Although pandemic fears have been fading, the cash register at Pfizer (NYSE:PFE) may be on the verge of clanging away. Earlier today, the company submitted a new drug application (NDA) for its Covid-19 oral therapeutic paxlovid, specifically to protect patients at high risk of developing severe illness. PFE stock is up 3% on the news.
Previously, the U.S. Food and Drug Administration (FDA) granted paxlovid emergency use authorization (EUA) for the treatment of mild-to-moderate Covid-19. According to Pfizer management, the NDA submission provides longer-term follow-up data required for possible regulatory approval.
Pfizer CEO Albert Bourla said the following:
“Data from our clinical development program, coupled with the more than 1.7 million patients around the world who have been prescribed our oral treatment to date, reinforce PAXLOVID as an important treatment option for mild-to-moderate COVID-19 in patients at greater risk of progression to severe symptoms, regardless of vaccination status.”
Because the NDA specifically targets high-risk patients, the submission generally matches the framework undergirding Pfizer’s EUA application. Presumably, then, Pfizer may enjoy better-than-usual odds for NDA approval.
PFE Stock Benefits from Major Sales Agreement
While PFE stock is down on a year-to-date (YTD) basis, it has gained about 5% for the past five days. Some of that enthusiasm can be traced to another encouraging development prior to the NDA submission.
According to a June 29 report from The Wall Street Journal, President Joe Biden and his administration agreed to pay $3.2 billion for 105 million doses of the company’s Covid-19 vaccine, which it developed with BioNTech (NASDAQ:BNTX). Per the report:
“The deal would provide supplies for the federal government’s planned fall booster campaign, which administration officials are devising to blunt a potential wave in cases, possibly driven by variants of the Omicron strain now spreading across the U.S.”
This new arrangement is very favorable to Pfizer. At about $30 per dose, it’s a significant step up from the $19.50 per dose in its initial contract.
Why It Matters
WSJ reports that the Biden administration is facing a funding shortage “amid a stalemate in Congress” around Covid-19 relief. White House Covid-19 coordinator Dr. Ashish Jha warned about this shortage as well:
“We will not be able to secure new vaccines to protect all Americans who would benefit from the best protection possible against COVID-19.”
Pfizer’s new multi-billion-dollar deal represents the latest sign that the Biden White House is determined to keep combatting Covid-19. As a result, PFE stock may have some pandemic legs left yet.
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
