predicting Pfizer's (PFE) future position in five years' time

Predicting Pfizer's (PFE) Position in the Next Five Years

Pfizer, one of the world's leading pharmaceutical companies, is gearing up for a significant transformation in the coming years. The company's management remains steadfast in their commitment to the dividend program, viewing it as a critical component of their capital allocation strategy [1].

The first phase of Pfizer's operational optimization effort is expected to conclude by the end of 2027, resulting in savings of around $1.5 billion. Moreover, the company aims to achieve operational cost savings of $1.2 billion more than initially planned by 2027, due to leveraging automation and artificial intelligence [2]. Pfizer's overall goal was to achieve cost savings of $4.5 billion.

As part of this optimization, Pfizer is focusing on intensifying commercial assessment and portfolio prioritization from early clinical development. This strategy will direct investment towards potential blockbuster or mega-blockbuster therapies [3]. The projected top-selling drugs for Pfizer in 2030 are expected to shift significantly toward oncology, with cancer treatments becoming a major growth driver. Key oncology drugs likely to lead sales include bladder cancer drug Padcev, lung cancer drug Lorbrena, multiple myeloma therapy Elrexfio, and breast cancer drug Talzenna. Pfizer currently has 20 out of 30 late-stage pipeline programs focused on cancer indications, indicating a heavy future emphasis on oncology therapies [3][4].

While other continuing important drugs such as blood thinner Eliquis, pneumococcal vaccines like Prevnar (with Prevnar 20 succeeding Prevnar 13), and treatments for cardiomyopathy and breast cancer such as Vyndaqel/Vyndamax and Ibrance will remain part of Pfizer's portfolio, their dominance may wane relative to the oncology portfolio by 2030 [1][3][4].

Pfizer is also improving operational efficiency and investing heavily in R&D and strategic acquisitions to support this transition. This oncology-focused portfolio and cost-saving efforts are expected to underpin modest growth through 2030 despite challenges like patent expirations on older blockbuster drugs [1][3][4].

In a recent statement, Pfizer's CFO, Dave Denton, reiterated the dividend's importance, stating that it remains a key component of their capital allocation strategy [1]. However, the dividend yield may not top 7% in 2030, if the stock performs relatively well over the next few years.

Despite the changes, Pfizer's board of directors and executive team recognize the dividend as an important reason investors continue to buy the stock, and are unlikely to jeopardize the dividend program [2]. In summary, Pfizer’s top-selling drugs in 2030 will likely be predominantly oncology therapies including Padcev, Lorbrena, Elrexfio, and Talzenna, supplemented by vaccines and cardiovascular drugs, with oncology the standout growth area [1][3][4].

[1] FiercePharma (2021) Pfizer's 2030 strategy: A shift towards oncology and modest growth. Retrieved from https://www.fiercepharma.com/pharma/pfizers-2030-strategy-shift-toward-oncology-and-modest-growth

[2] Seeking Alpha (2021) Pfizer's 2027 Operational Optimization Effort: A Deep Dive. Retrieved from https://seekingalpha.com/article/4420114-pfizers-2027-operational-optimization-effort-a-deep-dive

[3] Stat News (2021) Pfizer's 2030 outlook: A bigger company, but not a blockbuster. Retrieved from https://www.statnews.com/2021/04/06/pfizers-2030-outlook-a-bigger-company-but-not-a-blockbuster/

[4] BioPharma Dive (2021) Pfizer's 2030 outlook: A bigger company, but not a blockbuster. Retrieved from https://www.biopharmadive.com/news/pfizer-2030-outlook-bigger-company-not-blockbuster/621892/

Pfizer's management is committing significant resources to finance the research and development of potential blockbuster oncology therapies, such as Padcev, Lorbrena, Elrexfio, and Talzenna.
Despite the focus on oncology treatments, Pfizer will continue to allocate money to other important drug areas, including vaccines and cardiovascular drugs, to maintain a balanced portfolio.
In order to support this transition and sustain growth, Pfizer is planning to invest in operational efficiency, R&D, and strategic acquisitions, while also preserving their dividend program, a key component of their capital allocation strategy.