A few years back, the stars of Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA) shone brightly in the heavens of earnings and share performance. Their groundbreaking coronavirus vaccines, supplemented by Pfizer’s COVID treatment, raked in billions. However, as we transition to a post-pandemic world, demand for these products has waned. The companies have had to reel in costs, aligning them with reduced demand, which has consequently cast a shadow on their earnings and share prices, causing both Pfizer and Moderna to witness a decline of approximately 30% in their shares over the past year.
Yet, a glimmer of hope emerges on the horizon for these ailing giants, stemming from their steadfast commitment to long-term growth. This resilience makes them both intriguing investment prospects. However, faced with the choice of only one of these phoenixes rising from the ashes, which should savvy investors place their bets on? Let’s delve deeper.
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The Fortunes of Pfizer
Pfizer soared to a record-breaking $100 billion in sales back in 2022, leaving stakeholders in rapture, only to witness disappointment as last year’s sales dwindled to approximately $58 billion. Adding insult to injury, some of Pfizer’s non-coronavirus blockbusters are slated to lose exclusivity, translating to an estimated $17 billion in lost sales by the end of the decade.
Nevertheless, Pfizer has orchestrated a grand resurgence, embarking on its most extensive spree of product launches ever, unfurling a staggering 19 in just 18 months. Furthermore, a series of strategic acquisitions promises to inject billions into Pfizer’s top line, with the procurement of oncology specialist Seagen standing out as particularly auspicious. This acquisition brought along four burgeoning products, bolstered by a burgeoning pipeline that could catapult Pfizer to the forefront of cancer therapy.
Pfizer anticipates that these fresh launches will engender $20 billion in revenue by 2030, with additional boosts of up to $25 billion from its strategic alliances. Combined with growth stemming from its pipeline programs, Pfizer envisions revenue soaring to a potential $84 billion in 2030, marking a robust 65% surge from pre-coronavirus figures. This narrative underscores the reality that Pfizer might be down currently, but certainly not out.
The Prospects of Moderna
Similarly, Moderna witnessed a stark plummet in revenue from its coronavirus vaccine pinnacle of $18 billion in 2022 to $6.7 billion last year. Compounded by the fact that the vaccine constitutes its sole product, the specter of limited future growth has haunted investors.
However, a silver lining emerges amidst the clouds of despair. Moderna boasts a robust pipeline, with a plethora of late-stage candidates poised to propel the company towards its ambition of launching 15 novel products over the ensuing five years. Even a partial realization of this vision promises a diversified and substantial revenue stream in the foreseeable future.
Leading the pack is Moderna’s respiratory syncytial virus (RSV) vaccine, slated for regulatory review in the first half of this year. Encouraging trial data bolster confidence in an imminent approval, while the novel presentation of a pre-filled syringe could confer a competitive edge, enabling swift market penetration.
In the event Moderna attains its commercialization goals later in the decade, there are aspirations to amass up to $30 billion in revenue post the rollout of these products. This diversified array encompasses various offerings, from respiratory vaccines to personalized cancer therapeutics.
Hence, akin to Pfizer, Moderna is poised for a resurgence, this time hinged on a diversified suite of products, rather than the reliance on a singular offering.
Choosing the Superior Investment
The optimal investment depends on your inclinations. If you gravitate towards dividends and seek the safety net of a pharmaceutical behemoth with an extensive roster of commercialized drugs, the current juncture presents an opportune window to embark on the Pfizer journey. Currently trading at a modest 12x forward earnings estimates, Pfizer’s valuation stands to escalate as its reinvigorated portfolio gains traction and propels revenue growth.
Conversely, for investors eyeing robust share performance prospects, Moderna beckons. While the company has weathered a protracted gloom, the biotechnology sector tends to witness meteoric ascents when fortunes realign. This segment leans heavily on growth vis-a-vis big pharmaceutical entities.
Should late-stage clinical trials and regulatory pathways unfold seamlessly, Moderna appears poised to deliver. Therefore, for investors comfortable with assuming calculated risks in exchange for superlative growth potential, Moderna emerges as the more prudent choice.
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Adria Cimino holds no position in any stocks cited. The Motley Fool has positions in and endorses Pfizer. The Motley Fool recommends Moderna. The Motley Fool abides by a strict disclosure policy.
The viewpoints and opinions articulated herein are the author’s own and do not necessarily align with those of Nasdaq, Inc.
