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Fundamental View
AS OF 28 May 2025Pfizer has ample financial resources, strong ability to de-lever, and sizeable M&A capacity at current ratings.
Pfizer faces meaningful losses of exclusivity come the middle part of the decade. Management has guided to a ~$17 bn negative revenue impact from patent losses in 2025-30, including for drugs such as Xeljanz (2025), Eliquis (2026), Ibrance (2027), and Xtandi (2027).
Management expects to offset this impact with growth from pipeline development (+$20 bn of revenues by 2030) and business development (+$25 bn of revenues by 2030).
Business Description
AS OF 28 May 2025- Pfizer is a research-based, global biopharma company with focuses in immunology, metabolic disease, oncology, vaccines, neuroscience, and rare disease.
- PFE has completed a number of major acquisitions and divestitures in recent years. In 2009, the company acquired Wyeth for $68 bn, increasing its size by approximately 50%. Subsequently, PFE completed the $17 bn acquisition of Hospira, ~$12 bn acquisition of Biohaven, ~$6 bn acquisition of Arena, ~$5 bn acquisition of GBT, ~$14 bn takeover of Medivation, ~$43 bn acquisition of Seagen and $6.3 bn divestiture of its remaining stake in Haleon.
- The company has also completed the sale of its Nutrition business to Nestle for $11.9 bn and the disposition of its animal health business, Zoetis. More recently, the company executed the separation of its Consumer and Upjohn businesses through distinct transactions.
Risk & Catalysts
AS OF 28 May 2025Pfizer has been active with portfolio repositioning, executing the separations of its Consumer Healthcare and Established Brands (Upjohn) businesses in recent years. These transactions have resulted in weaker diversification and greater exposure to patent expirations.
Due to upcoming patent losses, Pfizer has been extremely active with M&A. The company recently completed the $43 bn acquisition of Seagen, which resulted in well over a turn of leverage deterioration.
Pfizer is also exploring the sale of its hospital drugs unit. The unit was formed through the $17 bn acquisition of Hospira in 2015. We suspect that divestiture proceeds would be used primarily for business development.
Key Metric
AS OF 28 May 2025| $ mn | Y20 | Y21 | Y22 | Y23 | Y24 | LTM 1Q25 |
|---|---|---|---|---|---|---|
| Revenue | 41,651 | 81,288 | 101,175 | 59,553 | 63,627 | 62,463 |
| Gross Profit | 33,167 | 50,467 | 66,831 | 34,599 | 45,776 | 45,146 |
| R&D | (8,709) | (10,360) | (11,428) | (10,679) | (10,822) | (10,532) |
| SG&A | (11,597) | (12,703) | (13,677) | (14,771) | (14,730) | (14,266) |
| Adj. EBITDA | 18,027 | 33,354 | 46,153 | 22,904 | 25,867 | 24,991 |
| Total Debt | 39,836 | 38,436 | 35,829 | 71,888 | 64,351 | 62,109 |
| Gross Leverage | 2.2x | 1.2x | 0.8x | 3.1x | 2.5x | 2.5x |
| Interest Coverage | 13.1x | 26.6x | 46.8x | 39.2x | 10.2x | 10.4x |
CreditSight View Comment
AS OF 27 May 2025We reiterate our Outperform recommendation on Pfizer. While we are less-than-impressed with Pfizer’s late-stage pipeline, we see the spread pickup over peers such as BMY (M/P) and MRK (U/P) as worthy of adding exposure given PFE’s financial flexibility.
Recommendation Reviewed: May 27, 2025
Recommendation Changed: January 05, 2024
Who We Recommend
Industrial Bank of Korea
Siam Commercial Bank
Kasikornbank
