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On Monday, Leerink Partners maintained a Market Perform rating on Pfizer stock (NYSE:PFE) while keeping the price target unchanged at $28.00. The stock, currently trading at $21.92, sits near its 52-week low of $20.91, though InvestingPro analysis suggests the stock is undervalued based on its comprehensive Fair Value model. The decision came after Pfizer announced the cessation of development for its oral GLP-1 diabetes treatment, danuglipron, due to concerns over data results. Pfizer disclosed that although the danuglipron dose optimization studies reached their primary goals, the drug’s development was halted following an instance of potential drug-induced liver injury in a participant, which was resolved after stopping the medication.
Pfizer emphasized that the frequency of liver enzyme elevations observed in the safety database for danuglipron, which includes over 1,400 participants, was consistent with approved drugs in the same class. Despite this setback, Pfizer reiterated its strategy to continue evaluating oral drug candidates both internally and through external business development.
During the morning call with sell-side analysts, Pfizer’s management declined to discuss the specific chemical structure of its third-generation oral GLP-1 candidate, which concluded Phase 1 trials in late 2024. However, they confirmed that development of this candidate would proceed. Leerink analysts noted the importance of whether this new candidate is derived from the same backbone as danuglipron, as it could potentially share similar liver risks.
Additionally, Pfizer’s press release mentioned its ongoing Phase 2 development of an oral GIPR antagonist candidate for obesity, known as PF-07976016. With a substantial market capitalization of $124.38 billion and a robust gross profit margin of 74.19%, InvestingPro data reveals Pfizer maintains strong financial health despite recent challenges. InvestingPro subscribers have access to 12 additional key insights about Pfizer’s financial position and growth prospects. This study, titled "A Study to Learn About the Study Medicine Called PF-07976016 in Adults With Obesity," is expected to reach its primary completion in December 2025. The primary endpoint for this study is the percentage change from baseline in body weight. Pfizer also highlighted other early-stage programs in its obesity portfolio.
In light of these developments, Leerink has chosen to maintain its Market Perform rating on Pfizer shares. Despite current market challenges, the company offers a significant dividend yield of 7.85% and has maintained dividend payments for 55 consecutive years, making it an interesting consideration for income-focused investors. For a deeper understanding of Pfizer’s investment potential, InvestingPro provides a comprehensive research report with detailed analysis of the company’s financial health, valuation metrics, and growth prospects.
In other recent news, Pfizer has announced it will halt the development of its obesity drug candidate, Danu, due to a case of drug-induced liver injury. Despite this setback, the company plans to reallocate funds previously designated for Danu’s development, maintaining its overall research and development spending guidance for 2025. Meanwhile, UBS has lowered its price target for Pfizer shares from $28 to $24, citing potential overestimation in sales forecasts for key products like Paxlovid and Comirnaty. Goldman Sachs has also downgraded Pfizer from Buy to Neutral, reducing the price target to $25, reflecting concerns over the company’s near-term prospects and the need for clarity on its mergers and acquisitions strategy.
Additionally, Pfizer’s stock was impacted by President Donald Trump’s announcement of impending tariffs on the pharmaceutical industry, aimed at encouraging drug companies to return operations to the U.S. This move has sparked investor concerns about potential disruptions to the global supply chain and increased costs. Institutional Shareholder Services has advised investors to reject a proposal concerning executive compensation, highlighting a $1 million increase in value for CEO Albert Bourla’s long-term awards, which they argue undermines the company’s pay-for-performance philosophy. Despite these developments, Morgan Stanley (NYSE:MS) has maintained its Equalweight rating for Pfizer, with a price target of $31, following the company’s decision to discontinue Danu.
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