Pfizer Boasts Strong Oncology Portfolio: Can it Sustain Growth?

Core Insights - Pfizer is a leading player in oncology with a strong portfolio of approved cancer medicines and a robust pipeline focusing on various modalities, including small molecules and antibody-drug conjugates [1] - The acquisition of Seagen in 2023 enhanced Pfizer's oncology position by adding four ADCs, contributing significantly to revenues in 2024 and Q1 2025, with oncology revenues growing 7% operationally in Q1 2025 [2][8] - Pfizer is expanding its oncology pipeline with several late-stage candidates and has entered the biosimilars market, marketing six cancer biosimilars [3][4] Company Developments - The Seagen acquisition added four ADCs: Adcetris, Padcev, Tukysa, and Tivdak, which have positively impacted Pfizer's revenue [2] - Pfizer has advanced its oncology clinical pipeline with candidates like sasanlimab, vepdegestrant, and sigvotatug vedotin, and has secured an exclusive licensing deal with 3SBio for a dual PD-1 and VEGF inhibitor [3] - The company is also working on expanding the labels of existing oncology products, indicating a proactive approach to enhance its market offerings [4] Competitive Landscape - Major competitors in the oncology space include AstraZeneca, Merck, and Bristol-Myers, with AstraZeneca's oncology sales comprising about 41% of total revenues and growing 13% in Q1 2025 [5] - Merck's Keytruda accounts for approximately 50% of its pharmaceutical sales, while Bristol-Myers' Opdivo represents around 20% of its total revenues [6] Financial Performance - Pfizer's stock has declined 6.8% year-to-date, contrasting with a 0.2% increase in the industry [7] - The company's oncology revenues rose 7% in Q1 2025, driven by key drugs such as Xtandi, Lorbrena, and Padcev [8] - Pfizer's 2025 EPS estimate has increased to $3.06, with a forward P/E ratio of 7.77, which is below the industry average of 15.05 [10][12] Valuation Insights - From a valuation perspective, Pfizer appears attractive, trading below its 5-year mean P/E of 10.90 [10] - The Zacks Consensus Estimate for 2025 earnings has risen from $2.98 to $3.06 per share over the past 60 days, indicating positive sentiment [12]