Pfizer’s Make-or-Break Trio: The 3 Factors That Will Decide Its Future

Big Pharma's pandemic darling faces a reckoning—here's what could send it soaring or sinking.

1. Pipeline or Pipe Dream?

Post-COVID, Pfizer's R&D engine needs more than boosters to justify its valuation. Next-gen vaccines and oncology bets must deliver—or investors will bolt.

2. The Patent Cliff Cometh

Blockbusters like Eliquis go generic by 2026. Can they replace $17B in revenue fast enough? (Spoiler: probably not without acquisitions.)

3. mRNA 2.0 or Bust

The tech that minted COVID billions needs upgrades. Thermo-stable formulations and cancer applications could be the holy grail—or another case of biotech hype.

Wall Street's already pricing in perfection—always a dangerous bet in pharma. Miss one quarter and watch those P/E ratios implode faster than a meme stock.

1. Pfizer's oncology pipeline

Any struggling pharmaceutical company will try to turn things around by developing newer medicines. Pfizer is no exception; its pipeline is deep, with over 100 active programs. The drugmaker is particularly focused on making a significant impact in the oncology market, one of the largest segments in the industry. That's why Pfizer spent $43 billion to acquire Seagen, a smaller biotech that specialized in oncology.

At the time of the acquisition, Seagen had several approved cancer drugs, but it had an especially impressive pipeline for a company of its size. Pfizer's CEO said: "We are not buying the golden eggs. We are acquiring the goose that is laying the golden eggs." The idea was that Seagen's innovative abilities, coupled with Pfizer's resources and vast experience and reach in the industry, WOULD eventually produce even better outcomes.

Image source: Getty Images.

Pfizer has made other moves to bolster its oncology pipeline since that acquisition. Earlier this year, it signed a licensing agreement with China-basedfor SSGJ-707, an investigational bispecific antibody -- a niche that is increasingly gaining ground in oncology. Pfizer's clinical and regulatory progress in this market will be crucial in the next few years. Investors should closely monitor the company's oncology-related developments.

2. The progress of newer approvals

The drugmaker has earned approval for several new medicines in recent years. These include Abrysvo, a vaccine for the respiratory syncytial virus (RSV); cancer medicine Elrexfio; and Litfulo, which treats alopecia areata. Unfortunately, none of these is making significant contributions to Pfizer's top line yet. That said, they haven't been on the market for that long; all were first approved in 2023.

There's still time for these newer products to make a more meaningful impact on Pfizer's financial results, especially as they gain new indications. For instance, Abrysvo recently got a label expansion in Europe, allowing it to be prescribed to lower the risk of respiratory tract disease caused by RSV in people aged 18 to 59. Litfulo is undergoing clinical trials targeting Crohn's disease, ulcerative colitis, and vitiligo. Elrexfio is also in several phase 3 studies for additional indications.

Investors should check on clinical and regulatory progress for these and other newer drugs in Pfizer's arsenal.

3. Pfizer's cost-cutting efforts

Pfizer has been looking to boost its bottom line by reducing expenses. The company set a cost-savings target of $4.5 billion for this year, and during the first quarter, management said it was on track to achieve that. These efforts matter for at least two reasons.

First, any company -- especially one whose revenue growth is as inconsistent as Pfizer's has been in recent years -- can benefit from cutting expenses, so long as doing so doesn't hurt other aspects of its business.

Second, with President Donald Trump's tariffs threatening to increase manufacturing costs for pharmaceutical companies, Pfizer's efforts could help mitigate the impact of the administration's trade policies. So, that's something else to watch out for.

Is Pfizer's stock a buy?

Though Pfizer has not performed well recently and will encounter some critical patent cliffs within the next few years (notably, that of its anticoagulant Eliquis), there are good reasons for long-term investors to consider the stock.

One is that shares look far too cheap at current levels. The company's forward price-to-earnings ratio was recently 8.3, which is much lower than the healthcare industry's average of 16.5.

Another is that the drugmaker's extensive pipeline should enable it to overcome recent challenges to revenue growth in the long run.

Finally, Pfizer is also a decent dividend stock. So, despite some challenges, it's still worth serious consideration.