Pfizer’s commitment is further underscored by a $100 million equity investment in 3SBio, pending regulatory and shareholder approvals. Meanwhile, CLSA has raised its price target for 3SBio to HK$19.60, citing the partnership with Pfizer and the licensing of SSGJ-707 as key factors. The firm maintained an Outperform rating, reflecting optimism about 3SBio’s financial performance. Additionally, Pfizer Netherlands International Finance B.V., a subsidiary of Pfizer, has received an A2 rating from Moody’s with a stable outlook, indicating confidence in Pfizer’s financial health and product pipeline. This rating considers Pfizer’s robust cash flow and promising opportunities in oncology, immunology, and rare diseases. The recent developments surrounding Pfizer and 3SBio highlight significant strategic moves aimed at expanding their presence in the pharmaceutical industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.