What Happened?
Shares of global pharmaceutical company Pfizer (NYSE: PFE) jumped 5.9% in the afternoon session after the company reached an agreement with the U.S. government to lower drug prices and reported positive trial data for a weight-loss drug from a recently acquired company.
The drugmaker voluntarily agreed to reduce prices for certain medications through Medicaid and sell them directly to consumers on a new platform, TrumpRx. As part of the deal, Pfizer also committed to investing $70 billion in domestic research, development, and manufacturing. Separately, Metsera, an obesity-focused startup that Pfizer is in the process of acquiring for $4.9 billion, announced promising results from a mid-stage trial. Its experimental weight-loss drug demonstrated a mean weight loss of up to 14.1% in patients, which likely added to investor optimism.
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What Is The Market Telling Us
Pfizer’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 18 days ago when the stock dropped 3.5% on the news that reports revealed federal health officials are planning to link COVID-19 vaccines to the deaths of children.
The decline followed a Washington Post story stating that officials intend to present data to advisors for the Centers for Disease Control and Prevention (CDC) connecting the vaccines to 25 child deaths. This development has heightened investor concerns about vaccine manufacturers, including Pfizer, BioNTech, and Moderna, which also saw their shares fall. The negative sentiment builds on recent headwinds for the sector, as the Food and Drug Administration (FDA) imposed new restrictions in late August, limiting the next round of vaccines to people over 65 or those with qualifying health conditions.
Pfizer is down 5.1% since the beginning of the year, and at $25.25 per share, it is trading 16.4% below its 52-week high of $30.19 from October 2024. Investors who bought $1,000 worth of Pfizer’s shares 5 years ago would now be looking at an investment worth $688.10.
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