Pfizer shares could trend higher in H2 after Gilead Sciences deal

Pfizer shares have been on a roller coaster ride this year, but the stock has climbed more than 19% since the tail end of June and could finish 2020 in a strong position after signing a multi-year agreement to make Gilead Sciences’ coronavirus treatment remdesivir.

Gilead Sciences is reportedly looking to produce enough of its antiviral drug to treat 2 million patients by the end of 2020, with the drug maker agreeing to send all of its supply of remdesivir to US hospitals throughout September.

Pfizer meanwhile is working with German biotech company BioNTech to develop a coronavirus vaccine, with the race to find a cure heating up after major breakthroughs from AstraZeneca’s partnership with Oxford University last month.

Pfizer is trading at $38.48 per share at the time of publication, with the stock down 1% year-to-date.

Pfizer reports ‘resilient’ earnings amid Covid-19 crisis

Last week, the US-based drug maker saw its shares lifted by better-than-expected second quarter (Q2) earnings and upgraded outlook for H2 2020.

However, the company did see profits fall 32% as demand for many of its drugs fell as a result of the upheaval created by Covid-19. Revenue meanwhile fell 11% to $11.8 billion, down from the $13.26 billion it recorded in the same period last year.

‘Our strong performance in the first half of the year highlights the resiliency of our business even during the most challenging times,’ Pfizer CEO and chairman Albert Bourla said in its Q2 results.

Pfizer’s biopharma business had a particularly strong 2020, growing 9% operationally in the first six months of the year, driven by strong performances from many key brands, including Upjohn and Lyrica.

‘Upjohn faced the expected headwind of generic competition for Lyrica in the US that was partially offset by strong performance in China in second-quarter 2020,’ Bourla added.

‘We continue to progress toward a successful close of our transaction with Mylan, now expected in the fourth quarter of 2020’

Pfizer also marginally upgraded its full-year outlook, with the company expecting earnings per share (EPS) to come in between $2.85 to $2.95, up from its previous guidance of $2.82 to $2.92 EPS.

It also expects to generate $48.6 billion to $50.6 billion in 2020, up from its previous guidance of $48.5 billion to $50.5 billion.

S&P 500 keeps climbing

The S&P 500 has not looked back since it found support last week at 3200, moving smoothly higher over the past week, in sharp contrast to the lack of progress in the FTSE 100 and the DAX, according to Chris Beauchamp, chief market analyst at IG.

‘Further gains seem likely as the index begins to recover overnight losses, with the sequence of higher highs and higher lows firmly intact,’ he added.

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