3 Surprises From Pfizer at the J. P. Morgan Healthcare Conference

This post was originally published on this site

It’s always fun to hear what pharmaceutical company executives might say at the J. P. Morgan (NYSE: JPM) Healthcare Conference. This year, Pfizer (NYSE:PFE) was represented by three top members of its management team at the conference. Here are three things the Pfizer executives said that might be at least a little surprising.


We’re not done making acquisitions

Pfizer has been on a major spending spree over the past 18 months. The company bought Hospira in 2015 for $16 billion, picking up the smaller rival’s biosimilars and injectables. In June of 2016, Pfizer acquired Anacor Pharmaceuticals for $5.2 billion, gaining promising atopic dermatitis drug crisaberole (now branded as Eucrisa). Just three months later, the big drugmaker purchased red-hot biotech Medivation, shelling out $14 billion to seal the deal and add prostate cancer drug Xtandi to its lineup.

Throwing in a few smaller transactions, including the purchase of part of AstraZeneca‘s antibiotics business, Pfizer has spent roughly $38 billion in acquisitions in a relatively short period. If you think the big pharmaceutical company is done with making acquisitions, think again. Pfizer CFO Frank D’Amelio said at the J. P. Morgan conference that the drugmaker is still looking to make more deals.

What kind of deals might Pfizer make? D’Amelio said the company prefers acquisitions that will grow its top-line revenue either “now or soon.” However, he added that Pfizer won’t rule out deals with smaller companies with early-stage pipeline candidates. As for potential timing of future acquisitions, D’Amelio said that the company won’t wait if the right opportunity comes along. 

We love Trump

Okay, the Pfizer folks didn’t actually say they loved Donald Trump. Pfizer CEO Ian Read stated last year that he couldn’t “distinguish between the policies that Donald Trump may support or those that Hillary Clinton may support.” However, it sounds like that perspective has changed. The company’s executives at the J. P. Morgan conference sounded quite enamored with the President-elect’s tax proposals. 

D’Amelio was enthusiastic about the prospects of lower corporate tax rates. He mentioned Trump’s proposal of a 15% corporate tax rate and House Speaker Paul Ryan’s proposal of a 20% rate, saying that “both would be good.” 

He also had clearly been thinking about the possibility of lower taxes on repatriation of cash parked overseas, calling it “a big positive.” D’Amelio even walked through a hypothetical scenario for what repatriation could mean for Pfizer. He said that, should changes be enacted, it could give the company “huge capital firepower.” 

We’re not afraid of potential Ibrance rivals

Pfizer’s fastest-growing drug in 2016 was Ibrance. Sales for the CDK inhibitor soared to nearly $1.5 billion in the first three quarters of last year. What about potential competition that could be on the way? Albert Bourla, who heads up Pfizer’s innovative health business segment, didn’t seem worried.

Bourla mentioned seeing more data from other CDK inhibitors over the last few months. He was referring to a couple of recent updates. In October, Novartis (NYSE:NVS) announced positive results from a late-stage study of ribociclib in combination with hormone therapy Femara in treating advanced breast cancer. A couple of months earlier, Lilly (NYSE:LLY) provided an update on its late-stage CDK inhibitor abemaciclib.

You’d think that Pfizer might be at least a little afraid of ribociclib presenting a threat to Ibrance. Novartis stopped the late-stage study in May, earlier than planned, after interim analysis showed the drug had already met its primary endpoint. Lilly, on the other hand, didn’t get such good news in its interim analysis of abemaciclib.

Bourla’s view, though, is that any positive results from Novartis and Lilly merely strengthen the case for CDK inhibitors as a class. He expressed confidence that Ibrance will win for several reasons, including the strength of its clinical data, first-mover advantage, and positive patient experiences.

Not surprising

What wasn’t surprising in the least was that Pfizer’s team thinks the company’s future remains promising. Albert Bourla spoke about the potential for a label expansion for Ibrance this year and the tremendous potential for newly approved atopic dermatitis drug Eucrisa. Pfizer’s research and development head, Mikael Dolsten, talked up the company’s big pipeline and opportunities for combination therapies with other drugs.

Based on the drugs in Pfizer’s lineup currently, Wall Street is projecting annual growth of just under 7% over the next five years. That’s much better than the past five years. Combined with Pfizer’s nice dividend, that kind of growth could mean solid returns for investors. And if the company makes more of those acquisitions and gets the tax reform it’s hoping for, Pfizer shareholders could receive a pleasant surprise of even higher returns.

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Be Sociable, Share!

Related Posts


MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.

This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.

The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.