The global pharmaceutical industry is a $1.3 trillion industry that’s continuing to grow as viral pandemics and other health-related issues face a growing and aging population.
The 2020 novel coronavirus outbreak increased interest in pharmaceuticals, and you may be seeking a way to invest. Two of the most prominent pharmaceutical companies are New York City-based Pfizer Inc. (NYSE:PFE) and Cambridge-based AstraZeneca PLC (NYSE:AZN).
Each has taken a different path over the past 20 years and has its own obstacles and goals for the 2020s. Here’s a breakdown of AstraZeneca vs Pfizer stock to determine which investment is right for you.
AstraZeneca Has Secured A 100 Million Dose Order
AstraZeneca is a European biopharmaceutical company that is in Phase 3 trials for a COVID-19 vaccine in the U.S. There will be up to 50,000 participants, including those in other late-stage trials in the U.K., Brazil, and South Africa.
It’s also filing to complete regulatory requirements in Japan and Russia, with results possible by the end of 2020 in the best-case scenario.
The company is partnered with Oxford University and the National Institute of Allergy and Infectious Diseases (NIAID) and forged two deals worth $1.287 billion with the U.S. government to provide 300 million doses of its vaccine to the U.S. market.
It also secured a 100 million-dose order in the U.K., along with 400 million pledged to the European Union. With all these orders, the company brought on a third-party manufacturer, Albany Molecular, to assist in production for a possible distribution before 2021.
The anticipated revenue of this SARS-CoV-2 vaccine is keeping the stock price stable at a an all-time high, especially as the company’s treatment is an early frontrunner with promising results.
Analysts generally concur that AstraZeneca stock is a buy for the remainder of 2020, sans any issues discussed below. It also pays a healthy 2.5% annual dividend.
Of course, AstraZeneca isn’t the only vaccine maker on the block.
Pfizer Projects 1.2 Billion Doses By 2021
Pfizer is partnered with BioNTech (NASDAQ:BNTX) on a treatment that’s undergoing phase 3 clinical trials with results expected to be turned into the FDA as early as October 2020.
In fact, this American pharmaceutical conglomerate has four vaccine candidates, with two labeled with FDA fast-track tags, and they’re adding a fifth.
All are based on mRNA and target antigens, although they take different approaches to the treatment.
Should everything go through successful clinical trials, the company is lining up manufacturing for 100 million doses by the end of 2020 and over 1.2 billion doses delivered in 2021.
This news is helping the company recover, as its shares haven’t been priced this high since 2004. This means Pfizer may have first-mover advantage over the competition, including AstraZeneca.
The announcement of these third-stage clinical results will drive the company’s stock to either sharply increase or decrease, as it’s a more concrete sign than any earnings report for the company’s anticipated revenues for the remainder of the calendar year and next 12 months.
On top of this, Pfizer will be involved in the manufacturing of Gilead Sciences’ Remdesivir. This potential vaccine has had mixed results on COVID-19 patients though, and investment buzz around Gilead cooled since May.
Pfizer’s vast resources and cash should allow it to grab a piece of any successful vaccines, which is why many analysts recommend to Buy Pfizer before a share price pop.
No investment is guaranteed though, so let’s look at the risks of each stock.
Clinical Trials Are Make Or Break For AZN Stock
AstraZeneca is part of the White House’s Operation Warp Speed (OWS) program, which granted it $1.2 billion in free funding to develop the vaccine. Should it hit its deadlines, this money will be fully vested in early 2021. However, everything hinges on successful results of the clinical trials, which is an educated guess at this point.
The company does still generate revenues from other drugs, like cancer treatment Lynparza, and respiratory treatment Symbicort.
Still, all eyes are on its coronavirus drug, which it’s not profiting from in Europe. The pricing for its supply to the European Commission is essentially at cost, because of pro-consumer healthcare laws in the face of the pandemic.
As with any pharmaceutical company, there’s also the possibility of litigation that could take a toll on the company’s balance sheets. However, this risk is relatively low in the context of the coronavirus pandemic.
Dangers of Buying Pfizer
Pfizer is a giant, and it’s been in the process of slimming down in 2020. It’s in the process of merging its Upjohn unit, which includes popular medications (including Viagra, Lyrica, and Lipitor) that lost market exclusivity, with Mylan.
This has been a year-long merger that’s still dragging into the end of 2020 because of coronavirus-related delays. Like AstraZeneca, the risk to Pfizer is losing some shine if the company doesn’t deliver positive results in October.
We’ve already seen Gilead Sciences turbulent 2020 pricing, and other drug makers in the spotlight carry the same risks.
Even a company as large as Pfizer with enough cash reserves to cover it can take a long-lasting loss from a coronavirus snafu. This risk is still low compared to other sectors struggling to recover from the pandemic.
Pfizer Vs AstraZeneca Stock: The Bottom Line
Both Pfizer and AstraZeneca have COVID-19 vaccines in late-stage clinical trials around the world. Each has a large distribution footprint that spans across multiple countries and continents. This means they are both well positioned to generate sustainable profits from these vaccines even after the current outbreak subsides.
And the coronavirus is only one affliction these companies treat. They have large pipelines with drugs in various testing stages to treat a variety of ailments. This means their financial health depends on our body’s health.
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