The one-year anniversary of the pandemic was a whirlwind for the chief executive officer who has become defined by it. Pfizer’s Albert Bourla conducted several media interviews on Thursday—everything from CNBC and “Morning Joe” to his first television appearance in Israel, the small country where Pfizer is conducting a massive experiment of its Covid-19 vaccine. After the interviews, Bourla held a long meeting with Pfizer’s group of scientist, manufacturing and distribution officials in charge of making 2 billion doses of the vaccine available this year. He also spent some time reviewing Pfizer’s general corporate strategy.
The success of Pfizer’s medical breakthrough continues to mount. Earlier this week, Bourla was informed that data from Israel showed the vaccine, invented and co-developed by Germany’s BioNTech, was 94% effective against asymptomatic SARS-CoV-2 infections two weeks after a second dose. It was another sign that Pfizer’s vaccine is an exceptional tool for combatting the pandemic. This week Bourla, 59, wearing a blue “science will win” mask and matching shirt, himself received his second dose of the vaccine at Pfizer’s Manhattan headquarters, having been careful not to cut the vaccination line.
“It’s an extraordinary experience for me,” Bourla says about his last year leading Pfizer. “Humanity was—suddenly without expecting that we will be in that position—investing all their hopes in us. That created tremendous pressure.”
Bourla and Pfizer have received accolades from around the world for what they accomplished—supplying a game-changing vaccine to the nightmare virus in less than one year. President Joe Biden recently visited Pfizer’s manufacturing facility in Kalamazoo, Mich., just to give thanks to the company that developed the first Covid-19 vaccine authorized by the Food and Drug Administration.
“I came here because I want the American people to understand the extraordinary work that is being done to undertake the most difficult operational challenge this nation has ever faced,” Biden said while standing on a stage next to Bourla.
But there is one constituency that emphatically does not appreciate Pfizer’s efforts to find a scientific solution to the virus plague. Stock market investors have simply not been impressed. Despite Pfizer’s projection that the vaccine will generate $15 billion of revenues this year, Pfizer’s stock is trading around the same level as it did on the eve of the pandemic, even as the broader stock market has surged higher. In fact, Pfizer’s stock is down 15% since Bourla started his run at the top of Pfizer in January 2019.
It’s glaring that Moderna has become a stock market darling. The small biotechnology company that developed the second Covid-19 vaccine approved in the U.S., using the same cutting-edge technology as Pfizer’s vaccine, has seen its stock soar by 529% in the pandemic. With the Covid-19 vaccine its only commercial product, Moderna’s $56 billion market capitalization is now nearly a third the size of giant Pfizer’s valuation. BioNTech, the small German biotech company that is Pfizer’s Covid-19 vaccine partner, has also seen its stock soar.
When you are helping to save the world from a global public health crisis, you can’t please everyone. “I am frustrated,” says Bourla. “We deserve to be credited. But the current stock price is a huge disappointment.”
When Bourla is feeling down about the issue, he recalls the words of Ian Read, the Pfizer CEO who preceded him, who would tell Bourla that delivering for stock holders was a marathon and not a sprint. Developing the vaccine has been a sprint and Bourla is convinced investors will soon figure out that Pfizer’s stock is undervalued.
Stock market investors, of course, are not only group to whom Bourla needs to pay close attention to these days. With the vaccine, he has taken on a huge responsibility and it’s not easy to manage. The politics of manufacturing and distributing the Pfizer vaccine has been fraught with tradeoffs and Bourla hears from leaders of countries who feel they are not getting their doses fast enough. But distributing the vaccine to people who need it might come faster than solving Pfizer’s stock market issues.
“The biggest misconception of the pharma business model is that whatever is good for shareholders is bad for patients. In fact, the reverse is true,” says Bourla.
Bourla became Pfizer’s CEO during a time of transition. In November, Pfizer completed the spin-off of its large Upjohn generics business that sells products like Viagra, Lipitor and Lyrica that have come off patent. The divestiture was the last part of a multi-year plan that Bourla helped champion to transform Pfizer from a diversified pharmaceutical conglomerate into a science innovation business that would live or die from its ability to develop new branded medicines.
Going into the pandemic, Pfizer carefully managed the patent expiration of Lyrica, the pain treatment medication that produced as much as $5 billion of annual sales. The company has been able to continue growing revenue to $41.9 billion in 2020 and seems on track to keep its pledge to increase revenue 6% annually to 2026. But Pfizer will lose patent protection and market exclusivity on drugs that represent as much as $20 billion of sales in the back half of the decade and that has captured Wall Street’s focus. This sort of “patent cliff” is a typical big issue facing a pharmaceutical CEO.
So far, the Covid-19 vaccine has not helped Bourla in this area. Pfizer could end up generating more than $15 billion of revenue in 2021 from the vaccine and maybe $4 billion of profits. But stock market traders don’t care too much about these numbers, even though they are among the biggest ever generated by a biopharma product in a single year, because Wall Street doesn’t expect this financial performance will be repeatable.
“That’s it, 15 and next year nothing, this is the value they are giving us,” Bourla says. “That’s not the case. You can never be certain about these things, but the likelihood that we will move to annual revaccinations for Covid seems very high.”
Bourla has a point. To both boost immune response to the virus and protect against variants, it seems very possible that Pfizer and its strong Covid vaccine brand will be in high demand in the future. And this year, Pfizer has been charging pandemic pricing—$19.50 per dose in the U.S. That’s a bargain compared to the typical cost of a new vaccine and post-pandemic pricing could well be higher. A dose of Merck’s HPV vaccine, Gardasil, costs more than $200.
Nevertheless, what Bourla is counting on to be repeatable is the speed, focus and agility that the company brought to the virus vaccine effort. If the pandemic was a test of the new Pfizer, the company passed with flying colors. There are also other reasons to be optimistic. The company’s Vyndaqel and Vynamax brands, used to treat a rare condition leading to heart failure, saw sales grow 170% to $1.3 billion last year and hold much promise. The experimental drug abrocitinib, an experimental treatment of atopic dermatitis, is projected to produce $3 billion and could be approved by the FDA within weeks. Pfizer’s application for its latest pneumococcal conjugate vaccine, the backbone of its huge vaccine business, received priority review from the FDA for a potential approval for adults by June.
All told, the company has laid out a path to $15 billion of new revenues by 2025, and that does not include what Bourla hopes to do in the vaccine area with the now proven messenger RNA platform, upon which the Covid-19 vaccine is based. Even without mRNA, he is generally enthusiastic about what Pfizer can accomplish with some of its experimental vaccines, ranging from preventing the dangerous scourge of Clostridium difficile infections to Lyme disease and the tragic respiratory syncytial virus infection in babies that Pfizer hopes to thwart by vaccinating pregnant mothers.
There will be setbacks. Last year, Pfizer’s blockbuster metastatic breast cancer drug, Ibrance, failed a key clinical trial in early breast cancer, but Bourla believes Pfizer has strategically planned for these kinds of disappointments as well.
“The thing I am most excited about with our pipeline is that it’s very diverse, it’s not one or two things that are the big hitters,” says Bourla.
There has been a lot of talk in the boardrooms of corporate America about making contributions to sustainability and social impact, and not just turning $1 of shareholder value into $10. Bourla has walked the walk. His company has produced a vaccine that is contributing to sustainability and social impact in spades. He is convinced that, for a biopharma company, the serving of patients, society and shareholders must be symbiotic and he is determined to prove it.
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