Down 50%, Should You Buy the Dip on Pfizer?

Core Insights - Pfizer has a current dividend yield of 6.3%, which is lower than previous levels due to a recent stock price increase, raising questions about potential investment opportunities [1] Company Overview - Pfizer is a major pharmaceutical company engaged in the complex and costly process of drug discovery, development, approval, and marketing [2] - The pharmaceutical industry involves significant expenses at each stage of bringing a drug to market, with companies granted temporary exclusive rights to sell new drugs, leading to substantial profits until patent expirations occur [3] Industry Dynamics - Drug companies, including Pfizer, continuously develop new drugs to mitigate revenue losses from patent expirations, known as patent cliffs, which can cause short-term earnings volatility [4] - Pfizer is recognized as one of the largest pharmaceutical companies globally, with a strong history of drug development and commercialization, making it a point of interest for turnaround investors [5] Stock Performance - Pfizer's stock has decreased over 50% from its late 2021 peak, which was influenced by the pandemic and the overestimation of future vaccine opportunities, leading to a significant price drop as the world adapted to COVID-19 [6] - The company is approaching a patent cliff, with key drugs in oncology and cardiovascular health set to lose patent protections in 2027 and 2028, presenting a notable challenge for future revenue [7]