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Investing.com - Pfizer (NYSE:PFE) stock gained after Bernstein analyst reiterated a Market Perform rating with a $30.00 price target on the pharmaceutical giant following its acquisition of obesity biotech Metsera. According to InvestingPro analysis, Pfizer is currently trading below its Fair Value, with a P/E ratio of 12.75x and an attractive dividend yield of 7.15%.
The $7.3 billion acquisition values Metsera at $4.9 billion upfront ($47.50 per share) with up to $22.50 in contingent value rights (CVRs), representing a 42% premium to Metsera’s closing price on Friday.
Bernstein views the deal positively, noting that Metsera’s development stage is mature enough that Pfizer won’t be left too far behind competitors in the obesity treatment space. Early data for Metsera’s compounds MET-097 and MET-233 shows competitive efficacy, with Metsera offering pipeline flexibility through combinations, oral formulations, and potential manufacturing advantages.
The acquisition uses just over half of Pfizer’s $13 billion business development capacity, leaving approximately $5.7 billion in remaining firepower. The deal will increase Pfizer’s leverage ratio to approximately 3.0x, exceeding its previous 2.7x target.
While Bernstein indicates the acquisition doesn’t completely solve Pfizer’s pipeline challenges, it makes the company "a much more credible obesity player than yesterday," with the firm expecting a positive market reaction to the deal.
In other recent news, Pfizer Inc. has reaffirmed its commitment to transparency regarding its COVID-19 vaccine research. This announcement emphasizes the company’s dedication to openly sharing research findings while ensuring the integrity of ongoing studies. Additionally, Pfizer has entered into a new clinical trial collaboration with Olema Pharmaceuticals to evaluate a combination therapy for metastatic breast cancer. The collaboration will test the safety and combinability of Olema’s palazestrant with Pfizer’s investigational CDK4 inhibitor, atirmociclib.
Meanwhile, a CDC panel has voted to end the universal recommendation for COVID-19 vaccinations, shifting the decision to a personalized choice between patients and healthcare providers. In related regulatory news, the U.S. Department of Health and Human Services and the FDA have announced reforms targeting misleading direct-to-consumer pharmaceutical advertising. These actions include issuing warning letters and cease-and-desist notices, as well as initiating rulemaking to address advertising loopholes. Raymond James has highlighted potential challenges for pharmaceutical companies following these reforms.
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